MNCs behind high cost of medicines
By Francis Allan L. Angelo
MANY Filipinos die not because of diseases but due to prohibitive prices of medicine.
This was the sad assessment of Roberto “Obet” Pagdanganan, chairman and president of the Philippine International Trading Corporation (PITC), as he exposed the so-called cartelization of the Philippine pharmaceutical industry.
Pagdanganan, a former governor of Bulacan province, yesterday keynoted the 2005 International Cooperative Month celebration at the Iloilo provincial capitol which focused on health coop business and the Botika ng Bayan program of the government.
In a Power Point presentation before cooperative members and officers in the province, Pagdanganan outlined how multinational corporations (MNCs) manipulate the manufacturing and selling of medicines in the country.
Pagdanganan said approximately 70 percent of P80-billion pharmaceutical market is in the grip of MNCs.
For one, Interphil, a giant pharmaceutical maker, controls 80 percent of toll manufacturing while its sister company Zuellig Pharma/Metro Drug also controls 80 percent of the wholesale distribution of its products.
About 70% of medicines is sold to the public through giant drugstore chain Mercury Drugs which has an estimated annual sale of P30billion.
Because of this setup, Pagdanganan said “the Philippines has the highest drug prices in the world in relation to per capita income.”
The overall picture of the types of medicines sold in the country also reinforced Pagdanganan’s observation – 69 percent of the market is comprised of ethical or prescribed (Rx) drugs which are mostly branded while the remaining 31 percent are proprietary or over-the-counter (OTC) drugs.
Despite the Generics Law, which aimed at giving consumers the chance to buy cheap but effective drugs, 97 percent of medicines sold in the country are branded.
Because of this lopsided condition of the industry, giant drugstores are the ones who eat up the P80-billion industry, accounting for 88 percent of the total sales while the remaining 12 percent goes to hospital sales.
When compared to other countries, prices of medicines sold in the country are 99 percent higher. For example, a 500-milligram tablet of Ponstan (a brand of painkiller) costs P 20.98 here when one can buy it for only P1.46 in Pakistan and P2.80 in India.
Pagdanganan said the cartelization of the pharmaceutical industry in the country has resulted to 40 percent of 82.7million of Filipinos not having access to medicines. Worse, 70 percent cannot buy medicines because of prohibitive prices.
Aside from the control of MNCs over the industry, Pagdanganan said “the current system of patent registration and protection favors of the biggest players, exorbitant marketing/administrative costs and the lack of price control even for off-patent products are also factors why we suffer from high cost of drugs.”
“There are manufacturers who even re-label their off-patent products by literally sugar-coating the capsule. They will promote it as a new and slow-acting drug but in reality it does not contain new base ingredient, it’s only a sweetened capsule,” Pagdanganan said.
To solve the problem of overpriced drugs sold in the country, the PITC chief said they are taking the cudgels of importing cheap drugs from manufacturers in India and Pakistan.
The PTIC is also working for the establishment of a government-owned drug factory in the country which will result to lower prices of medicines.
Pagdanganan also lauded the efforts of 4th district Rep. Ferjenel Biron who filed a bill with Congress which seeks to regulate drug prices and break the cartel that controls the pharmaceutical industry.
At present, the Botika ng Bayan program is the conduit of the PTIC’s efforts to bring cheap but effective medicines.
Their efforts, however, are not without “harassments” from the pharmaceutical giants, Pagdanganan said.
“They have been threatening us with lawsuits while sowing wild rumors about the proliferation of counterfeit drugs because of our importation program. But we are not bothered about it,” he said.
The PTIC is eyeing cooperatives to help establish Botika ng Bayan (BnB) outlets in the country.
Pagdanganan said Iloilo is a potential area for the BnB because of the strong support of the local government units to cooperatives here.
“For a P500,000-capital, our cooperatives here can put up BnB outlets. While earning, they can help our less-fortunate countrymen. Iloilo has a strong cooperative base compared to the rest of the country,” he added.
The Jaro Archdiocesan Social Action Center is one of the BnB outlets in Iloilo City.
(Published in the October 14, 2005 issue of The Guardian-Iloilo)