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Price caps for essential medicines eyed

The government is bent on implementing maximum retail price (MRP) on essential drugs and medicines to ensure accessibility and affordability, especially to the marginalized and disadvantaged population as prices of medicines, even generic drugs, have remained excessively expensive.

A draft administrative order (AO) on the guidelines for the implementation of the MRP is being presented for public hearing by an inter-agency committee led by the Department of Health and the Department of Trade and Industry. Also invited were consumer groups.

The Universally Accessible Quality and Cheaper Medicines Act recognizes mandatory price cuts in the form of MRP.

Under the draft AO, MRP shall cover across all levels of the supply chains, including, but not limited to, prices set by manufacturers, traders, distributors, wholesalers, and retailers.

Factors to be considered in the crafting inclusion of medicines under the MRP include burden of disease, marginalized and disadvantaged populations, and limited competition.

The order also provides for the creation of Drug Price Advisory Council (DPAC), which refers to an independent technical body/committee duly authorized and delegated by the Secretary of Health to provide technical advice and guidance to the DOH in implementing appropriate measures that promote and ensure access to affordable quality drugs and medicines for all consumers in the Philippines created pursuant to Section 18 of RA 9502.

All medicines indicated for diseases comprising 80 percent of the total Disability Adjusted Life Years (DALY) in the country will be considered for price regulation. DALY refers to the years of life lost due to premature mortality and disability in the population brought by a disease.

The AO also proposes that all medicines recommended by patient organizations and medical societies will undergo further evaluation for price regulation.

The AO also provides for the Drug Price Advisory Council (DPAC) to establish framework and methodology in imposing MRP on drugs and medicines. DPAC will also regularly review prices of drugs and medicines in the market to evaluate if price regulation is necessary.

It will recommend the list of drugs to be put under MRP with their maximum prices to the Secretary of Health.

In addition, DPAC will review the existing list of MRP.

The DOH-PD, FDA, and Department of Trade and Industry shall continuously monitor for MRP violators.

Once the AO is approved, the President will approve an executive order. There will be 120-day transition from the EO approval for the new MRP to take effect.

The existing MRP list shall be reviewed every three months unless otherwise deemed necessary by the DPAC or by the DOH, if the DPAC is non-existent between the periods.

In drafting the AO, the government noted that essential medicines continue to be disproportionately expensive in the Philippines when compared internationally, particularly for branded counterparts of already off-patent medicines. Generic drug prices are still approximately up to four times higher than international reference prices.

In addition, launch prices of specialized therapies, such as new cancer treatments, biologics, and genetic therapies, which have emerged in recent years, are priced beyond what patients, private insurers, and the government can fairly afford.

The excessive prices of medicines undermine the health of millions of Filipinos, with the poor and middle-income sectors bearing the increased risk of being trapped in the vicious cycle poverty, inequality, and debt.

The increasing prices of new medicines and high out-of-pocket spending are among the biggest challenges to the Philippine health system.

High-medicine cost is one of the main barriers to patient treatment access and medication adherence, especially for major burdens of disease in the country.

The DOH has been actively promoting generics since the enactment of the Generics Act in 1988 as well as promoting consumer choice through drug price transparency efforts.

However, despite ongoing reforms to ensure better affordability of medicines, medicine prices have continued to escalate making it challenging for consumers to afford and sustain their treatment and the government to help reduce out-of-pocket expenses even as there has been increasing investments on healthcare coverage over the last decade.

In a statement, the Pharmaceutical and Healthcare Association of the Philippines (PHAP), composed of research-based providers of life-saving medicines in the country, said it remains committed to working with the government in developing comprehensive, sustainable solutions to strengthen the country’s healthcare system.

Laban Konsyumer Inc. (LKI) President Victorio Mario Dimagiba, meanwhile, said his group supports the proposed price cap for medicines.

He, however, would like to reduce the transition period from 120 days to 60 days. He estimated that roughly 40 percent of medicines are covered by the MRP.