Inquirer – May 17, 2007

By Ronnel Domingo

MANILA, Philippines -- The Philippine pharmaceutical and healthcare market is expected to grow in value by only half over the next five years to $3.21 billion, or P151 billion, because of government efforts to promote low-cost drugs, a study said.

The study by Dublin-based business research firm Research and Markets, titled, “Philippines Pharmaceutical and Healthcare Report Q1 2007,” the sector said had posted “steady but unspectacular growth in recent years.”

In 2006, the market was valued at $2.14 billion, or P100 billion, Research and Markets said.

“While an improving economic performance will help the drug industry continue to develop, the value of the pharmaceutical market would suffer from various government initiatives designed to encourage the use of low-cost medicines,” the company said in a statement.

It cited encouragement of imports of low-priced medicines from India and Pakistan, facilitation of the entry of generics into the market, and pending introduction of compulsory licensing of public health emergencies.

Compulsory licensing means patent holders will give up their monopoly in making and selling their medicines when public interest demands the immediate provision of adequate supply, such as during an epidemic.

“In terms of market segmentation, generics remain underrepresented at only around three percent of the total by value due to widespread counterfeit activity and the lack of compliance with and enforcement of generic regulations,” Research and Markets said.

“While branded medicines remain preferred by the segment of the population able to afford them, the government is making a concerted effort to bring prices down, with austerities viewed as inevitable by almost all market watchers,” it added.

The study pointed to efforts of state-owned Philippine International Trading Corp. (PITC) to expand its program to bring low-priced medicines from abroad, with Pakistan identified as an added source of imports.

Earlier this month, PITC petitioned the Intellectual Property Office to cancel Pfizer’s patent for Norvasc, an anti-hypertensive drug.

Norvasc sells locally at about P45 a tablet when it could be bought from Pakistan at P10 each, PITC said.

Research and Markets said, “The adjusted Business Environment Rankings for Asia reveal that the Philippines is in 12th place, ahead only of Vietnam and Pakistan.”

“The country has received this score primarily due to its poor regulatory system, which does not provide effective patent ‘linkage’ and fails to take adequate action against counterfeit drugs,” it added.

The Philippines is “rife with corruption, which will continue to hamper efforts to achieve better business operating environment in the Philippines,” the study said.

It noted that multinational drug makers, which dominate the market, fiercely oppose government cost-containment measures, claiming that these discourage investment by innovator companies.

“The foreign drug makers are also critical of widely acknowledged government protection of the indigenous industry and under-funding of regulatory agencies,” the study said.

“Nevertheless, the government relies on domestic producers and products to support the healthcare system, and is therefore unlikely to introduce legislation that threatens the stability of this supply line,” it said.

The study also said harmonization among members of the Association of Southeast Asian Nations and gradual alignment with international norms should improve market conditions in the longer term.

“Fake drugs are a severe problem, with much of the large low-income population tempted to buy illegal products due to relatively high-branded medicine prices,” the study said. With INQUIRER.net