E-drug: Philippine parallel imports
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In the last few months, the Philippines' Department of Health
(DOH) and the Department of Trade and Industry (DTI) have
been using parallel imports to make medicines more affordable.
It looks like they're making headway too, considering that last
week, the drug companies have filed a lawsuit against the
government to stop these reforms.
The measures were initiated after a study from Consumers International
was released, showing that drug prices in the country were among the
highest in the region. The DTI arranged to have the importations
handled by the Philippine International Trading Corporation (PITC), a
government corporation. The PITC went through all the processes of
registration required for a company to import drugs. They then shopped
around internationally for the drug products and decided to import from
India. These drugs were, in turn, subjected to the usual inspection and
testing by the Bureau of Food and Drugs (BFAD) before they were
allowed into the country. BFAD has stringent requirements on
quality, whether for parallel imports or other regular imports.
The efforts are just beginning to pay off. Last month, the DOH and DTI
launched its 'Presyong Tama, Gamot Pampamilya' program through
seven government hospitals in Metro Manila, Davao and Iloilo. The
initial offering involves six commonly prescribed branded medicines at
costs lower than those charged by the Philippine subsidiaries of the drug
companies. For example, the anti-diabetic drug Daonil (glibenclamide)
manufactured in India is being offered at P2.08 (about 4 cents U.S.) per 5
mg. tablet, much lower than the P7.75 (15 cents) charged by the
Philippine distributor. Likewise, a Ventolin (salbutamol) inhaler from the
Philippine distributor costs P295 (US$6) while the DOH-DTI is offering
the same product from India at P198 (US$4). The products from India
are marketed under those brand names. Parallel importation
entails imports of the same brand name products but from the
same company's subsidiary, in this case the Indian subsidiary.
That's what irks the drug companies, who say this is sabotaging
their local subsidiaries. But it also irks consumers because then
we realize how the companies are robbing us blind, i.e., if they can
sell Bactrim (co-trimoxazole) at 10 US cents each in India, why is it
sold at 50 cents US in the Philippines?
The drug companies weren't too happy. Press releases began to appear
about Indian drugs being unreliable. And when they filed their lawsuit,
the Pharmaceutical and Healthcare Association of the Philippines
(PHAP) - composed mainly of multinational drug companies -- claimed
that the imports would endanger Filipinos' health because these were
'inferior drugs'. When the drug companies claim the Indian products
are inferior, it's tantamount to admitting their own Indian
subsidiaries produce inferior drugs! The drug companies bad-mouth
the Indian drugs, claiming they're counterfeit, only to scare the
public away from buying the Indian products. They also claimed
parallel imports violated intellectual property rights.
The PHAP argues that the DOH imports constitute unfair trade practices.
They should talk. The government's initial imports amounted to 1.4
million pesos, on which they've made a profit of about 20 percent. This
has raised questions as to how much the drug companies are making. If
the government could import the anti-ulcer drug Zantac from India, sell a
150 mg. tablet at P2.31 (4 cents US) each and still make a profit, then
serious questions have to be asked about how much the Philippine
subsidiary is making by selling the same product at P25.44 (50 cents US)
each.
So far, the judge hearing the lawsuit has denied PHAP's request for a
temporary restraining order because of 'lack of merit' but the court will
continue to hear the case. At stake is a P20 million importation that
would bring drugs in for distribution in all the government�s hospitals.
Michael L. Tan
Health Action Information Network
9 Cabanatuan Road
Philam Homes, Quezon City 1104, Philippines
Michael Tan <issan@attglobal.net>
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