# \[e-drug\] Prices of essential drugs in developing countries (cont'd) **URL:** \ **Category:** e-drug\ **Created:** [April 26, 2000, 11:35am UTC](https://talk.edrugplus.org/t/e-drug-prices-of-essential-drugs-in-developing-countries-contd/8033 "2000-04-26T11:35:06Z")\ **Posts on this page:** 1\ **Page:** 1
**Author:** ![John\_Q\_Wong\_MD\_MS](https://avatars.discourse-cdn.com/v4/letter/j/91b2a8/32.png) [@John\_Q\_Wong\_MD\_MS](https://talk.edrugplus.org/u/John_Q_Wong_MD_MS)\ **Post date:** [April 26, 2000, 11:35am UTC](https://talk.edrugplus.org/t/e-drug-prices-of-essential-drugs-in-developing-countries-contd/8033/1 "2000-04-26T11:35:06Z")
E-drug: Prices of essential drugs in developing countries (cont'd) ------------------------------------------------------------------------- Dear E-druggers, This is a somewhat late reply on the call for info on essential drugs pricing in developing countries. In the Philippines, the duties on imported drugs have been assessed at the rate of 3% for raw materials since 1996 and 5% for finished products since 1999. These rates were 10% and 20%, respectively, previous to the mentioned years. It is notable that after the reduction in tariffs, there was no noticeable decrease in drug prices in the local market in spite of the high proportion of imported inputs to production. It is difficult to bring a finger on the profit margin drug manufacturers add on to the cost of goods. But one estimate, using macro-economic data, puts the net income of drug manufacturers at 34%. Most multinational drug companies distribute their goods through one dominant distributor which controls about 60-70% of the market. This distributor adds at least 15% to the cost of the goods. In addition, a value-added tax of 10% is added to the cost of the goods. Thus, 65% is a fair estimate of the costs added to drugs from importation to the warehouse of the Department of Health. Drugstores who sell to the consumers add anywhere from 10% for branded products to at least 50% for generics. And yes, the government taxes its own procured drugs because it buys from middleman traders. Presently, the government does not conduct international biddings. I hope the above answers are still useful. John Q. Wong, MD, MS Consultant Philippine National Drug Policy Program Office Department of Health Philippines E-mail: johnw@mydestiny.net -- Send mail for the `E-Drug' conference to `e-drug@usa.healthnet.org'. Mail administrative requests to `majordomo@usa.healthnet.org'. For additional assistance, send mail to: `owner-e-drug@usa.healthnet.org'.