Amend patent system to lower drug prices

Posted on July 2, 2006. Filed under: Resources |

By Elpidio Peria
Convenor, Ayos na Gamot sa Abot-Kayang Presyo (AGAP) Coalition
Published on Page A12 of the July 2, 2006 issue of the Philippine Daily Inquirer

People buy fake medicines because the genuine products are expensive. This argument is flawed.

The high prices of medicines and proliferation of fake ones are two different issues. Each issue needs to be examined separately.

First, let us establish why medicine is very expensive in the Philippines. Although the country was the first in Asia to pass a generic drugs law in the 1980s, we still rank second to Japan in having the highest medicine prices in the region.

Studies by the Department of Health and the Department of Trade in 1999 found that five out of every nine medicines cost more in the Philippines than in Malaysia or Indonesia. Another study conducted by Health Action International showed that Amoxil, an antibiotic manufactured by a multinational, sells at a higher price here than in the United Kingdom or Canada. Medicines in the Philippines are 18 times more expensive than those sold in India or Canada.


Statistics aside, the reason medicines in the country are expensive is the monopoly of multinational drug companies. They control around 70 percent of the Philippine pharmaceutical market (Click here to view table on top drug firms). Their dominance extends to production, registration, distribution, and, yes, even marketing. Small companies that attempt to offer a generic equivalent are often sent threatening letters to desist from their actions or be sued.

Another policy instrument of the state that multinational drug companies use to maintain their dominance in the market is the patent system. This is the reason Pfizer is suing the Bureau of Food and Drugs and Philippine International Trading Corp. for taking steps to register and import from India the lower-priced equivalent of its patented Norvasc.

Roxas bill

It is fortunate that Sen. Mar Roxas has filed Senate Bill No. 2139 to amend the existing patent system in the country to facilitate the production of low-priced medicines.

Second, people buy fake medicines not because they are expensive but because people do not have enough or correct information on what constitutes proper medication. The slick marketing efforts of multinational drug companies improperly link lower-priced medicines to fakes. In fact, in a typical Botika ng Bayan [People’s Drugstore] outlet, one question often asked by a buyer, unaware that lower-priced medicines are possible, is “Why is it cheap? Is it fake?”

Correct misimpression

The Department of Health should do a lot more to address this. It should issue a statement to correct the impression created by the current campaign against counterfeit drugs. It should emphasize that not all lower-priced medicines, particularly generic ones, are fake. Being part of the group against counterfeit medicines, it should call on the coalition to be more responsible in its print ads and media statements.

Republic Act No. 8203, the law banning counterfeit drugs, should be amended to remove the clause “an unregistered imported drug product” from the definition of a counterfeit drug. This makes it difficult for Filipino drug companies to import cheaper drug equivalents from India or Pakistan, as they are easily subjected to harassment by multinational drug companies should they attempt to register these imported drugs.


Senate Bill 2139 seeks to remedy this. The measure proposes to incorporate the principle of international exhaustion of rights into our patent system. This means that the rights of a patent holder on any patented medicine sold outside the Philippines is already exhausted. The patent holder in the Philippines can no longer sue companies importing that patented drug. Those who seek to import these branded drugs can no longer be sued, an idea that is not practiced here because our patent system has set in place a national exhaustion of rights principle.

The bigger issue that should merit a robust debate is the Philippine patent system — how it perpetuates the dominance of multinational drug companies and how it keeps medicine prices in the country much higher than those in other parts of Asia.

The House of Representatives should, therefore, fast track the counterpart version of the Roxas bill and pass it before the end of the year. If there is one legislative achievement that members of Congress seeking reelection could brag about to their constituents, it is the bill amending the patent system. It could finally break the dominance of the multinationals in the Philippine market and enable the production of lower-priced medicines.

Elpidio Peria, a lawyer, is convenor of the Ayos na Gamot sa Abot-Kayang Presyo (AGAP), a coalition of civil society organizations, health professionals, consumer groups, labor unions and key personalities.


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