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Study says medicine price control bad for patients

The proposed price controls on medicines will kill small retailers and force manufacturers to reconsider whether to launch new medicines in the country, or even withdraw existing products, hurting patients instead of helping them. 

A study on the effect of price regulation in the Philippines in 2014 said that “these interventions should be carefully monitored as pharmaceutical policies, including price regulation, may not always lead to an overall benefit to the public and may even cause harm by discouraging the introduction of new products to a country.” 

In a joint position paper on the proposed Maximum Retail Price signed by professional pharmacist associations,  pharmaceutical industry, hospital association, and pharmacy retail groups,  it said that “several small- and medium-sized drugstores were forced to close down or sold to larger chains, affecting not only businesses but also pharmacists employed in these drugstores.” 

The joint position paper added that other studies on the impact of MRP reveal that price regulation did not significantly increase access to medicines. “In 2010, the Center for Legislative Development found that while prices are going down, medicines can still remain unaffordable due to low purchasing capacity, brought about by low-income levels and limited, or lack of medicines financing. More is to be accomplished in relation to the high out-of-pocket spending for healthcare which remains at 55 percent.”

Teodoro Padilla, executive director of the Pharmaceutical and Healthcare Association of the Philippines said that price control, while beneficial on the surface, has been found counter-productive and eventually withdrawn in other countries, including China. He added that other countries found that strong market competition trumps any price intervention. 

When price controls were imposed in 2009, the industry lost P11 billion, small retailers closed down or were sold to bigger chains, and the targeted patients still were not able to buy at all or at the right dosages. 

“We have been asking for a meeting with our officials to explain that there is a better way, that our prices are comparable to ASEAN countries, and that price control on medicines doesn’t work. We hope we can explain our side before the government makes a decision on the proposed MRP,” he said.

Competition is robust in the industry, he said, with 350 manufacturers, 9,000 distributors, 23,000 retailers, and the public can choose between branded and generic medicines.

“A viable solution is for the DOH to make available the cheapest medicines because of lowered procurement cost from pharmaceutical companies,” he said.

This is made possible by bulk purchases by the government from the pharmaceutical companies. 

“Our prices under this arrangement are low that medicines in government hospitals are priced at times at a fraction than those in the open market,” he said.

Multiply this exercise through more government purchases, which need bigger budgets, “the maximum benefits of buying in bulk -- or buy one, take one for example  -- matches the approach to the objective, and this will really help the public, including those with financial difficulties,” he said.

PHAP, he said, can help the government work out a system for this. “We have been supportive of the efforts of the government to make medicines accessible to all. This one is doable and does away with government budgets in the long run. We are ready to be part of the solution.”

PHAP expressed its commitment to work with the DOH to make medicines more affordable and widen healthcare services for Filipinos. Apart from straight price reduction on medicines, PHAP Members are offering patient assistance programs and health system strengthening partnerships that offer a holistic, comprehensive and sustainable approach to addressing the country’s health concerns. 

Topics: price controls , medicines , Maximum Retail Price , Center for Legislative Development
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