The government stands to lose P28 billion in revenues as a result of price controls on medicine earlier recommended by the Department of Health (DOH).
Through a presidential fiat, Executive Order 104 will take effect in June and will slash the prices of medicines from the manufacturers’ level but not all prices will be reduced at the patient level.
The industry projects its sales to drop by P57 billion from P200 billion once the full price control plan of the DOH is fully implemented.
Projected government revenue losses are broken down into: P4 billion in foregone customs duties; P7 billion in lost VAT; and P17 billion in corporate taxes.
“The EO does not benefit the public in the end because of the formula used to compute the price adjustments. We appeal that the measure be withdrawn until further studies especially at this time when the government needs funds to fight Covid-19,” said the Pharmaceutical and Healthcare Association of the Philippines (PHAP).
“Price control has not been effective based on global experience. It is a populist proposition but discourages production, creating scarcity that will likely hurt those in need of the medicines the most, and shrinks an industry. We continue to appeal for a thorough review on the impact of this policy, it added.”
Instead, the PHAP said the government should continue the practice of buying in bulk and price negotiation to assure both supply and price stability.