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Exempt sale, importation, sale of ‘meds’ from VAT — Imee

Aside from the implementation of the Maximum Retail Price on 133 medicines,  Senator Imee Marcos on Wednesday said the government can still do more to make medicine prices the cheapest possible. 

She said exempting the sale and importation of medicines from the value-added tax could further reduce the maximum retail and wholesale prices of select medicines, which Executive Order No. 104 will subject to a review every six months.

The 56 percent average discount seen in the EO’s regulation of medicine prices, she said, could be larger because pharmaceutical companies themselves have said they could afford price reductions of up to 75 percent, before the EO was signed.

Citing  Philippine Statistics Authority numbers, Marcos said more than half of the P413 billion Filipinos spent on health services in 2018 went to pharmaceutical companies.

 She added that Department of Health estimates put the present cost of branded drugs at as much as 22 times higher than in other countries, especially in private hospitals and pharmacies.

Her campaign promise to make medicines cheaper is now a provision in Section 1 of Republic Act 11467, otherwise known as the sin tax law.

The said law adopts the VAT exemptions proposed by Marcos in Senate bills 218 and 219, which were put into effect last January for diabetes, high cholesterol, and hypertension medicines, and will apply in January 2023 for medicines to treat cancer, mental illness, tuberculosis, and kidney disease.

Amid the financial and logistical problems hounding the government’s Universal Health Care Program, Marcos said lowering the prices of medicine is the quickest way to help the sick.

Senator Christopher “Bong” Go reiterated his commitment to push for measures to provide all Filipinos with better access to affordable essential medicines. 

He expressed this as President Rodrigo Duterte signed Executive Order (EO) No. 104 dated February 17, 2020, which regulates the prices of select drugs including essential medicines most commonly prescribed to patients. 

The EO was signed a few months after Go, the Chair of the Senate Committee on Health and Demography, vowed to personally discuss the matter with the President.

At the Senate session on November 5, Go had said that he would “suggest to the President the inclusion of all essential medicines in the proposed list of expanded MDRP (Maximum Drug Retail Prices) and for its immediate release to complement the Universal Health Care Law.”

On January 13, the Senator reiterated in a radio interview his support for the proposed policy. 

“Essential medicines in the Philippines continue to be exorbitantly priced relative to international counterparts. Generic drug prices are also approximately up to four times higher than international reference prices, he added.

The senator  assured the public that he and the President will continue to serve and protect the welfare and interest of Filipinos who need government attention the most, especially the most vulnerable sectors of society and the generations of Filipinos to come. 

Sen. Risa Hontiveros has described as a healthy  exercise of regulatory powers” the price cap on essential medicines for hypertension, diabetes, and cardiovascular diseases, among others.  

“The President’s exercise of price control and regulatory powers over drugs and medicines under the Cheaper Medicines Law is laudable,” Hontiveros, who authored the said law or Republic Act No. 9502 as Akbayan Partylist Representative in 2008, said. 

Hontiveros had delivered a privilege speech in the Senate in November last year, urging the President to exercise said regulatory powers. 

The senator said that the Executive’s regulatory powers to impose a price cap on essential medicines have not been exercised for more than a decade.  

“The President was given authority by the law to act on recommendations by the Department of Health [DOH],” Hontiveros explained. 

Hontiveros said that Malacañang’s EO “is a step in the right direction to realize universal healthcare.”  

“It will improve access of Filipinos to essential medicines and reduce the cost of out-of-pocket expenses,” Hontiveros said, noting that nearly half or 41% of all healthcare spending in the Philippines goes to pharmaceutical products, compared to other low-income countries. 

Hontiveros co-authored the Universal Healthcare also signed into law by the President last year. 

EO No. 104 imposes the Maximum Retail Price (MRP) and Maximum Wholesale Price (MWP) on “select drugs and medicines totaling to 86 drug molecules or 133 drug formulas” annexed to the order.

The EO also orders representatives from the Department of Health (DOH) and the Department of Trade and Industry (DTI) to “convene and review”  the prices of the remaining 36 drug molecules or 72 drug formulas previously proposed to be included in the MRP and MWP list.

The President signed the EO, as recommended by DOH and echoed by various senators including Go, in accordance with the provisions of Republic Act (RA) No. 9502 or the Cheaper Medicines Act of 2008, which grants the President of the Philippines the power to impose maximum retail prices over drugs and medicines sold in the country, upon the recommendation of the DOH Secretary.

The EO further states that the MRP will be imposed on all public and private retail outlets, including drugstores, hospitals and hospital pharmacies, health maintenance organizations, convenience stores and supermarkets and the like.

MWP, meanwhile, will be imposed on all manufacturers, wholesalers, traders, distributors and the likes.

The drugs and medicines included in the MRP and MWP list will be subject to review by the DOH, in consultation with the DTI, within six months from the effectivity of the order and every six months thereafter.

Violations of EO No. 104 will be dealt with in accordance with RA 9502 and other related laws. 

The objective of the EO is to improve access of Filipinos to healthcare through the imposition of maximum retail prices on drugs that address the top causes of morbidity and mortality in the country.

Topics: Maximum Retail Price , medicines , Senator Imee Marcos , value-added tax , VAT
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