KilosBayan said parallel importation has not been maximized to the advantage of consumers. In fact, according to the Council for Health and Development, a health NGO, “the provisions on parallel importation bear no significant impact on the prices of medicines because even before the passage of the law, parallel importation is utilized by the government in its Botika ng Barangay program.”
Besides, the government only allots P1 billion for parallel importation — in an industry that is worth P100 billion.
Another major factor why the cheaper-medicine law failed to make a dent on the high cost of drugs and medicines is the fact that, according to data from the PITC, 80 percent of drugs being manufactured for multinational corporations is done by one company. Moreover, as much as 70 percent of wholesale distribution is handled by a sister company.
In the end, according to CHD, “more than 60 percent of the retailing of finished products is sold through Mercury Drug, which has more than 600 outlets nationwide.”
In other words, there’s an existing cartel of drug manufacturers and distributors that continue to dominate the market despite RA 9502. Indeed, one of the law’s biggest defects is it did not provide for the creation of a regulatory board for drug prices – a board that could have broken the stranglehold of this cartel — despite the strong clamor and recommendation of health-sector representatives and people’s organizations during public hearings when the law was still being crafted.
As a result, the law squandered an opportunity to promote democratic representation of consumers and other stakeholders that in turn could ensure the law’s intent is being followed. Currently, the task of monitoring medicines being sold in the country lies with the Bureau of Food and Drugs, an agency under the DOH that progressive health-sector representatives judged as weak.
The RA 9502 gives President Arroyo the power to impose price caps on retail prices of drugs and medicines but she has not exercised that power.
In fact, on the first anniversary of RA 9052, leaders of the Pharmaceutical and Healthcare Association of the Philippines (PHAP) personally thanked President Arroyo for the government’s support in ensuring that their business would remain “viable.”
PHAP executive director Reiner W. Gloor thanked President Arroyo for assuring them that “we religiously implement laws that uphold patent protection.” PHAP, an industry lobby group, is largely composed of multinational drug manufacturers and providers of most of the country’s patented medicines.
The domination of the local drug industry by TNCs also has an impact on the affordability of medicines and on the campaign to lower prices through the prescription of generic drugs. But because not all drugs and medicines have their respective generic counterpart, the situation remains dire.
According to CHD, there are about 600 drugs in the Philippines that are considered essential. But of this number, only 200 are being produced by Philippine companies. The other 400 off-patent drugs, meanwhile, do not have local generic counterparts and are also dependent on importation, the CHD said.
This partly explains why the use of generic drugs is low in the Philippines. In 2006, for instance, generic drugs account for only five percent of medicines sold locally while in other countries such as in the United states, there was a recorded 50 percent generic-drug use.
Although the intent of RA 9502 is to address the problem of expensive medicines, critics said it has unfortunately become an example of token legislation because it did not support the local drug industry and it did not enable the health sector to monitor its own pharmaceutical policy. This much is clear among the young health workers.