21 JANUARY 2008
P C I J I N V E S T I G A T I O N — PRICE-CONTROL-BOARD DEBATE MAY DELAY CHEAP DRUGS LAW
IMPROVED, BUT STILL CONTROVERSIAL
Aside from its own revisions to the IP Code and rectifying “infirmities” in the Generics Act of 1988 (RA 6675), HB 2844, among other things, also amends the Pharmacy Law (RA 5921) by allowing non-prescription or over-the-counter drugs to be repackaged in small quantities and sold in retail.
But industry players have balked over the bill’s “must carry” provision that will force even small drugstores with limited capitalization to stock drugs brought in through parallel importation. In the Senate, in fact, a similar stipulation was shelved after it was noted that medication needs vary across the country, and that requiring drugstores to have medicines their market does not need could jack up prices all the more.
Some industry insiders have also pointed out that Biron may have a conflict of interest in pushing the provision, since his family is into drug manufacturing, trading, and distribution with Pharmawealth Laboratories Inc. and Phil. Pharmawealth Inc. Biron, a doctor by profession, used to be treasurer of both corporations. Former Iloilo congressman and now Vice Governor Rolex Suplico, who was Biron’s co-author in a similar bill filed in the previous House, was once an incorporator and board director of Phil. Pharmawealth.
One health economist who declines to be identified says there is also no provision for conflict-of-interest declarations from the various members of the proposed regulatory board. “One assumes wrongly that the members have no conflicts or vested interests,” he comments.
As proposed, the board would have seven members, with the health secretary as chairperson and the trade and industry secretary as vice chairperson. The other members of the board are the Bureau of Food and Drug (BFAD) director, the Philippine Health Insurance Corporation (PhilHealth) president, and three presidential appointees: an academic from a health sciences school and two representatives from the consumers’ sector. The board will be assisted by a secretariat to be constituted from the organizational structure of the Department of Health (DOH).
This early, BFAD Deputy Director Joshua Ramos fears that it may just turn out to be “a paper price regulatory board and an administrative burden to the already overloaded government staff.” Though not completely against the board’s creation, Ramos says it would be better if it had its own budget and staff complement instead of being “an additional function of already existing government agencies using existing staff and within existing budget.”
The health economist, for his part, remarks that with the exception of the DTI secretary, none of the members of the board are presumed to have any business experience — despite the fact that they will be making regulatory and pricing decisions affecting free-market trade.
More than the board’s composition, though, Habito and other economists and business experts have counseled against price controls in medicines, particularly in the context of the current state of governance in the country, which they characterize as weak and prone to corruption. This, they argue, would only open up such a mechanism to the risk of “regulatory capture” — a situation wherein regulated entities take over the control exercised by their regulating body.
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