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A CRITICAL STUDY ON THE POLICY-MAKING PROCESS

OF THE UNIVERSALLY ACCESSIBLE AND


QUALITY MEDICINES ACT OF 2008 (REPUBLIC ACT 9205)

An Undergraduate Thesis
Presented to the
Department of Social Sciences
University of the Philippines - Manila

In Partial Fulfillment
of the Requirements for the
Degree of Bachelor of Arts
in Political Science

By:

Lorraine R. Bermejo
April 2010
Second Semester, AY 2009-2010
University of the Philippines – Manila
Approval Sheet

This undergraduate thesis entitled “A Critical Study on the Policy-Making Process of


the Universally Accessible and Quality Medicines Act of 2008 (Republic Act 9205)” written
by Lorraine R. Bermejo in partial fulfillment of the requirements of the degree in BA Political
Science is hereby presented for approval.

___________________________ ___________________________
PROF. CARL MARC RAMOTA PROF. BERNARD KARGANILLA
Thesis Adviser Department Chairperson
ACKNOWLEDGEMENT

This thesis would not have been possible without the love and support of my fantastic family
and friends, and their boundless patience in putting up with me.

Mama, you always know how to make it better with your words of comfort and
encouragement. I am now standing on the brink of graduation only because you have given
me the strength to pull through every obstacle. I thank God everyday for you, and I only hope
that I do you proud. Ate Maffy, to say that you have been of tremendous help is an
understatement. Your assistance has been invaluable, your advocacy an inspiration. You are
my one-person cheering squad, believing I could finish my thesis even as I believed it an
impossible feat. Ate Biffy, thank you for bearing with me, for lifting my spirits and for
always being so thoughtful as to provide nourishment even when you are busy and tired from
work. Lola and Uncle Sammy, your mere presence gives me comfort and joy, and I can't wait
to be home again in Baguio.

Gayzelle, you never got off my back about finishing my thesis and for that I am eternally
grateful. The support and encouragement you have given me through all this warrants much
more than a movie treat. I promise something nicer as soon as I get a job or win the lottery,
whichever comes first. Sheng, my soul sister, I would be a complete mess without you as my
confidant and sounding board. The long talks with you about my problems and petty issues
have cleansed my system of these distractions and provided me with a much-needed focus in
writing this paper.

To my UPM batchmates and BFFs Jem, Lea, Marie, Ayla, Peter, Moises, Erwin and Zai,
thank you for the friendship and for being such political science enthusiasts that every meet
is a mind-widener and an intellectual treat. My gratitude also goes out to my PolSci Batch
2010 friends Shandi, Feb, Charm, Peach, Darcy, Carla, Fress, Bea, Bel, and Aira, for taking
an oldie like me in and treating me as one of their own. College would not have been as fun
and rewarding without you guys.

To my fellow DFPeers: Hazel, Luna, Gina, Ari, Paul, Rhea, Marney, and Chiqui – I chose my
topic with our group in mind. It's tough enough to deal with our condition without worrying
about the cost too. I thank you for the inspiration, and for the friendship that heals.

I owe my deepest gratitude to my professors and mentors in the University who have taught
me so much more than what was included in the syllabus. Dr. Jojo Tayag, Prof. Carl Ramota,
Prof. John Ponsaran, Prof. Doti Abaya, and Atty. Natalia Nepomuceno, I am greatly humbled to
have had the chance to be under your tutelage. Sir Carl, my thesis adviser and perennial prof, I
thank you especially for your guidance throughout these years. I believe I have grown greatly as
a student of society because of it.

I would also like to thank Dr. Gene Nisperos of the Health Alliance for Democracy for
providing me with a treasure trove of data on the Cheaper Medicines Act, aside from granting me
an interview. I am likewise greatly indebted to Health Action Information Network for providing
me with invaluable resources.

I offer my heartfelt thanks to Atty. Blas Viterbo, Mr. Reiner Gloor and Ms. Jo Innocencio for
indulging my interview requests, as well as to the kind and helpful personnel at the House of
Representatives Bills and Index Service who assisted me in procuring the bills I needed.

Above all, I thank God who continues to amaze and overwhelm me with His greatness. “We
were born to make manifest the glory of God that is within us,” Maryanne Williamson once said,
and I am beyond honored to shine blindingly for Him.

I dedicate this work to the memory of Mr. Alecks Pabico of the Philippine Center for
Investigative Journalism. Your legacy lives on.
ABSTRACT

On 6 June 2008, Republic Act 9205, popularly known as the Cheaper Medicines Act,
was signed into law by President Gloria Macapagal-Arroyo. It purports to bring down the cost
of medicines in the country and make quality medicines more accessible to Filipinos,
especially the poor. After over two decades of government policies and efforts to make
medicines universally accessible, will this law be the one to live up to its promises?
The impact of a law or policy is of course best assessed with experience over time, since
the manner of its implementation will have an important bearing on its effect in reality. Short of
this, however, it is possible to analyze how much of a policy change a law is compared to
previous policies, and correlate the policymaking process to the degree of reform that the law
contains.
In analyzing the policymaking process, a conceptual framework was used based on the
analysis by Merilee Grindle and John Thomas on policymaking processes in developing
countries. Grindle and Thomas explored how policy elites and the policy environment – which
could either be in a state of crisis or non-crisis – shape the content of the reform being pushed.
This paper posits that the Cheaper Medicines Bill was initiated in non-crisis circumstances and
continued to propagate in an environment of politics-as-usual, as demonstrated by the length of
time it took to be enacted, an apparent absence of a sense of urgency among the policymakers,
their initial lack of interest, and the nature of the provocation that catapulted the bill into the
limelight of public interest—an allegation of corruption rather than the strong sense of need for
cheaper medicines now.
Consistent with Grindle and Thomas’ analysis of policy reform in an environment of
politics-as-usual, the policy shifts in the Act are largely incremental rather than innovative. The
central construct of the law is consistent with the previous policy direction of government
approaching the medicines issues from the supply side by trying to foster competition.
This paper concludes that the incremental shift in policy is reflective of the politics-as-
usual environment that the Act was constructed in. Nonetheless, it is strongly recommended that
further studies on the Cheaper Medicines Act be done regarding the processes of policy
implementation.
Table of Contents

Chapter One: Introduction 1


Introduction 1
Research Question and Objectives 3
Self-Reflexivity 3
Review of Related Literature 4
Conceptual Framework 12
Theoretical Framework 13
Methodology 15
Ethical Aspects of the Research 16

Chapter Two: Issues in Access to Medicines in the Philippines 17


The National Medicines Situation 17
The Drug Industry: Perpetuating Monopoly 21
Government Policies and Programs 25

Chapter Three: The Cheaper Medicines Act 27


Formulation of Republic Act 9502 27
Content of Republic Act 9502 33
Comparison of Republic Act 9502 with Previous Government Policies 38

Chapter Four: Setting the Policy Agenda 41


The Environment: Crisis or Politics-as-usual? 41
The Policy Elites 43
The Stakeholders 45
Criteria for Choices 49
Agenda Setting: The Process of Decision Making 53

Chapter Five: Conclusion and Recommendations 56


Appendix A: Provisions introduced in House Bills and Senate Bills 58
vis-à-vis Provisions in the Cheaper Medicines Act

Appendix B: Interview Transcripts 64

Appendix C: Letters of Request for Interview 75


and Informed Consent for Research Participants

Bibliography 76
Chapter One

INTRODUCTION

“Medicine has imperceptibly led us into the social field and placed us in a position of
confronting directly the great problems of our time.

"For if medicine is really to accomplish its great task, it must intervene in political
and social life. It must point out the hindrances that impede the normal social
functioning of vital processes, and effect their removal.”

Dr. Rudolf Virchow (1821-1902)

Introduction

The burden of expensive medicines has been borne by Filipinos for decades. In a country

where one-third of the population live in poverty, according to government figures, much of

medicines is still paid for by patients and their families as out-of-pocket expenses. The stories of

Filipino patients dying because they could not afford the medicines that could have saved them

are nothing new, but no less appalling.

On 6 June 2008, Republic Act 9205, popularly known as the Cheaper Medicines Act, was

signed into law by President Gloria Macapagal-Arroyo. It is a measure that primarily purports to

bring down the cost of medicines in the country and make quality medicines more accessible to

Filipinos, especially the poor, and it intends to do so through amendments involving several laws

as well as other reforms. In the last year leading to its enactment, it was constantly in a place of

prominence in the national consciousness. It was heralded by the Arroyo administration, authors

of the bill in the Senate and House, the media, and much of the public as a significant remedy

1
that will finally bring down the prices of medicines and alleviate the suffering of poor, sick

Filipinos.

After over two decades of government policies and efforts to make medicines universally

accessible, will this law be the one to live up to promises? The impact of a law or policy is of

course best assessed with experience over time, and the manner of its implementation will have

an important bearing on its effect in reality. Short of this however, it is possible to appraise the

substance of the law itself through the assessment of the degree of reform or change in policy

that it introduces, though this may or may not accurately predict actual impact due to the factor

of implementation. It is also of interest to the researcher to study the relation between the policy-

making process and the final outcome—that is, the degree of reform or policy shift that it carries

in its provisions—of the Cheaper Medicines Act.

This study then aims to critically assess the Cheaper Medicines Act in light of whether it

represents significant policy shifts or reforms in the issues of access to medicines, and the

relation of the policy-making process it has undergone to the final form of the law. To

accomplish this, this paper will first present an overview of the situation of access to medicines

in the Philippines and a brief analysis of the factors and issues that have brought about the

situation. It will be followed by an overview of government policies addressing the issues in

access to medicines through the years, and an analysis of the Cheaper Medicines Act with regard

to the reforms it introduces vis-à-vis the previous government policies. Finally, this paper will

relate the degree of reform in the Cheaper Medicines Act to its policy-making process using as a

framework the analysis by Merilee Grindle and John Thomas of the policy-making process in

developing countries.

2
Research Question and Objectives

Research question: How does the policy-making process of the Cheaper Medicines Act relate to
the degree of reform or policy changes introduced by this new law?

General Objective: To analyze the policymaking process of Republic Act 9502 (Cheaper
Medicines Act of 2008) and relate this to the degree of reform or change in policy that it
introduces

Specific Objectives:
1. To describe the current situation in the Philippines with regard to:
1.1. the state of access to medicines
1.2. the factors contributing to this state, including the Philippine pharmaceutical industry
2. To describe the degree of reform or policy change in the Cheaper Medicines Act
2.1 To describe past government policies regarding or affecting access to medicines
2.2. To describe the main provisions in the Cheaper Medicines Act and compare these to
past laws and policies
3. To analyze the legislative process in the formation of the Cheaper Medicines Act
3.1 To describe the events in the passage of the Cheaper Medicines Bill through Congress
3.2 To determine the policy environment and circumstances surrounding the formation of
the Cheaper Medicines Act
3.3 To identify the policy elites and stakeholders and their interests and stand

Thesis Statement: The politics-as-usual policy process of the Cheaper Medicines Act is reflected
in a law that does not represent a significant change in policy.

Self-Relexivity

The researcher chose the topic because she knows firsthand the burden of expensive

medicine. She takes medication that costs PhP120 per day, with no cheaper alternative because

3
of patent rights. Some of her family members take medicine regularly as well, and the total cost

comprises a big portion of the family’s monthly expenditure.

With two older sisters in the health sector, the researcher has been exposed to a myriad of

issues concerning healthcare, the most striking of which is the apparent hegemony of

pharmaceutical companies. Indeed, during her regular check-ups with her doctor, the researcher

has observed the overwhelming presence of medical representatives (or “med reps”) of big

pharmaceutical companies who try to get the doctors to prescribe their particular brand of

medicine. That the med reps occupy the entire waiting room of the clinic while the patients are

left waiting outside in the hallways is deemed by the researcher to be very typical of the drug

industry in general.

A Republic Act addressing the problem of unaffordable medicine is therefore a very

welcome piece of legislation for the researcher, who stands to benefit along with the countless

others saddled by the weight of or totally unable to afford expensive medicine. However, the

researcher is adamant to know whether the Cheaper Medicines Act upon closer scrutiny will live

up to its promise.

Review of Related Literature

The review of literature for this study will focus on material pertaining to the right to

health, the health situation, and the drug industry in the Philippines. Some news articles on the

Cheaper Medicines Act would likewise be reviewed briefly.

The Universal Declaration of Human Rights asserts that everyone has the right to a

standard of living adequate for the health and well-being of himself and of his family, including

4
food, clothing, housing and medical care and necessary social services.

In the International Covenant on Economic, Social and Cultural Rights, of which the

Philippines is a party, Article 12 declares that the party states must recognize the right of

everyone to enjoy the highest attainable standard of physical and mental health. The steps to be

taken to realize this right include those necessary for the provision for the reduction of the

stillbirth-rate and of infant mortality and for the healthy development of the child; the

improvement of all aspects of environmental and industrial hygiene; the prevention, treatment

and control of epidemic, endemic, occupational and other diseases; and the creation of conditions

which would assure to all medical service and medical attention in the event of sickness.1

In Article 13 of the 1987 Constitution of the Republic of the Philippines, health is

declared a social right. According to the Constitution, it is the State’s duty to adopt an integrated

and comprehensive approach to development, and give priority to the needs of the

underprivileged, sick, elderly, disabled, women and children. The State is also tasked to establish

and maintain an effective food and drug regulatory system and undertake appropriate health,

manpower development, and research, responsive to the country's health needs and problems.2

The IBON Databank provides an overview and basic indicators of the state of the nation’s

health. 80 percent of the population struggle to survive on P560 or less a day, with the poorest 10

percent of families having incomes of P88. 46 million Filipinos go hungry every day and are

unable to meet minimum nutritional needs, as wages are not enough to sustain a decent life. As

of October 2009 the living wage is estimated at PhP 894.00 in the NCR for a family of six.

However, the daily minimum wage is PhP 382.00, which is PhP 512.00 less than the living wage.

Moreover, prices of basic goods are rising faster than wages.

1
International Covenant on Economic, Social and Cultural Rights. 1966.
2
Constitution of the Republic of the Philippines. 1987.

5
In the Human Development Report 2009 by the United Nations Development

Programme, among 182 countries, the Philippines ranked 105 in terms of government spending

on health as a percentage of total government expenditure.

In the article Human Rights Week: Violations Of Economic, Social Rights Worsening

Under Arroyo Administration by IBON Foundation, it is reported that the Arroyo administration

has the lowest record of health spending compared to the past three administrations. Since 2001,

it allocated an average of only 1.8 percent for health, compared to 3.1 percent under the Aquino

administration, 2.6 percent under Ramos, and 2.4 percent under Estrada. In the 2010 national

budget, the allocation for health fell by 7.4 percent from 2009, or an average of only P1 per

Filipino per day.3

According to The State of the Nation’s Health – Issues and Challenges by Gene Alzona

Nisperos of the non-governmental organization Health Alliance for Democracy, the leading

causes of illnesses are still poverty-related: pneumonia, diarrhea, and tuberculosis. There is also

disparity between economic classes when it comes to health. 83 percent of children from top

quintile receive at least the EPI vaccines while only half of children from the lowest quintiles

receive these vaccinations.4 Likewise, 92 percent of women in the upper quintiles have

professionals attending to them while only 25 percent of poor women give birth with

professional attendance. There is inequity in access to health services wherein only the rich can

afford the most modern technologies while the poor majority have little hope of availing state-of-

the-art interventions.5

Regarding the cost of medicines, The State of the Nation’s Health – Issues and

3
"Human Rights Week: Violations Of Economic, Social Rights Worsening Under Arroyo Administration." IBON
Foundation. 11 December 2009 <http://info.ibon.org/ibon_articles.php?id=3>.
4
Gene A. Nisperos “The State of the Nation’s Health – Issues and Challenges”. Health Alliance for Democracy,
2008.
5
Ibid.

6
Challenges says that the Philippines have remained to be the second highest in Asia, next to

Japan. It proceeds to discuss the status of generic drugs in the Philippines. Generic drugs account

for only 4 percent of total drug sales in the country. 6 The prevailing belief among many

consumers and physicians is that generic drugs are of lower quality than branded one, which is

largely due to the high profitability of branded marketing.7

The article New Rx Needed for Generics Movement by Alecks Pabico posted in the

website of the Philippine Center for Investigative Journalism (PCIJ), affirms the dismal sales of

generic drugs. In 1988, the Philippines enacted a law on generics in consonance with the national

drug policy of President Corazon Aquino. Republic Act. No. 6675 (Generics Act of 1988) sought

to promote, require, and ensure the labeling, prescribing, and dispensing of medicines using their

generic names. However, twenty years later, the consensus among stakeholders in the healthcare

sector is that the implementation and effect of the landmark Generics Act has been dismal. Even

the health department admits that its enforcement has not been that good.8

The Prices People Have to Pay for Medicines in the Philippines by Dennis B. Batagan of

the Institute of Philippine Culture of the Ateneo de Manila University discusses the context of

access to medicines, the pharmaceutical industry, and a study measuring drug prices. According

to the research paper, the Philippines is classified by WHO as among the countries where less

than 30 percent of the population have regular access to essential drugs.

The development of the drug industry in the Philippines began with the establishment of

a pharmaceutical laboratory in Manila in 1900, which was known then as Laboratorio Hizon

(now Hizon Laboratories). This was followed in 1913 by the commercial production of Tiki-Tiki

by another company owned by Manuel Zamora. In 1918, the Philippine-American Drug


6
Ibid.
7
Ibid.
8
Alecks Pabico. “New Rx Needed for Generics Movement.” Philippine Center for Investigative Journalism, 2006.
<http://www.pcij.org/i-report/2006/generics.html>.

7
Company (Botica Boie) introduced home remedies extracted from local medicinal plants. Before

World War II, there were close to 20 drug manufacturers, mostly owned by Filipinos, using

manual techniques in manufacturing. After the Second World War, there was an influx of foreign

pharmaceutical firms in the Philippines as the government encouraged foreign investments to

reconstruct the war-torn economy. In 1946, the Philippine Wholesale Druggist Association

(PWDA), later changed to Drug Association of the Philippines (DAP) was formed by the ten

leading pharmaceutical groups of Manila. It was only in 1991 that DAP’s name was changed to

its present name, Pharmaceutical Healthcare Association of the Philippines (PHAP).9

By 2002, the estimated total pharmaceutical market was already PhP 65.7 billion

(approximately US$1.34 billion). The top ten leading corporate groups with respect to their share

the total market include: Unilab (18.68%), Glaxo Smith Kline (10.08%), Pfizer Inc. (6.59%),

Wyeth Philippines (5.47%), Astra Zeneca (4.76%), Bristol Myers Squibb (4.66%), Novartis

(3.47%), Abbott Laboratories (3.27%), Roche Philippines (3.16%), Boeringer Ingelheim

(3.06%). According to the Philippine Chamber of Pharmaceutical Industries (PCPI), 72% of the

total market is controlled by foreign companies. The rest of the pharmaceutical market (28%) is

shared by United Laboratories (25%), and small Filipino-owned drug firms and other

multinational firms jointly owned by Filipinos and foreigners (5%).10

Most of the drug companies operating in the Philippines are among the biggest

companies in the Philippines and also in the global markets. Of the top 29 drug firms in the

Philippines, there are only six Filipino-owned companies, some of which even have foreign

partners. There have also been mergers of the bigger foreign-owned companies creating even

bigger transnational companies.11


9
Batagan, Dennis B. “The Prices People Have to Pay for Medicines in the Philippines.” Institute of Philippine
Culture – Ateneo de Manila University, 2005.
10
Ibid.
11
Ibid.

8
Drug manufacturing in the Philippines is still wholly dependent on imported raw

materials and chemicals. About 95 percent of the materials compounded in the country are

imported and the industry is dependent on products discovered and developed in another

country.12

Under this arrangement, a local company acquires a patented technology from a foreign

company under certain conditions and prices. Licensing agreements may either be voluntary or

compulsory. Voluntary licensing is entered between a foreign company (the licensor) and a local

firm. Most local drug manufacturers prepare foreign brands through licensing agreements.

Compulsory licensing, on the other hand, needs the permission of the local patent office, now

called the Intellectual Property Office, and has to comply with certain provisions of the World

Trade Organization TRIPS (Trade Related Aspects of Intellectual Property Rights) and Public

Health Agreements.13

The book Drug Industry in the Philippines by the Databank and Research Center of

IBON Foundation, Inc. likewise contains extensive information about pharmaceutical

transnational companies (TNCs) in the country and how their operation translates to high prices

of medicines. The book looked at the extent of TNC control over the drug industry, determined

the changes in the industry brought about by a more liberal economy and WTO policies, and

assessed the impact of these changes on the workers of the Philippine drug industry. As in The

Prices People Have to Pay for Medicines in the Philippines, the book also states that drugs in the

country are more expensive because the local drug industry depends heavily on drug TNCs for

raw materials, technology and finished goods. Because of this dependence, drug TNCs are

therefore able to impose whatever price they want for their raw materials, chemicals and

12
Ibid.
13
Ibid.

9
pharmaceuticals. Filipino consumers, on the other hand, are left with little choice and spend a

huge amount for these medicines.14

With a more liberalized global market economy today, drug companies face greater

competition globally and nationally. To survive this intense competition, mergers and

acquisitions among different drug companies have become common. Many companies also pull

out their operations in countries in their continual search for “competitive” operational expenses.

However, these developments have not resulted in the decline of retail prices of pharmaceutical

products.

The World Trade Organization (WTO), of which the Philippines is a member, under its

Agreement on TRIPS, grants the TNCs greater exclusivity to produce and make superprofits

from their patented drugs. Through the TRIPS, the WTO protects the TNCs’ investments,

through patents, copyrights, and licenses of drug products, including the patenting of life forms.

. The State of the Nation’s Health – Issues and Challenges points out the monopolies in the

manufacturing, distribution and retailing of drugs. Approximately 80 percent of toll

manufacturing for MNCs is done by one company, Interphil, while about 65-70 percent of

wholesale distribution is handled by a sister company, Zuellig Pharma. 15 More than 60 percent of

all drugs is sold through Mercury Drug which has more than 600 outlets versus the 25,000 total

drug outlets.16 Due to these, local pharmaceuticals are inhibited. Among the problems they face

are lack of technology, stunted research and development, and difficulty registering products

with BFAD due to financially prohibitive requirements. 17 As regard to why the prices of

medicine in the country are so high, the following reasons were given: monopolies in all aspects

of the industry, monopoly pricing, weak regulation and monitoring of drug quality, lack of
14
Drug Industry in the Philippines. Databank and Research Center, IBON Foundation, Inc., 2001.
15
Nisperos, “State of the Nation’s Health.”
16
Ibid.
17
Ibid.

10
regulation of drug promotion, stunted local industry, and inherent limits and weak

implementation of government programs.

Several news articles in the PCIJ website report about the formulation, debates and

finally the passage of the Cheaper Medicines Bill into law. As maintained by Alecks Pabico in

Postscript to a Long-overdue Legislation, the bill’s approval had not been an easy one, attesting

to the high-stakes political and economic interests involved in its crafting. It was a piece of

legislation certified urgent by the Arroyo administration since 2001; however, the bill only came

close to being enacted into law in the last three years. 18 It took the bicameral panel more than

three months to come up with a compromise version that was most acceptable to its members,

who had clashed over the bill’s more contentious issues, particularly the House of

Representatives’ “generics only” provision and later, its proposal to create a drug price regulatory

board which had threatened to delay its passage even more.19

In another article by Alecks Pabico entitled Draft Law Affirms Patent Rights of Drug

Firms, he reported that the generics-only provision was dropped and the price –regulation board

was replaced with a price monitoring and control mechanism that places the sole authority to

impose price ceilings on the President, upon recommendation of the health secretary. But, as the

PCIJ reports, there are worries that the “simplistic debates” on price regulation and the Generics

Act amendments had obscured the bill’s intellectual property provisions, resulting in their not

being fine-tuned and rid of their inherent weaknesses.

Conceptual Framework

18
Alecks Pabico. “Postscript to a Long-overdue Legislation.” Philippine Center for Investigative Journalism. 2008.
<http://pcij.irg/i-report/2008/postscript.html>.
19
Ibid.

11
As evident in the dire medicines situation in the country today, current government

policies regarding the problem are ineffective and inadequate. A significant change in policy is

therefore needed in order to effect a significant change in the health situation as well.

Legislation that presents a significant change in policy, and therefore adequately and

appropriately addresses the problem of expensive and inaccessible medicines (dependent

variable), can only come about if the problem is considered and treated as urgent and critical by

the decision-makers; if there is in-depth technical study of the issue; and if consensus building

and grassroots participation are observed. However, some factors (intervening variables X) such

as pressure and influence from stakeholders and the personal interests of legislators may affect

the process of policy formulation.

Ideally, the dependent variable would lead to affordable and accessible medicines,

improved health, improved well-being of citizens which improves performance, intellectual,

physical & social resources of the nation, and a better life for all. However, there are some

12
factors (intervening variables Y) that may lead to the failure of the law, such as the capacity of

government to implement, effectiveness of implementation, political will, and the influence of

powerful entities such as drug companies.

Theoretical Framework

This study will make use of Merilee Grindle and John Thomas' “Public Choices and

Policy Change: The Political Economy of Change in Developing Countries” in examining the

legislative process that culminated in the Cheaper Medicines Act.

By studying the informational, demographic and economic characteristics, policy

environments in developing countries are generalized as being uncertain. In developing

countries, information critical in the decision-making process is generally inadequate and

unreliable. These countries are also characterized by low income, reliance on agricultural

production, and the emergence of more complex urban societies. State control is likewise

established in economic management.20

Decision-making in developing countries is also highly centralized. Having its roots in

colonial past, this tends to increase the government's power and decrease its accountability to the

population.21

The structural characteristics, together with the centralization of decision-making

responsibilities, place decision-makers in critical roles in developing countries.22

These decision makers are the policy elites. They are those who have positions in the

government and whose responsibilities include making or participating in making and

20
Merilee Grindle and John Thomas. Public choices and policy change: The political economy of change in
developing countries. (Baltimore: Johns Hopkins University Press, 1991) 48.
21
Ibid. 51.
22
Ibid. 49.

13
implementing authoritative decisions for society.23 They usually include heads of state and

ministers, the executive bureaucracy, and legislators. Societal interests, such as business

interests, religious elites, the military, and organized labor, also exert influence in decision-

making, however, they are often likely to be represented through informal processes rather than

through votes or visible lobbying activities.24

Given the environment of centralized and relatively closed decision-making in which

policy elites in developing countries work, they play much more decisive roles than those in

Western industrialized countries.25

Grindle and Thomas also discuss the circumstances in explaining how, why and when

policy decisions are made. Circumstances of crisis or non-crisis have clear implications for the

processes and dynamics of decision making, but they do not necessarily affect the outcome of

those processes which is the content of the reform initiative. 26 Whether a crisis exists or not

affects which problems, pressing or chosen, are addressed by the decision makers. It also

determines whether innovation or incrementalism is to be undertaken. The stakes also vary, as

well as the status of decision-makers, and the timing of the introduction of reforms.

Crisis-ridden reforms are usually adopted or rejected in conformance to the priority of

maintaining political stability, while politics-as-usual reforms frequently reveal the priorities of

political support and bureaucratic implications. Reforms in time of crises also tend to raise the

salience of macropolitical concerns, whereas an environment of politics-as-usual often invokes

micropolitical concerns.27

Grindle and Thomas likewise present the criteria for choices of the policy elites, or what

23
Ibid. 63.
24
Ibid. 63.
25
Ibid. 68.
26
Ibid. 74.
27
Ibid. 105.

14
they call the "four lenses." These are technical advice, bureaucratic implications, political

stability and support, and international pressure.

The authors point to this multiplicity of influences and concerns as a reason why decision

makers frequently make mistakes in judging the political and economic consequences of the

choices they make.28

Using this framework by Grindle and Thomas, this study will determine the policy

environment existing in the Philippines and who the policy elites were in the crafting of the

Cheaper Medicines Act. It will further explore whether the Act was formulated in a situation of

crisis, as perceived by the policy elites, and how this affected the way that they formulated the

law.

Methodology

Data for this study was acquired mainly through documentary research which included

books, journals, newspaper articles and internet sources. A copy of the Cheaper Medicines Act

and its Implementing Rules and Regulations were acquired from Health Action Information

Network (HAIN), a non-government organization which has been conducting symposia and

conferences regarding the Cheaper Medicines Act since the bill’s inception. Position papers of

different stakeholder groups, government departments and international bodies were likewise

obtained from HAIN.

Copies of the House Bills and Senate Bills were acquired from the Bills and Index

Department of the House of Representatives and the bills archive of the websites of the House

and the Senate.

28
Ibid. 104.

15
To supplement the data acquired through documentary research, the researcher also

conducted Key Informant Interviews with stakeholder organizations and the proponent of the

Cheaper Medicines Act.

Ethical Aspects of the Research

The methodology of this research included not only archival research but key informant

interviews with legislators and representatives of interest groups as well. The rights of the

participants were the foremost consideration, and the interviews proceeded only upon procuring

the consent of said participants (see Appendix C for Informed Consent forms).

The participants were briefed about the study's purpose, objectives and procedures, and

assured of the confidentiality of the data accumulated and that it would only be used in the

analysis of the study. The researcher made it clear to them that their participation was entirely

voluntary and should they decide to terminate their involvement, they have the freedom to do so

and at any time they wish. It was also assured that upon their request, their identity and other

personal information will not be disclosed.

In addition, all materials, books, journals and other documents that were used or referred

to were properly cited and documented using footnotes.

Chapter Two

16
ISSUES IN ACCESS TO MEDICINES
IN THE PHILIPPINES

The issues affecting access to medicines in the Philippines are convoluted. This is an

attempt to give a concise overview of the situation in the Philippines, the factors that have

brought on the situation, and past government programs and policies that have aimed to solve the

problem.

The national medicines situation

Health is a right, and the responsibility of ensuring this rests on the state – this is

provided for in our Constitution and other international treaties to which the Philippines is a

party. But the reality today suggests that rather than a right, health has become an economic

privilege.

In the Philippines, there are more than 17,000 registered drugs of which only a little over

600 are essential.29 The Philippines is classified by the World Health Organization (WHO) as

among the countries where less than 30 percent of the population has regular access to essential

drugs. A study done by the WHO shows that drug prices in the country are one of the highest in

the world and the second highest in Asia, next to Japan. 30 Table 1 shows the comparison of

prices of select drugs in the Philippines and neighboring countries Thailand and Malaysia.

Table 1. Comparison of Prices of Select Drugs in


the Philippines, Thailand and Malaysia (in Philippine Pesos)

29
“Why are Medicines Expensive in the Philippines? A Primer.” Council for Health and Development.
30
Nisperos, “State of the Nation’s Health.”

17
Drug Philippines Thailand Malaysia

cotrimoxazole 14.41 3.76 8.37


(Bactrim, Roche)
metoprolol 15.17 9.66 8.26
(Betaloc, Astra Zeneca)
nifedipine 19.97 13.42 10.98
(Adalat, Bayer)
Prices based on drugstore chain with 1998 sales of US$2M

Since 1985, the price of drugs has increased faster than the consumer price index. 31 The

cost of a month’s treatment with captopril for hypertension for a minimum-wage earner takes up

30 percent of the monthly income for a higher-priced brand, or 12 percent for a generic product.

A 4-week course of ranitidine for peptic ulcer disease consumes 42 percent of the monthly

income for a high-priced brand, and 15 percent for a generic product.32

The price of the hypertension drug Norvasc (generic name amlodipine) is also

considerably higher in the Philippines than in Thailand, Indonesia and India despite it being

manufactured by only one pharmaceutical company, Pfizer (see Table 2.) Other drugs produced

by a common pharmaceutical company are likewise cheaper in Pakistan and India than in the

Philippines, as shown in Table 3.

Table 2. Comparison of Prices of Norvasc (by Pfizer)


in the Philippines, Thailand, Indonesia and India (in Philippine Pesos)
Drug Generic Name Philippines Thailand Indonesia India
Amlogard

31
Dennis B. Batagan.“The Prices People Have to Pay for Medicines in the Philippines.” Institute of Philippine
Culture – Ateneo de Manila University, 2005.
32
Nisperos “State of the Nation’s Health.”

18
Norvasc Amlodipine 74.57 45.65 37.93 8.96
10 mg

Norvasc Amlodipine 44.75 26.65 21.00 5.98


5 mg

Published in Philippine Daily Inquirer April 3, 2006

Table 3. Comparison of Select Branded and Generic Drugs in Prices


(Philippines vs. India and Pakistan in Philippine Pesos)
Brand Name Generic Name Company Phil. Price India Price Pakistan
Price
Bactrim Co-trimoxazole Roche 14.80 0.75 1.09
400/80mg tab
Ponstan Mefenamic Acid Pfizer 20.98 2.80 P1.46
500mg tab
Ventolin Salbutamol Glaxo 315.00 132.38 65.88
100mcg inh
Adalat Retard Nefedipine Bayer 37.56 1.50 3.85
20mg tab
Fortum Ceftadizime Glaxo 980.00 418.72 322.75
1g inj
Based on the Philippine International Trading Corporation (PITC) Presentation to the Senate
Committee on Trade and Commerce Hearing held on November 24, 2005.

As with most developing countries, the Philippine government shoulders only a small

portion of pharmaceutical costs. Table 4 shows that the government shoulders only 2% of the

total cost of pharmaceuticals.

Table 4. Public Spending as Percentage of Total Spending on Pharmaceuticals

19
Source: Nisperos 2008

In many urban areas, where there is an abundance of drug store chains and pharmacies,

price is the main issue. But in rural areas, the problem of physical availability of medicines as

well comes into prominence. In a survey of medicine prices and availability in 2009, the

availability of medicines was found to be at a median of 31 percent for generic products in

government facilities, even as low as 10 percent in some public outlets.33

Aside from the prices and availability of medicines, irrational drug use is also a critical

problem. The rampancy is reflected in the leading therapeutic classes in the country in terms of

sale by counting units: infant formula, vitamin and mineral preparations, cough medicine, and

food supplements34 – substances that very few patients have medical reason to use. Irrational

drug use can result in harm and unnecessary expense for the patients and their families.

At the core of all these is the issue of quality. A drug must first and foremost be of good
33
“A Survey on Medicine Prices and Availability in the Philippines,” Health Action Information Network . 2009.
34
Pharmaceutical Industry Fact Book, 7th Edition. Pharmaceutical Health Care Association of the Philippines. 2008.

20
quality to be of benefit. Doubts have been cast over the quality of generic benefits, with some

going as far as to equate “generics” with “counterfeit.” Critics have accused drug companies

with top branded products of this propaganda.35

The drug industry: perpetuating monopoly

The Philippine medicines situation is a dire and complex one, with drug companies

seeming to dominate every aspect of it. A “free market” policy has been the standing approach of

government for over two decades. Competition in the form of generic medicines was presumed

to bring down prices to affordable levels. And yet now, many manufacturers seem to be

unthreatened by generics as they continue to sell their products at sky-high prices.36

In 2007, the Philippine drug market was pegged at about US$ 2.61 billion – seventy two

percent of this is controlled by TNCs. In 2006, TNCs cornered 70 percent of the US$ 124 million

worth of medicines sold in the country.37

Based on the data from the Securities and Exchange Commission (SEC), 11 multinational

pharmaceutical firms operating here generated P62.1 billion in combined revenues in 2007, up

P6.7 billlion, or more than 12 percent versus the P55.4 billion they posted in 2006.38

. Meanwhile, multinational pharmaceutical companies raked in a combined P6.96 billion

in after-tax net profits from their Philippine operations in 2007, an increase of about 16 percent

or P970 million compared to the P5.99 billion they posted in 2006. Though the income of the

industry has increased by 7.4 percent last July 2006 and by 16 percent in 2007, the quantity of

medicine sold decreased. Hence, the increase was brought about by the dramatic soar in prices

35
Pabico, “New Rx Needed for Generics Movement.”
36
Edelina dela Paz. “Ensuring Access to Safe, Affordable and Quality Essential Medicines.” 2010.
37
“Why are Medicines Expensive in the Philippines.”
38
Ibid.

21
and not by the quantity of medicine sold.39

All aspects of the local drug industry are monopolized – from manufacturing and

distribution to the retailing of drugs.40 Approximately 80 percent of toll manufacturing for TNCs

is done by one company, Interphil, while about 65-70 percent of wholesale distribution is

handled by a sister company, Zuellig Pharma. More than 60 percent of all drugs is sold through

Mercury Drug which has more than 600 outlets versus the 25,000 total drug outlets in the

country.41 Many advocates point to this state of monopoly as the main cause for the exorbitant

medicine prices in the Philippines.

Certain mechanisms in the pharmaceutical industry enable monopoly and even promote

it. The Philippine patent law, patterned after American patent law and compliant with treaties of

the World Trade Organization, gives a 20-year patent to the originator of a medicine molecule,

usually granted before the start of clinical trials. Large transnational corporations, who have the

technology and vast resources needed for research and development of a new drug, hold the

majority of patents. Upon completion of the clinical trials and approval of the drug for the

market, the company will have about 10 years to manufacture and sell the medicine under a

patent.42

Pharmaceutical TNCs often justify patenting and high drug prices by arguing that

research and development (R&D) of drug products requires big investment. 43 Moreover, they

claim that even though new drugs may cost considerably more, they can significantly lower

health costs down the road.44 Industry estimates for R & D costs are in the range of $350-500

39
“Why are Medicines Expensive in the Philippines?”
40
“IPR and the Philippine Pharmaceutical Industry.” Health Alliance for Democracy. 2 May 2007.
41
Drug Industry in the Philippines.
42
Dela Paz.
43
Drug Industry in the Philippines 77.
44
Kathleen F. Phalen “Why Drug Costs Soar.” 2000
<http://www.virginiabusiness.com/edit/magazine/yr2000/sep00/rx.html>.

22
million, while independent estimates run at $30-160. Whichever figure is used, it is very small

relative to the billion-dollar revenue drug TNCs generate every year.45

In addition, it is claimed that many patented drug products were not discovered by TNCs

and that public-funded institutions and universities were largely responsible for the initial R&D

of a number of important medicines.46

The patent system is said to provide incentives for companies to develop new drugs.

However, maneuvers around the system have enabled companies to hold onto their monopoly

beyond the allotted period by law. One mechanism employed by companies is evergreening,

which refers to ways used by patent holders to prolong the monopoly usually by filing patent

applications on their product shortly before the expiration of the original patent. Such

applications are filed for different isomeric forms, derivatives, dosing route, biological targets,

and so on for the same molecule.47

The Uruguay Round of the General Agreement on Tariffs and Trade (GATT), which

established the World Trade Organization (WTO), produced a multilateral agreement called

TRIPS or the Agreement on Trade-related Aspects of Intellectual Property Rights. 48 In the 2001

Doha Round, WTO allowed flexibilities in TRIPS largely due to the clamor of country members,

particularly from Africa, who had become even more severely marginalized as a result of WTO

policies. Country members can now override existing patents in the interest of public health.

Since then, such moves have been met with opposition and lawsuits from companies and their

supportive governments, as in the case of Sanofi Aventis versus the government of Thailand over

the latter’s move to give out a compulsory license for clopidogrel.49


45
Drug Industry in the Philippines 77.
46
Ibid. 77.
47
P. De Vera “Unilab, Pfizer figure in drug war.” The Manila Times. 28 October 2009
<http://www.manilatimes.net/index.php/top-stories/4825-unilab-pfizer-figure-in-drug-war>.
48
Drug Industry in the Philippines 45.
49
J. Mathew. “Sanofi may sue Pune firm for Thai exports.” Business Standard. 4 September 2007.

23
Transfer pricing is another mechanism by which a transnational company can inflate the

final cost of the drug. In transfer pricing, local manufacturers buy their raw materials from the

mother company at almost three times the cost. It accounts for 30 percent to 40 percent of the

market price.50

Advertising and promotions are also powerful mechanisms employed by companies.

Operating and selling expenses account for about 40.5 percent of the average manufacturer costs.

Selling costs and advertising and promotion costs, including conferences and sponsorships, are

about 28 percent of the total cost.51

These factors and mechanisms have resulted in the dominance of transnational companies

and one local company, while the rest of the local industry remains stunted. Filipino-owned drug

firms depend on TNCs for the basic chemicals they need to manufacture their product. 52 In its

Factbook released in 2003, Pharmaceutical and Healthcare Association of the Philippines

(PHAP) stated that about 95 percent of the materials compounded in the country are imported,

and the industry is concentrated on manufacturing products discovered and developed elsewhere.

Local drug companies are either mere re-packers, or they pay foreign-owned drug firms a royalty

to manufacture medicine.53

Government policies and programs

The government has taken steps in the past to address the problem of expensive and
<http://www.business-standard.com/india/storypage.php?autono=296809>.
50
IPR and the Philippine Pharmaceutical Industry.
51
Pharmaceutical Industry Fact Book, 7th Edition
52
Drug Industry in the Philippines.
53
IPR and the Philippine Pharmaceutical Industry.

24
inaccessible medicines in the country. Among these are the National Drug Policy, the Generics

Act of 1988, the Local Government Code of 1991, and the Botika ng Barangay program.

In 1987, Pres. Corazon Aquino articulated the Philippine National Drug Policy, consisting

of the “QRST” pillars which stood for quality assurance, rational drug use, self-reliance, and

targeted procurement.54 In 1992, Department of Health Secretary Juan Flavier added the “P”

pillar for people empowerment.55 The vision was of quality essential medicines for all Filipinos,

and a strong, self-sufficient local drug industry. The Generics Act of 1988 was one of the initial

manifestations of this policy. However, challenges to the National Drug Policy soon became

apparent. Implementation of the Generics Law was delayed for two years, following the

“request” of physician groups. Initial vigilance in monitoring the implementation also waned

with changes in DOH administration.56 Today, generic drugs account for only 4 percent of total

drug sales in the country. This is said to be partly due to the prevailing belief among many

consumers and physicians that generic drugs are of lower quality than branded ones. 57 Dismal

enforcement and implementation of the law are also seen as a reason. Many advocates lament

that the Generics Law has not been able to fulfill its intention and potential.58

Another piece of legislation that had impact on the medicines situation is the Local

Government Code of 1991. Devolution of health care delivery at the primary level to local

government units created a new problem of provision of drugs by LGUs. In some areas,

medicines became another source of corruption and tool of politics and patronage, which resulted

in the maldistribution of medicines. Meanwhile, in other areas, local governments were able to

construct more efficient systems to procure and dispense medicines to patients under their

54
Dela Paz.
55
Ibid.
56
Pabico, “New Rx Needed.”
57
Nisperos, “State of the Nation’s Health.”
58
Pabico, “New Rx Needed.”

25
jurisdiction. The devolution resulted in disparities in access to medicines in different areas.59

The government then established the Botika ng Barangay (BnB) in 1996 to partly address

this situation. The program aimed to provide an initial stock of medicines worth ₱25,000 to the

local government or non-government organization that will run the outlet. However, a recent

European Commission study on the functionality, monitoring and cost of the BnB program

concluded that the botikas often had low economic viability and little control and information

about dispensing.60

Chapter Three

THE CHEAPER MEDICINES ACT

59
Dela Paz
60
P. Vera. “Contribution of Botika ng Barangays to improved access to essential medicines.” Presentation to MeTA
(Medicines Transparency Alliance) 3rd National Forum. 26-27 January 2010, Manila, Philippines.

26
Formulation of Republic Act 9502

In the 13th Congress, the Cheaper Medicines Bill as it was popularly known, initially

sought to amend the Philippine patent law to make room for flexibilities provided under the

World Trade Organization’s Trade Related Aspects of Intellectual Property Rights or WTO-

TRIPS.61 It had already been introduced during the 11th Congress and refiled in the 12 th by

former Representative of the 5th District of Iloilo and now Vice Governor Rolex Suplico. 62 It was

not a popular legislation among the members of the Senate and the House of Representatives

because of the technical issues surrounding intellectual property rights. It wasn’t until an event

involving drug company representatives at the House of Representatives during the 13th Congress

that the debate for affordable and accessible medicines was brought to the forefront.63

On 21 February 2007, lawyers from a prominent law firm showed up at the session hall

to monitor and lobby against the bill’s passage. A few minutes later, Rep. Ferjernel Biron went

ballistic and confronted the lawyers. Apparently, one of the lawyers has passed a note to Rep.

Teddy Boy Locsin with the message, “We desperately need someone to question the quorum

now. Can you do it?” The note also requested Rep. Locsin to call Mr. Leo Wassmer, vice-

president and Chief Executive Officer of the Pharmaceutical Healthcare Association of the

Philippines or PHAP. Rep. Locsin then threw the lawyers out of the session hall with the media

at their tracks.64

The lawyers were later identified as representatives of PHAP. Since that event that was
61
“Backtrack: Reliving the campaign for affordable medicines.” Cut the Cost, Cut the Pain Network (3CPNet). 6
May 2009 <http://3cpnet.wordpress.com/>.
62
Sandra Araneta. “Cheaper medicine law watered down.” Philippine Star. 14 March 2010
<http://www.philstar.com/Article.aspx?articleId=557769&publicationSubCategoryId=65>.
63
3CPNet.
64
Ibid.

27
deemed an attempt by the pharmaceutical industry to influence the policy-making process in

their favor, the Cheaper Medicines Bill became a symbolic legislation.65

However, on 5 June 2007, The House of Representatives failed to pass the bill due to a

lack of quorum. The Senate had already passed on third reading Senate Bill 2263, but House Bill

6035 failed to pass in time for the closing of the 13th Congress.66

In President Gloria Macapagal-Arroyo’s 7th State of the Nation Address, given on 23

July 2007, she urged Congress to resurrect and approve the Cheaper Medicines Bill that failed to

pass during the last Congress. "I ask Congress to pass the Cheaper Medicines Bill that was

almost enacted in June. Almost is not good enough," the President said in her SONA before the

joint session of Congress.67

On the following day, 24 July 2007, Speaker of the House Jose De Venecia declared that

the cheaper medicines bill can be passed in 45 days and that he will submit a program to ensure

attendance with punitive actions against those who are habitually absent. The attendance

program was prepared by Majority Leader Arthur Defensor and Rep. Michael John Duavit of

Rizal, Juan Edgardo Angara of Aurora and Amelita Villarosa of Occidental Mindoro.68

170 congressmen threw their support behind the measure, according to Iloilo Rep

Ferjenel Biron, principal author of HB 1, a resurrected version of the Cheaper Medicines Bill.

However, Representatives Biron & Garin expected the House version to be eventually shot down

by the camp of Senator Mar Roxas.69

65
Ibid.
66
Veronica Uy. “Roxas slams House failure to pass bill for cheaper medicines” Inquirer.net. 5 June 2007 <
http://services.inquirer.net/print/print.php?article_id=69557>.
67
“PGMA urges Congress to resurrect cheaper medicines bill.” SONA 2007 News Releases. Office of the Press
Secretary Online. 23 July 2007 < http://www.news.ops.gov.ph/sona2007-news.htm#PGMA%20urges>.
68
Christian V. Esguerra. “Congress to push cheap medicine bill.” Inquirer.net. 24 July 2007
<http://newsinfo.inquirer.net/breakingnews/nation/view/20070724-78542/Congress_to_push_cheap_medicine_bill>.
69
Christian V. Esguerra. “Cheaper medicines bill gets backing of 170 solons.” Inquirer.net. 5 August 2007
<http://newsinfo.inquirer.net/inquirerheadline/nation/view/2007080580736/Cheaper_medicines_bill_gets_backing_
of_170_solons>.

28
On 2 October 2007, the Senate approved on second reading Senate Bill 1658, also known

as “An Act to Provide for Quality and Affordable Medicines,” with Senator Mar Roxas as its

principal sponsor.70 President Arroyo once again made another call for the passage of the bill on

14 December 2007, urging the House of Representatives to finish deliberations on the measure

before Congress goes on Christmas break on December 21.71

On 17 December 2007, the House of Representatives approved on second reading its

version of the cheaper medicines bill. Through voice-voting, the 240-strong chamber passed

House Bill 2844 known as "An Act Providing for Cheaper Medicines and for Other Purposes." A

little over 200 legislators were listed as authors and co-authors of the bill.72

The approval came despite strong opposition from Cebu Rep. Pablo Garcia, an

administration ally, who questioned a provision in the bill that would amend the Intellectual

Property Code. According to Quirino Rep. Junie Cua, vice-chairman of the committee on trade

and industry, the only major amendment made to the bill was on the effectivity of price

regulation following the creation of the Drug Price Regulatory Board. The committee proposed

that the power of the board to regulate retail prices commence 12 months after the measure takes

effect.73

On 5 November 2007, the Senate approved on third and final reading SB 1658. 74 More

than a month later, on 18 December 2007, the House of Representatives likewise approved on

70
Veronica Uy. “Senate approves cheaper medicines bill, 4 other measures.” Inquirer.net. 2 October 2007.
<http://newsinfo.inquirer.net/breakingnews/nation/view/20071002-92079/Senate_approves_cheaper_medicines_bill
%2C_4_other_measures>.
71
Lira Dalangin-Fernandez. “Arroyo renews call for passage of cheaper medicines measure.” Inquirer.net. 14
December 2007 <http://newsinfo.inquirer.net/breakingnews/nation/view/20071214-
106882/Arroyo_renews_call_for_passage_of_Cheaper_Medicines_measure>.
72
Maila Ager and Christian Esguerra. “Cheaper medicines bill passes second reading.” Inquirer.net. 17 December
2007 <http://newsinfo.inquirer.net/breakingnews/nation/view/20071217-107374/
(UPDATE_3)_Cheaper_medicines_bill_passes_second_reading>.
73
Ibid.
74
Veronica Uy. “Senate passes over 30 bills.” Inquirer.net. 12 May 2008
<http://newsinfo.inquirer.net/breakingnews/nation/view/20080612-142152/Senate-passes-over-30-bills>.

29
third and final reading its version of the cheaper medicines bill amid claims that big

pharmaceutical firms tried to block its passage. All 205 lawmakers present in the plenary voted

in favor of the consolidated HB 2844.75

The passage came after months of intense debates and alleged efforts by pharmaceutical

firms to delay, water down or archive the measure. Akbayan Rep Risa Hontiveros accused the

United States Trade Representative's Office in Manila of attempting to influence the

deliberations on the bill apparently to favor transnational pharmaceutical companies, many of

them US-based. Hontiveros earlier distributed to reporters copies of a "position paper" she said

was being circulated by the US Trade Rep's Office among members of the House committee on

trade and industry that was steering the bill's passage through the House. The position paper

contained comments and suggestions, purportedly coming from the US government, on how

certain provisions of HB 2844 can be worded.76

Shalimar Vitan, policy coordinator of the UK-based Oxfam international aid agency, said

that the document was also intended for the Philippines' Intellectual Property Office. It was an

"unseen hand" trying to influence the bill. Palawan Rep Antonio Alvarez, chairman of the House

committee on trade and industry, said that he had been approached by the office of the US trade

rep regarding its concerns about HB 2844. The American Chamber of Commerce had also

written to Jose De Venecia.77

After a four-hour bicameral conference committee meeting on the cheaper medicines bill

on Feb 20, 2008, Senator Roxas said that the cheaper medicines bill was stuck over the generic

provision requiring doctors to prescribe only generic drugs. He stated, however, that they have

75
Maila Ager and Christian Esguerra. “House approves cheaper medicines bill.” Inquirer.net. 18 December 2007
<http://newsinfo.inquirer.net/breakingnews/nation/view/20071218107597/UPDATE_2_House_approves_cheaper_m
edicines_bill>.
76
Maila Ager and Christian Esguerra. “House approves cheaper medicines bill.”
77
Ibid.

30
basically agreed on the premises of most of the bill's provisions.78

The Senate panel was concerned that the generics-only provision would create more

problems at the point-of-sale, according to Cayetano. And aside from giving the sales people at

the pharmacies more leverage in the choice of brands, inspectors of the BFAD will be hard-

pressed with overseeing its implementation.79

On 12 April 2008, President Arroyo declared that the Executive Branch would not push

for the inclusion of a “generics only” provision in the cheaper medicines bill in order to ensure

its quick passage, saying that “the country cannot make the poor and the sick wait much longer.”

She further added that generics-only provision would have made the measure ideal but if it was

becoming an obstacle in passing the bill, then the provision may be taken out. The bill had been

languishing at the bicameral conference committee level since the Christmas break because of

the controversial generics provision.80

Senator Roxas welcomed PGMA's decision to drop the generics-only provision, and

urged her to convince her House allies to remove the contentious provision. Rep. Garin said she

was personally in favor of dropping the generics only version, but it didn’t follow that the other

members of the House contingent at the bicameral committee would feel the same way. She

suggested that the Generics Law be amended so that penalties could be included for violations of

its provisions, particularly the one requiring that doctors write the generic name of the prescribed

drugs along with their branded names.81

On 29 April 2008, Congress ratified the final version of the law, officially called

78
Veronica Uy. “Generics provision stalls cheaper medicines bill Ok – Roxas.” Inquirer.net. 20 Feb 2008 <
http://newsinfo.inquirer.net/breakingnews/nation/view/20080220-120041/Genrics-provision-stalls-cheaper-
medicines-bill-Ok--Roxas>.
79
Ibid.
80
Christine Avendano. “Palace drops generics only in cheaper medicines bill.” Inquirer.net. 12 April 2008 <
http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20080412-129875/Palace-drops-generics-only-in-cheap-
medicine-bill>.
81
Ibid.

31
82
“Universally Accessible Cheaper and Quality Medicines Act of 2008.” Immediately after the

calling of the roll, Deputy Majority Speaker Floor Leader Neptali Gonzales moved for the

ratification of the bicameral conference report on the proposed Cheaper Medicines Act. Bayan

Muna Representative Teodoro Casino stood up and asked that he be given at least 10 minutes to

read the contents of the report, prompting Gonzales to withdraw his motion. The motion was

later reinstated and carried.83

Sen. Roxas said that it took lawmakers three years, hundreds of hours spent on committee

hearings and technical working groups, and four months of bicameral committee discussions, to

finalize the bill. He thanked his bicameral committee co-chairman Rep Antonio Alvarez and

other members of the panel for signing the report.84

All Senate panel members signed the bicameral committee report. San Juan Rep. Ronaldo

Zamora was the only House panel member who voted against the report on account of the

removal of the provisions on generics only prescription and drug price regulatory board. South

Cotabato Rep. Arthur Pingoy Jr., chair of the House committee on health and a medical doctor,

signed the report but put on record his reservations regarding the proposed amendments to the

generics law.85

President Arroyo signed Republic Act 9502, or the "Universally Accessible Cheaper and

Quality Medicines Act of 2008," into law on 6 June 2008. She directed DOH to come up with the

implementing rules and regulations (IRR) within 20 days.86

82
Amita Legaspi. “Senate ratifies cheaper medicines bill.” GMA News.TV. 29 April 2008
<http://www.gmanews.tv/story/92264/Senate-ratifies-Cheaper-Medicines-Bill>.
83
Maila Ager and Veronica Uy. “Congress ratifies cheaper medicines bill.” Inquirer.net. 29 April 2008
<http://newsinfo.inquirer.net/breakingnews/nation/view/20080429-133435/UPDATE-Congress-ratifies-cheaper
medicines-bill>.
84
Ibid.
85
Ibid.
86
Lira Dalangin-Fernandez. “Arroyo signs cheaper medicines law.” Inquirer.net. 6 June 2008
<http://newsinfo.inquirer.net/breakingnews/nation/view/20080606-141099/UPDATE-2-Arroyo-signs-cheaper-
medicines-law>.

32
Content of Republic Act 9502

The Universally Accessible Cheaper and Quality Medicines Act of 2008 or RA 9503

includes amendments to 3 laws: the Intellectual Property Code of the Philippines (1997), the

Generics Law (1988), and the Pharmacy Law (1969, amended 1987). The Act likewise

introduces new features such as the strengthening of the Bureau of Food and Drugs, medicine

price regulation, the non-discriminatory clause and various miscellaneous provisions.

General Provisions

The Declaration of Policy, Section 2, states that an effective competition policy in the

supply and demand of quality affordable drugs and medicines is recognized by the State as a

primary instrument to promote and ensure access to affordable quality medicines for all. In the

event that full competition is not effective, the State recognizes as a reserve instrument the

regulation of prices of drugs and medicines.87

Section 3 declares the construction in favor of the protection of public health, in which

all doubts in the implementation and interpretation of the provisions of the Act, including its

implementing rules and regulations, are to be resolved in favor of protecting public health.

Amendments to the Intellectual Property Code (IPC)

The Act narrows down the definition of products and processes that can be patented. It

excludes the following from being patented: mere discovery of a new form or new property of

a known substance with NO enhancement of known efficacy, mere discovery of any new
87
Universally Accessible Cheaper and Quality Medicines Act of 2008. Republic Act 9503. Section 1, Chapter 1.

33
property or new use for a new substance, and mere use of a known process unless it results in

a new product that employs at least one new reactant.88 This is intended to prevent patent

“evergreening” or applying for another patent on the same product or process before the

existing patent expires.

The Act also incorporates the principle of international exhaustion, which allows the

Philippines to access drugs that have been introduced elsewhere in the world even if the drugs

have not been introduced in the Philippines.89

The Act also includes an “early working provision,” allowing other parties or

companies to test and manufacture their own generic versions even before patent expiry for

the purposes of submitting information required for approval by the BFAD/FDA. This

basically enables other companies to prepare their generic products and have them approved

and registered, ready to be sold as soon as the patent expires.90

The Act adds conditions under which the government or a third party can override a

patent, to include a condition allowing the Secretary of Health to recommend doing so if the

demand for the drug is not being adequately met. Under these new conditions, the government

or third party must do the following: (1) notify the patent-holder “as soon as reasonably

practicable”, (2) limit scope and duration of overriding the patent to the purpose for which it

was authorized, (3) pay the patent-holder adequate remuneration, and (4) be aware that the use

is non-exclusive.91

The Act allows special compulsory licensing, or the parallel importation of patented

medicines by government or private third-parties. Parallel importation refers to importing

products of a company through a different channel than that established by the company in the
88
Ibid. Sec. 5, Ch. 2.
89
Ibid. Sec. 7, Ch. 2.
90
Ibid. Sec. 7, Ch. 2.
91
Ibid. Sec 8, Ch. 2.

34
country. Conditions for special compulsory licensing are that it should be primarily intended

for domestic consumption, that adequate remuneration/compensation be paid to patent owner,

and that license for the grantee be issued to exercise reasonable measures to prevent re-

exportation of imported products.

Drugs and Medicines Price Regulation

Section 7 declares that the power to impose maximum retail price (MRP) and

determine the duration of regulation is held by the President, upon recommendation of the

Secretary of Health. Only the Supreme Court can issue a TRO of this. The tasks and powers of

the Secretary of Health include the following: (a) recommend maximum retail prices, (b)

establish price monitoring and regulation system, (c) include drugs to be subjected to price

regulation other than those already on the list in Section 23, (d) impose administrative fines

and penalties, (e) deputize government entities, and (f) require submission of documents and

records to aid him in these tasks.92

Medicines that can be subjected to price regulation include all drugs and medicines

indicated for treatment of chronic illnesses and life threatening conditions; drugs and

medicines indicated for prevention of diseases, e.g. vaccines, immunoglobulin, anti-sera;

drugs and medicines indicated for prevention of pregnancy, e.g. oral contraceptives; anesthetic

agents; intravenous fluids; drugs and medicines that are included in the Philippine National

Drug Formulary (PNDF) Essential Drug List; and all other drugs and medicines which, from

time to time, the Secretary of the Department of Health determines to be in need of price

regulation.

In accordance with the provision on reporting and public notice, LGUs and DTI must
92
Ibid. Sec 18-19, Ch. 3.

35
submit quarterly price monitoring reports and any other information that the Secretary of

Health may require. Drug outlets must post the order of the President regarding price

regulation in conspicuous areas.

Strengthening of the Bureau of Food and Drugs

The Director of the BFAD is authorized to retain all the fees and other charges

collected by the BFAD for use in its operations such as upgrading of its facilities, equipment

outlay, human resource development and expansion. 93 Five years from the implementation of

the Act, if the Director of BFAD and the Secretary of Health determines that BFAD’s

collections are sufficient for its operations, then BFAD will cease to receive funds from the

National Budget.94

The BFAD must also submit a yearly performance report to the Quality Affordable

Medicines Oversight Committee,95 and ensure that all imported drugs meet WHO standards.96

Non-discriminatory Clause

The non-discriminatory clause states that it is unlawful for retail drug outlets to refuse

to carry drugs that have been imported by the government or its authorized third party. These

products must be displayed with equal prominence as other products in the store.97

Amendments to the Generics Act

The Act provides for increased penalties for violation of the use of generic

93
Ibid. Sec 31, Ch. 4.
94
Ibid. Sec 31, Ch. 4.
95
Ibid. Sec 31, Ch. 4.
96
Ibid. Sec 32, Ch. 4.
97
Ibid. Sec. 33, Ch. 5.

36
terminology as prescribed by the Generics Act. 98 It also requires that there appear prominently

on the label of a generic drug the following statement: THIS PRODUCT HAS THE SAME

THERAPEUTIC EFFICACY AS ANY OTHER GENERIC PRODUCT OF THE SAME

NAME. SIGNED: BFAD.99

Every drug manufacturing company operating in the Philippines is also required to

produce, distribute and make widely available to the general public an unbranded generic

counterpart of their branded product.100

Amendments to the Pharmacy Law

Non-prescription or over-the-counter drugs may be sold in their original packages,

bottles, containers or in small quantities not in their original containers to the consuming

public through supermarkets, convenience stores and other retail establishments.101

Miscellaneous Provisions

The Act provides for the creation of a Congressional oversight committee referred to

as the Quality Affordable Medicines Oversight Committee. Appropriations are as such: PhP

25 million for the DOH, PHP 5 million for the Quality Affordable Medicines Oversight

Committee.

Comparison of the Cheaper Medicines Law with previous government policies

In comparing the Cheaper Medicines Act with previous policies, this paper considers two

98
Ibid. Sec 41, Ch. 6.
99
Ibid. Sec 38, Ch. 6.
100
Ibid. Sec 39, Ch. 6.
101
Ibid. Sec. 43, Ch. 7.

37
broad frameworks of the role of government in medicines and the spectrum between these two: a

“free market” liberal economic approach, and on the other hand, a more government-regulated

one.

Government policies related to access to medicines started from Pres. Aquino’s National

Drug Policy as a more state-interventionist policy, albeit briefly. Shortly after this

pronouncement, the changes entailed by the Structural Adjustment Program effectively shifted

the policies in medicines to a more liberal framework, abandoning the options of government

production of medicines and shifting much focus away from government promotion of generic

medicines. In the face of government failure to provide universal or near-universal access to

medicines and market failure with very little effective competition to significantly affect

lowering of competing prices even with more liberal policies, subsequent government programs

still did not significantly deviate from liberal economic framework. More recent government

programs, such as the Botika ng Barangay, have approached the issues from the supply side of

the equation by coming into play as a competitor. The other side in the spectrum of policy

options could be opting towards more direct government involvement, such as directly

intervening with pricing policy and directly regulating advertising and promotion.

The changes to the patent law provided for in the Cheaper Medicines Act are consistent

with the government policy of working from the supply side, and using a free market framework

rather than direct regulation. With the country being a member of the WTO, the changes to the

patent system fall within what the WTO allows within the TRIPS framework. The three primary

changes to the patent law are those enabling parallel importation, the early working provision,

and preventing evergreening. The first two of these have actually already been employed by the

DOH and PITC in 2006, even prior to having this legal framework. 102 While these changes allow
102
Tove S. Gerhardsen. "Pfizer Fights IP Flexibilities In The Philippines." People's Health Movement. 30 April 2006

38
new opportunities for the government and other companies to theoretically provide more

competition in the market, the changes are incremental rather than innovative, and occur within

the same policy framework.

Price control is clearer a step towards a policy of direct regulation. The provisions of the

law, however, indicate that it is as a temporary measure to be used as needed and does not seem

to be directed towards integrating price control into a long-term regulatory framework. This sort

of as-needed indication already has a precedent in the Price Act of 1991, allowing for price

controls in certain circumstances, such as a national emergency among other things. 103 In the

spectrum of existing medicine price regulation systems in the world, price control can be done as

a temporary response to an emergency need on one hand, and on the other it can be integrated

into the healthcare system—that is, the prices of medicines are under direct regulation all of the

time. The latter is actually the prevailing system for prescription or reimbursable drugs in many

OECD countries, strongly tied to a health care system with universal coverage.104

The provision allowing BFAD to retain its income, with the goal of discontinuing its

budgetary allocation from the national budget when it becomes financially self-sustaining, is in

line with current government policies of corporatization of institutions. The brunt of changes to

the Generics Act actually involve updating and increasing the monetary fine from its pre-1990’s

levels, and clearly does not represent a significant change in policy.

In summary, the shifts in the Cheaper Medicines Act from previous government policies

are largely incremental rather than innovative or representing significant policy shifts. In the

following sections, the paper will attempt to relate this to the policymaking process of the

Cheaper Medicines Act.


<http://www.phmovement.org/en/node/186>.
103
The Price Act. Republic Act No. 7581. 27 May 1992.
104
K. Tisocki. “Internation experiences with medicine price regulations.” Presentation to MeTA (Medicines
Transparency Alliance) 3rd National Forum. 26-27 January 2010, Manila, Philippines.

39
Chapter Four

SETTING THE POLICY AGENDA

The environment: crisis or politics-as-usual?

To start off the analysis of the policy-making process itself of the Cheaper Medicines Act,

this paper will analyze the environment or circumstances surrounding the initiation of the bill.

40
Grindle and Thomas delineate circumstances surrounding policy-making as either being crisis or

non-crisis, and also describe non-crisis circumstances as “politics-as-usual.” They posit that the

distinction between crisis or politics-as-usual have clear implications for the dynamics and

processes of decision making.105 Crises appear to offer an important moment for reform and

usually result in significant changes in major policies, 106 whereas politics-as-usual situations can

be expected to generate much less impetus for reform, and so stasis rather than change is the

outcome.107 Determining whether the Cheaper Medicines Act was formulated in a circumstance

of crisis or non-crisis will help us gauge the magnitude of change that we can expect to result

from it.

The determination of a situation of an environment of crisis or non-crisis is not always

clear-cut. Grindle and Thomas assert that a crisis is said to exist because the decision makers

perceive that one exists, that there was a general consensus among them that the situation of

crisis was real and of a threatening nature, and they believed that failure to act would lead to

even more threatening economic and political realities.108

The first iterations of the Cheaper Medicines Bill were very inconspicuous, especially

compared to the hype and prominence in its latter stages. It was introduced in the 11th Congress

by then Rep. Rolex Suplico, and again refiled during the 12th Congress; both times he was the

sole author of the bills, and was only later on joined by Rep. Ferjenel Biron during the 13th as a

co-author of the measure.109 At the time, the issue of expensive medicines was not at the forefront

of acute national consciousness. It was not featured prominently in the media, if at all, and

except for some advocacy groups that had been advancing the cause of cheaper medicines from

105
Grindle and Thomas 74.
106
Ibid. 84.
107
Ibid. 84.
108
Ibid. 75.
109
Araneta.

41
the start, the issue was unknown to the general public.

The bill did not gain prominence until the 13th Congress, and notably the spark that set it

aflame was not a direct issue of public clamor for affordable medicines or an event highlighting

the dire consequences of the population not having access to medicines. Rather, it was the “note-

passing” controversy involving the alleged meddling in the legislative process by drug company

representatives from the large transnational companies of PHAP. This event, initially protested

by several NGOs who had been following the formulation of the bill from the start, was brought

to media attention and quickly gained a prominent place in public awareness. The cheaper

medicines bill was henceforth considered a landmark measure because it was deemed to be a

fight of the poor and the sick, the expected beneficiaries of the bill, as well as their advocates,

against the powerful pharmaceutical companies – a sort of David versus Goliath story.

Despite the increasing public interest and pressure, along with several politicians

including the President taking to publicly highlighting their role and interest in the passage of the

bill, it failed to pass in the House of Representatives on third reading due to a lack of quorum. 110

The failure of passage of the bill incited Pres. Arroyo to call for it during her State of the Nation

Address. It was not until the 14th Congress that the bill was finally passed.

That it took the Philippine legislature four Congresses before passing the law is a telling

sign that there was no real sense of urgency involved. This, with the lack of initial interest by the

policymakers and nature of the provocation that catapulted the bill into the limelight of public

interest, strongly suggests that the bill was initiated in non-crisis circumstances, and, as the

following sections will discuss, continued to propagate in an environment of politics-as-usual.

The Policy Elites


110
Uy, “Roxas slams House.”

42
A central thesis in Merill and Grindle’s analysis is the importance of “policy elites” in

driving reform and policy changes in developing countries. They are said to have a greater

power in decision-making than policymakers in Western countries, due to the history of

centralization that colonial histories have bestowed.111 In this section, we determine the policy

elites in the Cheaper Medicines Act, the options they were for and against, and explore how their

backgrounds and ideologies may have shaped these choices in decision-making.

This paper identifies two important “policy elites” that have driven the content and

passage of Cheaper Medicines Act: Senator Mar Roxas and President Gloria Macapagal-Arroyo.

An important player who warrants mentioning is Rep. Ferjenel Biron, who was at the forefront in

pushing for the House of Representatives’ version of the bill, but was ultimately unable to push

his provisions into the final version of the law.

Senator Manuel Araneta Roxas II, more popularly known as Mar Roxas, was the main

proponent of the bill during the 14 th Congress and is pegged the Father of the Cheaper Medicines

Law. Roxas’ background is rooted in economics and investment banking prior to engaging

directly in politics, first as the Representative of the 1st District of Capiz from 1993-2000, then

the Secretary of the Department of Trade and Industry, and in 2004 as Senator.112

Senate Bill 2263, which Roxas co-authored with Senator Pia Cayetano, focused mainly

on amending the Intellectual Property Code to incorporate the TRIPS flexibilities. He was

against a drug price regulatory board and the generics-only provision.

According to Roxas, the main objective of the IP Code amendments is to foster

competition, which would bring down the prices of medicine. 113 His strong opposition toward a

drug price regulatory board and generics-only provision reflects a preference for minimal

111
Grindle and Thomas 63.
112
“Senator Mar A. Roxas.” Senate of the Philippines. <http://www.senate.gov.ph/senators/sen_bio/roxas_bio.asp>.
113
Viterbo, Blas James G. Personal Interview. 3 March 2009

43
government intervention. And indeed, this free market view and business-friendly approach is

consistent with past policies he had crafted. As Secretary of DTI, he pioneered the establishment

of high-technology industry centers and the promotion of the business process outsourcing

market in the country, particularly call center operations. As Representative, one of the laws he

passed was RA 8756 or Act Amending the Omnibus Investments Code of 1987, which

incentivizes the establishment of regional headquarters to encourage investment and operation of

multinational companies in the country.114 Even as Roxas allies himself with the political

opposition, he in fact shares much of the liberal economic framework of Pres. Arroyo’s

administration.

Roxas has been particularly vocal in the media in relation to the Cheaper Medicines Act,

especially during the last year of its formulation and well into its implementation. More than this

media prominence, it is noted that the final version of the Act follows his proposed provisions

more closely than other law-makers.’

President Gloria Macapagal-Arroyo’s background in economics is well known, and is

manifested by the liberal policies that has been the framework and direction of her

administration. As described in Chapter Four, after the bill had started to gain public prominence,

Arroyo publicly brandished the bill several times as a priority measure of her administration,

urging Congress to pass the Cheaper Medicines Bill in her 7 th SONA in July 2007, and then once

again making another call for the passage of the bill in December 2007, urging the House of

Representatives to finish deliberations on the measure before Congress went on Christmas break.

When the bill was languishing at the bicameral committee level due to the debate over the

generics-only provision, Arroyo declared that the Executive Branch would not push for the

inclusion of such in the bill in order to ensure its quick passage, and subsequently the provision
114
“Senator Mar A. Roxas.”

44
was scrapped in the final version.

Ferjenel Biron, the representative of the 4 th District of Iloilo, is a medical doctor by

profession, having earned his Doctor of Medicine degree from the West Visayas State University

in 1989. He then became chairman and CEO of Philippine Pharmawealth, Inc. and Pharmawealth

Labs, Inc. from 1994 to 2004,115 a company that distributes generic medicine and has been

embroiled in controversies regarding substandard medicines in 2001.116

HB 1, which Biron co-authored with Rep. Jose Carlos Lacson, provided for the

establishment of a drug prices regulation board. During the bicameral committee meetings, this

provision came under heavy fire, as the Senators vehemently argued against it.

The Stakeholders

Stakeholders are actors, whether persons, groups or institutions, with a vested interest in

the policy being promoted.117 As such, they are those who attempt to influence the policy-making

process, whether through formal or informal means. The departments, organizations, and interest

groups presented here are those that were prominent during the period of formulation of the

Cheaper Medicines Act.

One of the most visible groups was the Pharmaceutical and Healthcare Association of the

Philippines. Founded in 1946, PHAP is a business association representing research-based

115
“Biron, Ferjenel G., M.D.” Member Information - 14th congress. House of Representatives Official
Website.
< http://www.congress.gov.ph/members/search.php?congress=14&id=biron-f>.
116
Edmund B. Sestoso. "BFAD's capability to monitor medical products doubted." Sunstar. 26 January 2008
<http://www.sunstar.com.ph/static/dum/2008/01/26/news/bfad.s.capability.to.monitor.medical.products.doubted.
html>.
117
Kammi Schmeer. “Stakeholder Analysis Guidelines” Policy Toolkit for Strengthening Health Reform, Partners
for Health Reform. Washington D.C. 2000.

45
companies of pharmaceuticals and medical services.118 PHAP is currently composed of 65

member companies and all multinational companies are part of it. 119 PHAP lobbied intensely

during the deliberations of the Cheaper Medicines Bill, and there have even been alleged

attempts by them to delay, water down or archive the bill.120

PHAP emphasized their concern regarding some of the proposed amendments to the IP

Code, because "strong patent protection is fundamental in motivating players in any industry to

allocate resources to new discoveries."121 While PHAP supported the Bolar type exception, they

were against parallel importation which they feared would compromise safety and lead to the

proliferation of counterfeit medicines.122 They were also strongly opposed to price controls and

the generics-only provision.123

The Philippine Medical Association, the organization of medical practitioners that

develops, monitors and regulates medical practice in the Philippines, 124 was passionate about the

generics-only provision. PMA went as far as threatening to conduct a nationwide Hospital

Holiday, a boycott in which hospitals will refuse to accept patients once every week except for

emergency cases. PMA conducted a nationwide motorcade to signify the doctors’ opposition

against the generics-only provision.125

Other associations that were involved are the Drugstores Association of the Philippines

(DSAP), the Philippine Nurses Association (PNA), the Integrated Midwives Association of the

Philippines (IMAP). DSAP supported price control of pharmaceutical products, but suggested

118
Pharmaceutical & Healthcare Association of the Philippines. <http://www.phap.org.ph/about.aspx>.
119
Committee Report No. 6. Committee on Trade and Commerce, Health and Demography, and Finance. Republic
of the Philippines Senate. 1 October 2007.
120
Ager and Esquerra, “House approves.”
121
PHAP Position on Improving Accessibility to High Quality Affordable Medicines. Pharmaceutical and Healthcare
Association of the Philippines.
122
Reiner Gloor. Personal Interview. 23 February 2009.
123
PHAP Position.
124
“Philippine Medical Association.” Philippine Doctors <http://www.edoctors.com.ph/>.
125
3CPNet.

46
that price regulation be imposed on the manufacturers and distributors and not on the retailers. 126

DSAP had reservations about the non-discriminatory clause, saying that this creates safety risks

and lead to a weakening of the economic viability of small drugstores. 127 Among DSAP’s

suggestions were that there be strict implementation of the Generic Law, support and

development of indigenous sources of medicines, regulation of advertisements and sales

promotion, and promotion of rational drug use.128

PNA was in favor of compulsory licensing for medicines and parallel importation. They

suggested that government provide greater support to local drug companies by giving them

incentives such as tax holidays, and assist them in building up their research and development

capabilities. PNA was among those that supported the enforcement of price controls of essential

drugs.129

IMAP was in favor of the amendments to the IP Code 130 and stated that participation of

governmental regulatory agencies on the manufacture, construction, sale and use of the product

was very much welcome.131

Among the international bodies that attended the Congress deliberations and submitted

technical reports and position papers were the World Health Organization, OXFAM, Cut the Cost

Cut the Pain Network or 3CPNet, and the Third World Network or TWN. They all supported the

amendments to the IP Code which incorporated the TRIPS flexibilities. 132 WHO was strongly

opposed to price control.133

126
Statement of Support to Legislative Acts Intended to Lower the Costs of Medicines in the Philippines. Drugstores
Association of the Philippines.
127
Josephine P. Inocencio. Personal Interview. 24 February 2009.
128
Statement of Support, DSAP.
129
Position Paper on the Pending Bill Seeking Access to Quality and Affordable Medicines for the People.
Philippine Nurses' Association. 2 September 2007.
130
Committee Report No. 6.
131
Position Paper on Senate Bill H101. Integrated Midwives Association of the Philippines.
132
Committee Report No. 6.
133
Policy Brief for Senate Bills 90, 101, 755 and SRN 49. World Health Organization.

47
Non-government organizations and interest groups also presented their views and

suggestions to Congress. Health Alliance for Democracy or HEAD stated that selective parallel

importation, compulsory licensing, direct price regulation, a transitory drug price regulatory

board, provision of incentives to local drug manufacturers and the implementation of the

National Drug Policy can provide immediate albeit short term results while long term solutions

are being put in place. Among their suggestions are to review and rescind the country's

commitment to the WTO, especially in terms of TRIPs, develop a national drug industry similar

to the path taken by India and Pakistan, and formulate independent political and economic

policies.134 Kilos Bayan para sa Kalusugan or KBK had a similar position to HEAD’s. 135 Ayos na

Gamot sa Abot-Kayang Preso or AGAP Coalition supported the amendments to the IP Code but

had reservations regarding the non-discriminatory clause and the drug price regulatory board.136

Certain government departments and agencies also participated in the deliberations, as

they would be directly affected by the Cheaper Medicines Act. Among these were the

Department of Health, the Department of Trade and Industry, the Intellectual Property Office, the

Bureau of Food and Drugs, and the Philippine International Trading Corporation. The DOH fully

supported the amendments to the IP Code,137 and while at first they supported the generics-only

provision, they retracted their recommendation with statements saying that 54 percent of

Filipinos were already purchasing generic medicines and thus, the need to amend the specific

provision no longer merited the urgency it was given before. 138 DTI and PITC likewise supported

the IP Code, Pharmacy Law and Generics Acts amendments but had reservations regarding the

134
Position Paper submitted to the Committee on Trade and Commerce and Committee on Health and Demography
of the Senate of the Philippines. Health Alliance for Democracy. 17 September 2007.
135
“A call for low-cost, effective and safe medicine.” Position Paper by Kilosbayan para sa Kalusugan. 24
September 2007.
136
Letter to Senator Mar Roxas. Ayos na Gamot sa Abot-Kayang Presyo (AGAP) Coalition. 10 September 2007.
137
Francisco T. Duque. Position Paper on Committee Report No. 76, Senate Bill 2263. Department of Health.
138
3CPNet.

48
non-discriminatory clause and the creation of a drug prices regulation board which they deemed

redundant. The IPO and BFAD were similarly supportive of the IP Code amendments, saying

that they were consistent with the TRIPS agreement.

(For a comparison of the provisions in the House Bills and Senate Bills vis-à-vis those in

the Cheaper Medicines Act, including the stakeholder groups for or against them, refer to

Appendix A.)

Criteria for Choices

Decision-making situations are often complex, involving policy choices and options that

tend to be numerous and conflicting. Policy-makers may find themselves pushed in different

directions by specific societal and bureaucratic interests, their own preferences and

understanding of the issues involved, the historical and international context within which the

problem has emerged, and a variety of other concerns and influences. 139 Therefore, the end result

of this process – the policy itself – is determined as much by the formal legislative structure and

processes as by the personalities involved in its crafting. The importance, then, of the policy

elites cannot be understated.

Having identified in the previous section the policy elites and prominent stakeholders of

the Cheaper Medicines Act, we now examine how their orientations, the contextual factors that

shape these orientations, and the circumstances surrounding the crafting of the bill interact to

explain the content of their decisions.

Grindle and Thomas present four lenses through which policy elites make their decisions:

(1) the technical advice they receive, (2) the impact of their choices on bureaucratic interactions,

139
Grindle and Thomas 95.

49
(3) the meaning of potential changes for political stability and political support, and (4) their

concern about relationships with international actors. 140 These lenses, in general, help the policy

elites assess the benefits of alternative courses of action and to order their thinking about why

and how reform should occur.141

Decision-makers frequently represent bureaucratic constituencies, and so integral to the

choices they make are concerns about how particular changes will affect the power, prestige,

budget and clienteles of the agency, bureau or office they represent.142 In addition, decision-

makers are generally concerned with how proposed changes affect their own career options. 143

With this in mind, we explore the possible bureaucratic and political motives, if any, of the

policy elites in initiating the Cheaper Medicines Act.

After Mar Roxas garnered the highest votes in the Philippine election history when he ran

as Senator, many people had already made him a potential presidential candidate in the 2010

elections.144 In a news article dated 19 November 2007, former Senate President Franklin Drilon

was quoted as saying that Roxas will be the standard bearer of the Liberal Party come 2010. 145

While Roxas himself had been coy on his plans for 2010, the Roxas for President movement had

been ubiquitous, with the sprouting of Roxas for president spots in cyberspace

(www.marroxas2010.blogspot.com and www.liberalpresident2010.blogspot.com) and his

colleagues endorsing him as the party's standard bearer – Senator Benigno Aquino III declaring

him LP candidate for 2010 and LP chair emeritus Jovito Salonga introducing him as “the next

president of the Philippine republic.”146

140
Ibid. 96.
141
Ibid. 96.
142
Ibid. 138.
143
Ibid. 99.
144
“Roxas is the standard beare of LP in 2010, Drilon says.” Samar News. 19 November 2007
<http://www.samarnews.com/news2007/nov/f1391.htm>.
145
Ibid.
146
Cabacungan, Gil C. Jr. “Battle looming between LP and NP for presidency in 2010.” Inquirer.net.

50
It does not require a stretch of the imagination to correlate the Cheaper Medicines Act,

which is hailed as a landmark legislation that would benefit the sick and the poor, and Roxas’s

presidential aspirations. ‘The Father of the Cheaper Medicines Law” would, after all, no doubt

make for a good campaign epithet.

In studies conducted by Grindle and Thomas, the policy elites were concerned about how

various options would affect political stability, political opposition and support, and the political

use of policy resources.147 Thus, policy reform options were assessed by the decision-makers in

terms of how reactions to them would affect the longevity of the regime in power or the

particular leadership group wielding authority.148 President Gloria Macapagal-Arroyo, who was

vociferous in calling for the passage of the law, was at that time facing a number of issues and

scandals. Among these was the Japan-Philippines Economic Partnership Agreement (JPEPA)

treaty that was signed by Arroyo and former Japanese Prime Minister Junichiro Koizumiin in late

2006, and which aimed to promote investments and trade between the two countries. Various

civil society groups contested the agreement because the government did not consult them.

According to these groups, although the agreement secures employment in Japan, the treaty

includes an unjust bilateral trade.149 Also a prominent headline at the time was activist Jonas

Burgos’ abduction. He went missing in late April 2007 and eyewitnesses said he was dragged

from a mall in Commonwealth to a Toyota Revo by five men. The license plate of the Revo was

traced to the 56th Infantry Battalion camp in Bulacan.150 Extra-judicial killings and forced

disappearances had become so rampant during this time that Supreme Court Chief Justice

4 August 2007 <http://newsinfo.inquirer.net/breakingnews/nation/view/2007080480590/Battle_looming_between


_LP_and_NP_for_presidency_in_2010>.
147
Grindle and Thomas, 101.
148
Ibid. 101.
149
“Scandals under Gloria Macapagal-Arroyo from 2001-2009.” Movement for the Advancement of Student Power.
< http://maspnational.wordpress.com/2009/07/20/scandals-under-gloria-macapagal-arroyo-from-2001-2009/>.
150
Ibid.

51
Reynato Puno led a two-day summit in July 2007 to discuss the problem. 151 Unsurprisingly then,

Arroyo’s approval rating continued to drop, with her public satisfaction rating in the negative

from November 2006 to June 2007.152

More than pandering to a specific influential group for political support, it was important

for Arroyo at that time to improve her reputation among the people and gain a semblance of

public support. The passage of the Cheaper Medicines Act, with its pro-poor sentiment, may

therefore be viewed as a means of garnering support and affirming legitimacy.

The fourth and last factor is the role of international actors and international economic

and political dependency relations in determining the outcome of decision-making about

reform.153 Grindle and Thomas’ studies show that decisions tend to reflect concern about the role

of the international actors and how various options would affect relationships with them. 154 This

is evident in the case of the Cheaper Medicines Act, which operates within the framework of the

TRIPS Agreement of the WTO. Some NGOs and interest groups that have declared TRIPS to be

heavily biased towards multinational corporations have called upon the government to rescind

the country’s commitment to the agreement. The policy elites, however, have instead chosen to

remain faithful to TRIPS, only incorporating the flexibilities that the agreement allows. The

elites may thus be perceived as maintaining and protecting the country’s relationship with the

WTO.

Agenda Setting: The Process of Decision Making

151
Salaverria, Leila. “SC-led summit attempts to stop killings.” Inquirer.net. 16 July 2007
<http://newsinfo.inquirer.net/breakingnews/nation/view/20070716-76824/SC-
led_summit_attempts_to_stop_killings>.
152
“Public Satisfaction with Gloria Macapagal-Arroyo: November 2006 to June 2007.” Social Weather Stations.
<http://www.sws.org.ph/pr070716.htm>.
153
Grindle and Thomas 102.
154
Ibid. 103.

52
In the first section of this chapter, we determined that the policy elites crafted the Cheaper

Medicines Act in a politics-as-usual environment. This has important implications for the

decision making process, since a process set in a non-crisis situation is distinct from that of a

crisis situation in terms of the pressures for reform, the stakes involved in change, the level of

decision makers involved, the degree of change considered, and the timing of reform.155 In this

section, we look at how the perception of non-crisis affected the way the policy elites made their

decisions.

Circumstances of crisis tend to bring pressing problems to the attention of policy elites;

they are those that are forced on the policymakers through pressure from injured or outside

parties.156 In contrast, chosen problems are those that policy elites select more or less

autonomously as priorities or goals to be achieved as a result of their own preferences and

perceptions.157 When Rep. Suplico introduced the cheaper medicines bill in the 11 th Congress, the

problem of expensive medicines, though admittedly dire, was not among the top concerns of the

national government at the time. It wasn’t given much attention at first, suggesting that the policy

elites did not deem it critical or urgent. That the bill didn’t gain traction until two Congresses

later only affirms this. It can be said that the problem of expensive and inaccessible medicines

was chosen by the policy elites as a result of their own preferences and perceptions.

In circumstances of crisis, the stakes are high, often involving fundamental conditions of

economic stability and growth and the future development of the country.158 Meanwhile, the

stakes in noncrisis-ridden reforms tend to be those related to bureaucratic and clientelistic power

relationships.159 The stakes in the Cheaper Medicines Act, which did not involve fundamental

155
Ibid. 76.
156
Ibid. 77.
157
Ibid. 86.
158
Ibid. 154.
159
Ibid. 87.

53
conditions of stability and growth, appear to be the policy elites’ own political careers.

The status of decision makers likewise varies between situations of crisis and non-crisis.

Conditions of crisis tend strongly to move the level of concern upward in the decision-making

hierarchy of the government, while situations in which the crisis threat is low tend to remain at

lower hierarchical levels.160 The policy elites of the Cheaper Medicines Act are notably high-

ranking, even including the President of the Republic herself, which appears to be contradictory

to Grindle and Thomas’s proposition. However, Grindle and Thomas also state that the higher

the perceived stakes, the more likely that high-level officials will take a personal interest in the

decision.161 It can be surmised that the policy elites in the Cheaper Medicines Act have deemed

the stakes – their own political standing and career – to be very high.

Crisis-ridden reforms tend to emphasize major changes from pre-existing policies. This is

because prior policies are often considered to be implicated in the cause of the crisis; thus, they

must be rejected if the crisis is to be overcome. Innovation rather than incrementalism is often

the result.162 Under crisis conditions, change is often incremental, with considerable scope for

trial and error or scaling up if initial efforts provide positive results. 163 Functioning within the

framework of the TRIPS and the existing economic organization, the Cheaper Medicines Act is

not a wide departure from the present policies of liberalism of the current administration.

The theoretical literature on how policy and institutional change comes about strongly

suggests that reforms pursued in noncrisis situations will not be successfully introduced. Indeed,

some of the characteristics mentioned above – particularly incrementalism and timing – mean

that major and rapid changes should not be expected under conditions of politics as usual.

Nevertheless, Grindle and Thomas point out that although changes are generally incremental and
160
Ibid. 78.
161
Ibid. 78.
162
Ibid. 78-79.
163
Ibid. 88.

54
the introduction of reform often slow, politics-as-usual reforms are not necessary doomed to

failure.164 It will be of interest to follow how these incremental changes in the Cheaper Medicines

Act will translate into reality through implementation.

Chapter Five

CONCLUSION AND RECOMMENDATIONS

This paper attempted to relate the degree of reform or policy change in the Cheaper

Medicines Act to the policymaking process that it has undergone.

The shifts in the Cheaper Medicines Act from previous government policies are largely

incremental rather than innovative. The amendments to the Intellectual Property Code, which is

one of the main elements of the Cheaper Medicines Act, aim to lower drug prices by fostering

competition. This free market approach does not fall far from the liberal economic framework of

164
Ibid. 89-90.

55
Pres. Arroyo’s administration.

In analyzing the policymaking process, a conceptual framework was used based on the

analysis by Grindle and Thomas on policymaking processes in developing countries. This paper

posits that the bill was initiated in non-crisis circumstances and continued to propagate in an

environment of politics-as-usual, as indicated by the length of time it took to be enacted, an

apparent absence of a sense of urgency among the policymakers, their lack of initial interest, and

the nature of the provocation that catapulted the bill into the limelight of public interest. The

policymaking process of the Cheaper Medicines Act was also analyzed to be congruous with

Grindle and Thomas’s propositions about the policy decisions that occur in a non-crisis

environment, such as the policy elite’s timing especially with regard to political or bureaucratic

implications of their actions regarding the Cheaper Medicines Bill, choosing issues reflective of

their own interests or specialties, and largely choosing incremental changes rather than

innovation.

Though Grindle and Thomas point out that the policymaking process does not necessarily

determine the content of the policy, this paper concludes that the policy-making process of the

Cheaper Medicines Act has had some bearing on the content, in that the reform or changes in

policy in the final version to the law reflects the politics-as-usual environment that the law was

developed in.

This study has appraised the substance of the law through the assessment of the degree of

reform or change in policy that it introduces. However, this may or may not accurately predict

actual impact due to the factor of implementation. The impact of a law or policy is of course still

best assessed with experience over time, since the manner of its implementation will have an

important bearing on its effect in reality. It is therefore recommended that further studies on the

56
Cheaper Medicines Act be done regarding the processes of policy implementation.

57
Appendix A

PROVISIONS INTRODUCED IN HOUSE BILLS AND SENATE BILLS


VIS-À-VIS PROVISIONS IN THE CHEAPER MEDICINES ACT

The table presents the different provisions contained in the cheaper medicines bills introduced by legislators in the Senate and the
House of Representatives. It shows which specific bill the provision can be found in, the author of the bill, and the stakeholder groups
for or against the said provision. The last column shows whether that provision made it to the final version of the law.

In Cheaper
Provisions Bill/s Author pro against
Medicines Act
Amendments to Intellectual Property Code
SB 90 Villar
SB 1420 Zubiri
Biron, J.
HB 1
Lacson
HB 307 Gullas
HB 672 Locsin
HB 761 Teodoro
AGAP
HB 764 J. Cua
DTI
HB 951 Nograles
non-patentable inventions
HB 954 Baraquel
OXFAM
3CPNet

Puentevell
HB 1244 TWN
a
HB 1381 Chipeco
HB 1398 Del Mar
HB 1656 J. Roxas
HB 1931 Chatto
HB 2200 Yap
HB 2844
inventive step SB 101 M. Roxas OXFAM

58
P.
SB 1404
Cayetano
SB 1530 Legarda
SB 1658
3CPNet
HB 761 Teodoro
Del
TWN 
HB 1199
Rosario
HB 1706 Arroyo
HB 1758 Abaya
SB 101 M. Roxas
P.
SB 1404
Cayetano
SB 1530 Legarda
SB 1658
HB 761 Teodoro AGAP
HB 954 Baraquel OXFAM
limitation of patent rights
HB 1199
Del 3CPNet
DOH 
Rosario TWN
Puentevell
HB 1244
a
HB 1706 Arroyo
HB 1758 Abaya
HB 2844
use of invention by government AGAP
SB 90
SB 101
Villar
M. Roxas DTI 
P. OXFAM
SB 1404 3CPNet
Cayetano
SB 1420 Zubiri TWN
SB 1530 Legarda
SB 1658
Biron, J.
HB 1
Lacson
HB 307 Gullas
HB 672 Locsin
HB 761 Teodoro

59
HB 764 J. Cua
HB 951 Nograles
HB 954 Baraquel
Del
HB 1199
Rosario
Puentevell
HB 1244
a
HB 1381 Chipeco
HB 1398 Del Mar
HB 1656 J. Roxas
HB 1706 Arroyo
HB 1758 Abaya
HB 1931 Chatto
HB 2200 Yap
HB 2844
HB 954 Baraquel
civil action for infringement
HB 2844 
HB 954 Baraquel
HB 1706 Arroyo
compulsory licensing
HB 1122 Pingoy
PNA 
HB 2844
SB 90 Villar
Biron, J.
HB 1
Lacson
HB 307 Gullas
HB 951 Nograles
HB 954 Baraquel
rights conferred
HB 761 Teodoro
AGAP 
Puentevell
HB 1244
a
HB 1656 J. Roxas
HB 1931 Chatto
HB 2844
parallel importation SB 90 Villar DTI PHAP

60
SB 755 Trillanes
SB 1420 Zubiri
Biron, J.
HB 1
Lacson HEAD
HB 307 Gullas PITC
HB 672 Locsin PNA
HB 764 J. Cua OXFAM 
HB 951 Nograles 3CPNet
HB 1381 Chipeco TWN
HB 1384 Del Mar
HB 1656 J. Roxas
HB 1931 Chatto
SB 1420 Zubiri
Biron, J.
HB 1
Lacson PHAP
HB 307 Gullas DTI
HB672 Locsin PITC
early working
HB 764 J. Cua OXFAM 
HB 951 Nograles 3CPNet
HB 1381 Chipeco TWN
HB 1398 Del Mar
HB 1931 Chatto
Amendments to Pharmacy Law
SB 755 Trillanes
HB 2174 Gonzales
HB 2200 Yap
Velarde
non-traditional outlets
HB 2389
Coscolluel
DTI 
a
Tieng
HB 2844
Amendments to Generics Act
creation of Generic Drug Board SB 268 Legarda
SB 435 Estrada 
61
PHAP
generics-only in prescriptions HB 2844 DOH
PMA 
Drug Price Regulation
SB 90 Villar
SB 1530 Legarda
SB 1420 Zubiri
Biron
HB 1
J. Lacson
HB 307 Gullas
HB 717 Pingoy
DTI
HB 761 Teodoro
AGAP
HB 951 Nograles HEAD
Drug Price Regulation Board
HB 1398 Del Mar PNA
PITC
PHAP

HB 1816 G. Cua PMA
Ocampo,
Maza,
HB 2492 Casiňo,
Beltran,
Ilagan
HB 2711 Syjuco
HB 2844
Drug and medicines price monitoring and
regulation authority of the president
of the Philippines and secretary of DOH
SB 1658 AGAP 
establishment of a Prescription Drug Price
SB 970 Villar
Monitoring Commission

PHAP
Strengthening of BFAD SB 1658
PITC 
Miscellaneous Provisions
non-discriminatory clause SB 90 Villar DSAP
HB 1
Biron, J. DTI 
Lacson AGAP
HB 672 Locsin

62
HB 764 J. Cua
HB 951 Nograles
HB 1381 Chipeco
HB 1398 Del Mar
HB 1931 Chatto
HB 2200 Yap
HB 2711 Syjuco
HB 2844
Ocampo,
Maza,
implementation of the National Drug Policy HEAD
and the Generics Act of 1988
HB 2492 Casiňo,
Beltran,
DSAP 
Ilagan
HB 717 Pingoy
Ocampo,
tax and other incentives to the local Maza, HEAD
pharmaceutical industry HB 2492 Casiňo, PNA 
Beltran,
Ilagan
HB 717 Pingoy
regulation of advertisements and sales HEAD
promotion
HB 2200
HB 2174
Yap
Gonzales
DSAP 

63
Appendix B

INTERVIEW TRANSCRIPTS

Reiner Gloor, Executive Director


Pharmaceutical and Healthcare Association of the Philippines (PHAP)
2 February 2009

Lorraine Bermejo (L): So first, I would just want to know what was your organization's
participation in the formulation of the cheaper medicines act.

Reiner Gloor (RG): PHAP attended the congressional and Senate hearings wherever industry
was invited. They had hearings which were closed door hearings and open door hearings and so
we were there. So I guess since the formulation of the law we were there and we brought our
inputs there and basically stressed the fact that many law that is being crafted that safety can not
be compromised for medicines. So safety is compromised, it compromises public health and we
have to be careful not to discourage companies from doing research by tampering too much with
the intellectual property and also that possibly pricing, uh, price control may not necessarily be
the answer to the health issues the country faces.

L: Yes, so regarding the final version of the Act, the Act itself, what is your stand on it?

RG: We all support the Act, the industry supports the Act. And the industry was very involved in
the formulation of the so-called IRR. Some of our points have been considered in writing it. The
central point still focuses around that. The present Act addresses only one element of health care,
that's the element of possibly, the element of cheaper medicine. But it does not address the
element of providing basic healthcare to the people because there is no safety net. The poor still
do not have access to medicine. Even if prices come down dramatically, uh, the poor can still not
afford it. First of all, the poor can not see the doctor. They can not pay the doctor's fee so they
can not get prescription drugs. In many municipalities out in the province, you find
municipalities, several municipalities, barangays, hundred thousand people there's one doctor.
There may be one nurse, three midwives. How can these people get access to medicine? So the
thing which we have been advocating and advocating very strongly now again is there has to be
a total healthcare reform, there has to be some kind of, there has to be universal health coverage,
there has to be some kind of corporate which provides a minimum of health care to every
Filipino.

L: Yes, so the Act itself is not enough?

RG: The Act itself is not enough. We doubt that it will achieve, and I think our worries is
reinforced by also, by statements and by presentations by former Health Secretary Alberto
Romualdez. He also stresses that we really must go for universal health coverage that every
Filipino can get. Because if the rich has a heart attack, he can go to the hospital, he can be taken
care of, he can get a transplant. But the poor, he can not get a heart transplant. He can't afford it.
64
There's no -- he can't afford a doctor or a hospital, forget about the medicine. That's the smallest
part of it. So there has to be, I think, we feel there has to be a completely different approach. This
is one element now which I think is behind us and is being implemented. The government has
made great strides with implementing a program which is basically a treatment pack which can
be priced a hundred pesos or below depending on what product it is, so that if you need an
antibiotic for seven days, you pay a hundred pesos for seven tablets or fourteen tablets or
whatever required. So that I think are positive moves. Competition in the market has increased
greatly. There's very fierce competition now in the so-called generic level, making medicines
available at a better price. That and all the statistics and all the information available, it looks like
the ones benefiting most from the cheap medicine bill are probably the well-to-do people and not
the poor, which actually the bill was supposed to address. So there is, of course, it will trickle
down a bit more and with the family networks you have here in the Philippines and so forth,
probably more people will get to benefit from the medicine but in will not cover the vast
majority of the people yet. So Philhealth has to be revised. Right now Philhealth only pays if
you're an in-patient. So if you are in the hospital, you get discharged after three days and you
need antibiotic treatment for ten days, it pays only three days. There's seven days you have to
pay yourself. This is, this is, really inadequate. Why shouldn't the patient be able to claim the
total treatment? Because discharging from the hospital makes it less hospital cost and so forth.
So the insurance should really pay.

L: Yes, so what are your expectations of the Act, what do you think it will actually do? And how
will it affect your organization PHAP?

RG: Well, it will widen competition to some extent. The competitive activities will probably
increase, particularly as more products come off patent in the next two years and a lot of
products will come off patent. Therefore enter the so-called generics sector. There will be fierce,
fierce competition among the importer or the local producers of the product which will bring the
average of drug prices down, no doubt. But the, particularly the industry, they will continue with
their projects on research and so forth. You may have read in the paper or on the news is, for
instance, Glaxo - GSK. They have announced a program that really will concentrate on research
for developing countries, malaria, some of the other diseases we still have here. And even new
research they will put in a pool so they can much lower prices to those countries. Not to
European countries or America but countries like Philippines so Africa and so forth. So there is,
all around the world, a move to re-address the health issue. In Europe, of course, has taken care
of health many years ago, basically socialized health so it's all paid for by the state. Of course,
it's paid by the citizens indirectly, taxes are high, social contributions are high. But when you get
sick, you don't have to worry to raise money. You can go to the doctor or the hospital and be
treated. There will be certain adjustments in the industry. Of course, right now it falls together
with the overall financial economic crisis so maybe certain happenings, some companies may
sort of shrink their operations to some extent. So it's uh, for some companies it could be a result
of, for some it can simply be part of the economic problem.

L: So as a closing question, you mentioned earlier that the Act itself will not address actually the
entire problem of healthcare availability. But what do you think, other legislation, or what other
things can be done to ensure quality and accessible medicines in the Philippines?

65
RG: Well, one aspect of the Act is that the government through PITC - the Philippine
International Trading Corporation -- and their pharma company PPI can import, basically for
government use initially, from any source which they feel is advantageous to the Filipinos,
including what is called parallel import which are patented products that are possibly sold in
lower price in other countries. Now, the worry is of, it's also a worry of the NGOs, the patient,
what was that called -- OXFAM, Patient Watch, I can't remember all the names. They are also
worried that we will have a flood of goods coming in from sources, from unknown sourcs, and
therefore the quality may be compromised. That's a big concern. The concern is also among the
local manufacturers, the organization, PCPI, the Philippine Chamber of Pharmaceutical
Industries. And also doctors. Doctors are very, very concerned that we may compromise safety
for price and as a result there is a bill in Congress which is right now in bicameral session to
strengthen BFAD so that they can attend to register all those products because those products
have to be properly registered, tested, possibly factories have to be inspected that they're really
neat, GMP -- good manufacturing practices -- in order to ensure that the medicines coming in are
safe. Again, we have seen last week, two weeks ago, there was this report -- Nigeria, they are
also importing cheap medicine from China, Pakistan, India or Bangladesh. And I think 84
children died because there was actually in the cough syrup, there was antifreeze. In Europe, in
cold climate you have to put antifreeze into your water tank in your car, otherwise the car freezes
up. So that was inside the cough syrup. I guess it was too strong and children died. So that's the
danger when you buy from open market sources. Even PITC because of contractual
arrangements between various companies in let's say Europe or America, companies and so
forth, the companies can only sell for the Indian market, for instance. Now, and the wholesalers
and so forth are by law, at least the marketing companies, by law, they can not export. Now some
wholesalers, they probably will export so what PITC has to do is they have to go to the open
market and buy the product, just like going down in Binondo, buy pharmaceuticals in Binondo,
you don't know where they from, et cetera. You are not so sure. So that is a gamble I think PITC
takes. And we have, I'm not saying since here, I have stressed this to the government personally,
I have told them they really must make sure, they must have ways to check it and that's why it's
important that those goods coming in are checked by BFAD, make sure that they are ok. That
they are really safe.

L: Okay, so you think that covers all...

RG: I hope that gives you an answer, it's really only a snapshot of the whole broad issue. But it's
discussed in various foras now. There is a move by a group of people to really push for total
healthcare reform. And hopefully with the elections in 2010, this can become one of the chief
issues to be addressed.

L: Do you think universal healthcare can be achieved here in the Philippines?

RG: Personally, I think yes. It is purely a matter of political will. Right now many countries, they
were as poor as the Philippines, or they were poor as the Philippines, but they made the decision
to introduce universal healthcare. You can take Greece, you can take Portugal, even Taiwan, that
the time they introduced isn't the first.

L: In Cuba.

66
RG: Yeah, Cuba. Cuba of course is a completely different system. They seem to have a good
health system but it has otherwise many limitations. But many of these countries have been
successful. They adjust over time because it cost too much to the states because they went really
overboard. But I think what many of us are advocating is a healthcare system which addresses
the basic needs and those people who can afford, they can take better rooms, they can pay for
more expensive medicine, et cetera. At least there is a basic safety net for the poor. Cough and
cold, fevers as they have, diarrhea problems, et cetera. They can go to the doctor and can get the
appropriate medicines. Because if you're not healthy, you are not productive. You can't work
properly. So it's, so the other thing which has to grow is of course education. Education has been
neglected in this country for many years now. And at least to have good education you need good
nutrition to be healthy, otherwise you can't study properly. So, they are all interlocked. And that
is where I think hopefully the government in the future will see. That that's where the main
investment will have to be, rather than maybe military and also unnecessary, unnecessary items
in the budget. (Loffy mumbles.) And it needs political will. Somebody, it's, uh. They always say
we don't have the money and discussing it with certain politicians, for instance, Philhealth. It has
a cap. If you are more than thirty thousand pesos, you don't have to pay anymore. So it's a fixed
amount you pay, up to thirty thousand. If you say, you probably earn three times, four times as
much, you should, you should pay more. No, no, I don't want to pay more. Unless you change
that attitude of bringing about some social consciousness into people, many often into the
governing people. You have to -- some leader has to take the decision and say we're going to do
it anyway. We have to do it. But how long it will take, that I don't know. It can take
(indistinguishable). According to the Philhealth law, when that law was enacted, if I remember
correctly, like two thousand -- is it 2012 or 2020? I have to check that. There should be total
universal coverage in the country. But their universal coverage is so limited, it's the way they
interpret it. It's only when you're hospitalized and the amount is very small. I think the maximum
amount you can get for one of the worst diseases under -- in that program is I think sixty five
thousand pesos. That's the maximum you can get. Most is -- the most common thing is about
sixteen thousand pesos and there's a few items are in the forty thousand pesos. So it's not -- it's
not that much.

L: How will a universal healthcare system affect the pharmaceutical industries? Will it affect it at
all?

RG: It will affect it, yes, in the sense that the market -- the Filipino market -- when you look at it
in units, you can value -- it's actually a very small market. For a hundred million people, you
have a market of about a hundred billion, while you'll find countries with ten million people, the
market is three times the size. Which again shows that medicine is not very widely spread,
except for universal coverage will be a volume increase in units. Not necessarily peso value,
there will also be peso value but not in the same proportion but unit increase can be very
significant. Very significant. Because right now, I don't know, only the best estimates are that
there are 30-40 percent of the people are using medicine, the rest of the people aren't using
medicine at all. At least not, shall we say, not western medicine. They use some local herbs, and
they use some of those things but that's about it. Doesn't mean some of these things don't help,
they do, but they may not be consistent, they may not help to an extent.

67
L: Okay, that's it.

RG: So I hope you can make out something out of this.

L: Yes, I will.

RG: And if you need some additional information, you can always call Marianne and we'll see
that we can get it to you.

L: Okay, thank you so much, Mr. Gloor.

RG: You're welcome, okay.

Dr. Gene Nisperos, Vice Chairperson


Health Alliance for Democracy (HEAD)
26 February 2009

Lorraine Bermejo (L): Ano po yung participation ng HEAD sa Cheaper Medicines Act?

Gene Nisperos (GN): Well, sa input, nung dinidinig pa siya sa both Houses -- ok lang ba?

L: Okay lang po.

GN: Nung nagkaka-hearing pa yung committees on the House of Representatives and Senate,
nag-participate ang HEAD by providing our inputs. One, kung anong aspect nung monopoly --
or what aspect of the health industry should actually be the focus of the Cheaper Medicines bill
so that it would be more meaningful. Kasi kung babanatan lang na -- if we're just going to hit on
the tangential or symptomatic issues, hindi talaga bababa yung presyo or bababa man short term
lang. So we made proposals including yung -- our most significant proposal was drug industry
regulation, drug price regulation, kasama na yon. Pangalawa yung developing our own national
drug industry. Bakit? Well, we saw the industry to be heavily monopolized. And there's only two
basic ways by which you can dismantle monopolies. One is to regulate and the other one is to
induce competition. In both -- hindi siya either-or. Tipong, para bang regulate ka ngayon, wala
kang competition. (Loffy: Opo, sabay.) You can do them with certain overlaps. Pero,
unfortunately, hindi yun dininig ng -- tinanggal lahat niyan sa bill. So nung napasa yung Act,
yung mga proposals namin, hindi talaga. Essentially yung bill kasi is just Mar Roxas' bill with
some palabok. Hindi niya talaga inexploit yung number nung bills that were out. Kasi sa Senate
-- sa House of Representatives alone, I think there were 29 versions. Tapos sa Senate were 6. So
ganun karami. So hindi niya kinuha talaga yung -- hindi siya inclusive eh. Kumbaga, eto yung sa
kin. Ano yung wala sa kin, nasa 'yo ba? Usually ganun gagawin mo diba? Hindi niya ginawa
'yon, kinuha lang niya yung sa kanya tapos naglagay lang siya ng konting palabok para mukhang
hindi naman monopolized.

68
L: Ah okay. So yung mismong Act na po, ano po yung stand n'yo doon?

GN: Sa Act?

L: Oo, sa Act na.

GN: Okay. The Act itself -- ang official stand ng HEAD is the Act itself just not solves the
problem of the drug industry, which is again, monopolies. Yun yung isang basic stand. The other
basic stand is, even as a stop-gap measure, it will -- it might, it might cause some changes in the
prices but it will definitely not lead to any meaningful benefit to ano. Kung magkaroon man ng
pagbaba ng presyo ng gamot, hindi 'yon dahil dun sa batas. Dahil nandiyan na yung talagang --
nag-i-import na tayo dati ng gamot eh. Tapos yung third point namin d'yan, the bill itself will
engender a more import-dependent and none-manufacturing type of drug industry. Kasi imbis na
magtayo ka ng sarili mong negosyo, ng sariling mong pabrika ng gamot, import ka na lang ng
import kasi mas madali, mas mura. Ayun, so yun basically yung stand namin. Okay lang ba?
Sabihin mo kung masyado akong mabilis magsalita, madaldal.

L: Okay lang, may recorder. Ayun, so would you say na yung sa policy, yung pag-formulate nung
Act, hindi talaga naman nadinig lahat, or nadinig pero naman tinake into consideration yung
mga...

GN: Well, you're talking beyond the issue of legislation na. Parang, ang pagkakaintindi ko kasi
sa tanong mo, kinuha ba nila lahat nung inputs to come up with the law. And yung isang aspect
ng tanong mo, pano siya nakaka-relate dun sa policy. Parang ganun ba? Well, dininig naman nila
lahat. I mean, they allowed us to talk. Whether they took it into consideration is another matter.
Kumbaga, pinakinggan ka nila pero isinantabi rin yung sinabi mo, kumbaga pinagsalita ka lang.
Isa 'yon, hindi talaga sinuri kung ano yung kelangang components nung bill to make it really
meaningful. Kasi they have an understanding of the problem and yet the solutions they proposed
do not really address the analysis. So kung titignan mo sa Congress, titignan mo sa Senate, ang
analysis nila monopoly na eh. Pero yung solution na stuck short of dismantling it totally. Yun
yung first part sa tanong mo. Sa second part, even when they were trying to formulate this, this
Cheaper Medicine law, hindi naman sila naka-anchor sa National Drug Policy because if they
were anchored on the National Drug Policy which, as a matter of trivia, ang Philippines ang
unang may national drug policy sa buong Asia. 1987, inarticulate yan National Drug Policy. So
we're one of the few countries, we were first where drug policy was articulated. And yet since '87
to now, lahat ng nilabas na batas at program, hindi dun naka-anchor, kaya siya talaga nagiging
stop-gap or nagiging lutang kasi wala siyang tumatahi na policy. So wala siyang synchronicity,
wala siyang system. Ayun.

L: Ayun, sinasabi n'yo din kanina yun pero, ano yung expectations n'yo sa Act, ano yung
magagawa niya.

GN: Well, the Act may, may cause some degree of ano, changes eh. Kasi nararamdaman ng tao
yung mga nag-i-import dumadami na yung mga generics, yung mga imported counterparts. So
magkakaroon ng, mararamdaman na yan, magkakaroon ng bago. Pangalawa, kahit sabihin pa
nating ipatupad nila yung drug price control, kasi may aspect dun na drug price control,

69
magkakaroon din ng konting control. So magkakaroon ng maliliit -- there are going to be small
changes that will be felt by the people. Whether or not that can be directly alluded to the bill, to
the law, is another matter. Kaso, it can be looked upon also that the bill will be one step forward
but two steps backward, kasi nga nag-c-create yan ng isang import-dependent eh rather than
promoting the development of your own drug industry. Oo, isa 'yon, ano. Pangalawa, it is going
to be definitely and it is already being used as a political platform by Mar Roxas, its main
proponent. Diba parang pinagmamalaki niya sa commercial niya. So malinaw na malinaw talaga
na yung batas na yan itinulak para maging tungtungan sa pangangampanya. Not the people's
welfare. Well, the people's welfare may be a second objective, but a far second objective.

L: Ano naman po, since diba sinabi n'yo yung Act hindi naman siya -- may konting mga
magagawa siya but not totally ma-achieve yung ano niya. So ano po yung mga things that can be
done to ensure, I mean, outside of the ano, outside of the Act, hindi kasama ito, but can be done
to, yun nga, yung access to quality medicine.

GN: So ano na yung mga pwede gawin. Una, implement the National Drug Policy. May kopya
ka na naman ng National Drug Policy diba, binigay ko sa 'yo yung PQRST. All of those aspects
should have a law that implements it or should have a program. Isa yan ano, implement the
National Drug Policy. Pangalawa, promote a national drug industry. Promote the development --
'yun, mas specific -- promote the development of a national drug industry. Kasi if you see India
and Pakistan kung saan tayo nag-i-import, yung gobyerno nila, nagbuhos talaga ng pera. Sige,
mag ano kayo, magpaunlad kayo. Kaya may government support talaga yung development ng
drug industry sa India and Pakistan. Pangalawa, politically the government of Pakistan, the
government of India, ang pinatent niya, ang ina-allow lang niyang patent is the method, not the
product. So paracetamol, basta makabuo ka ng paracetamol at hindi yung proseso na ginamit ko,
pwede. Dito, product. So kahit iba-iba yung ginamit n'yo basta paracetamol ang duduluhan niya,
hindi mo pwedeng gamitin, which is counterproductive. The Indian type is, yon, so developing
national drug industry. Short term, siyempre yung support nung small Filipino players.
Halimbawa, anong example nung support the small Filipino players, bigyan sila ng tax holiday,
bigyan sila ng tariffs breaks pag ini-import sila ng mga makinarya for their factories, kasi ang
laki ng binabayad nila d'yan, ano. Isa pang pwedeng gawin is regulate the industry. Isang
panawagan namin yan na kami lang ang nananawagan. Why regulate? Because unlike the bill,
the law, bago magkaroon ng competition, mag-hihintay ka pa d'yan ng two to five years kasi
yung competitors matagal pa yan, hindi naman automatic nandiyan na siya. Whereas regulation,
'pag sinabi ng gobyerno na bukas naka-regulate na lahat yan, bukas nandun na yan, immediately
palpable. In fact, regulation directly benefits the people. Whereas yung the cheaper medicine law
might not even benefit -- kasi ang ginagawa ng cheaper medicine law, it makes it easier or
cheaper for the manufacturers to come up with the product. Kung negosyante ako, lumiliit yung
kapital kong kailangan. Pero hindi automatic yun pag lumiit yung kapital ko, mas mura ko
ibebenta. Diba, hindi automatic. So with the law, dependent pa rin tayo dun sa kawanggawa nung
mga drug companies, if they're going to make it, mura ko naman nabili, mura ko din ibebenta.
Hindi. Tignan na lang natin sa oil industry. Whether or not mataas ang presyo ng oil sa labas ng
bansa o hindi, mahal nila binebenta dito. Ganun din sa ano, it doesn't necessarily mean that if you
make it cheaper and easier for businessmen, they will sell it cheaper and ano, hindi. So isa 'yon,
so kelangan talaga ng strong regulation.

70
L: Ayun, meron pa po iba. Ah hindi, balikan ko na lang yung mga una kanina po, kasi yun na
yung last. Yung mga specific provisions po dun sa law itself, ano po yung mga strongly ino-
oppose n'yo?

GN: O sige. Yung una yung -- hindi, hindi naman ino-oppose, yung critique namin din sa bill, sa
law, is essentially, patungkol lang siya sa intellectual property. The essence of the bill is
regarding intellectual property. Yung parallel importation, yung compulsary licensing, yung
evergreening -- puro yan intellectual property. Eh sino ba ang makikinabang sa usapin na
intellectual property? Yung negosyante, hindi naman taong bayan. Pangalawa, sinasabi namin na
it adds a power to the president to regulate drug prices. Sinasabi namin, you don't need a law for
that, that is inherent in the president. I can say, ganito diba, so balewala. Yung strengthening
BFAD. Wala d'on, hindi naman -- ang ginawa lang strengthening sa BFAD dun eh yung pera.
Diba? Hindi naman masaklaw na BFAD should do this, should do that. Wala diba, so yun, isa pa
yun, napaka-token. So yung batas itself does not directly translate to benefits. It's still under the
auspices of businessmen and the government para matamasa mo siya. Di katulad ng ibang batas
na pag pinatupad, automatic ma-a-ano ka. Yun lang naman yung provisions ng batas, atsaka yung
pharmacy law, yung amendment sa pharmacy law. Pero yun hindi masyado sa 'min controversial,
mas controversial yun sa pharmacists eh because they want some drugs not to be over-the-
counter. That's a bit more technical eh, on the aspect of drugs na 'yan, hindi na on the prospect of
the industry itself.

L: The industry itself. So ayun, ano pa. (laughs) (indistinguishable)

GN: Sige. So ang stand ng HEAD, yun lang naman ano, ano pa. Ayun, ang isa pa naming hindi
masyado na-t-touch sa bill at hindi masyado na-t-touch ng industry na problema din ng industry
ay yung bio-piracy at bio-patenting. Kasi napakaganda ng likas na yaman natin, ninanakaw lang,
pina-patent ng ibang bansa, diba? Tapos because of that, stunted din yung research. Wala tayong
research and development. Ayan, 'yan yung isa pa rin naming gustong tignan sa usapin ng
governance. So ang bottomline, if you're going to ever quote us, yung HEAD 'no, regarding the
drug industry, ang call namin is to dismantle the monopoly of TNCs in the Philippine drug
industry. Unless that is removed, lahat ng gagawin would eventually fall flat or will not succeed,
or magkaroon man, very, very token. Kasi yun talaga yung root ng problem. Why? (laughs)
Sorry ha. (indistinguishable)

L: Ayun, thank you. Yun lang po yung basic ano --

GN: Yun lang, okay, sige, sige, 'pag may questions ka pa, i-email mo na lang.

Josephine P. Inocencio
National President
Drugstores Association of the Philippines (DSAP)

[Ms. Inocenio declined to have the interview recorded. The following reflects the handwritten
notes from the interview.]

71
Lorraine (L): What was your organization's participation in the Cheaper Medicines Act?

Josephine Inocencio (JI): DSAP attended public hearings held in 2006 and 2007. We were
consulted regarding their comments on the bills. There were several bills but Mar Roxas' was the
"biggest" and included the liberalization of intellectual property rights. Meanwhile, Legarda and
Enrile's included the amendment of the Generics Act and the strengthening of the BFAD. The
bills were then consolidated into one bill. The Senate Bill mostly contained provisions on
intellectual property rights and the House Bill most notably on price regulation.

L: What is your organization's specific stand on the Act?


JI: We are against price regulation because, like the World Health Organization, we find it
ineffective. Price regulation must be incorporated into a health insurance system. There are
already many affordable medicines – generics – in the market and it would be an added burden to
regulate them. We could pursue regulation only for specialized medicines that are not yet out of
patent such as vaccines and ontological drugs. DSAP sees no need to regulate, just standardize
the medicines. We have no problems with the provisions on intellectual property rights.
However, we are concerned about the regulation of drug importation. Allowing so many drugs to
come into the country may put safety at risk.

DSAP has a problem with putting a label on generic drugs that says it has the same therapeutic
equivalence as its branded counterparts. Pharmacists know that it is not the truth, that different
drugs have different therapeutic equivalence. It can be said, however, that they have the "same
therapeutic results." Take mefenamic acid, for example. Although both branded and generic have
the same effect of relieving pain, the branded drug Ponstan is faster-acting than a generic
mefenamic drug. And in cases where immediate pain relief is crucial, waiting has a cost.

The Roxas bill is commendable in that it allows for the Bolar provision or the early working
provision. Even though the drugs are still not off-patent, others can already study the product so
they have a head start, so once patent expires, they can sell their own products right away.

L: What other things not included in the Act do you think can be done to ensure quality and
accessible drugs in the country?

JI: We should deal with the totality of the health care system rather than just a portion of it. There
is interest only in the curative aspect of health, and not in the preventive, and because of this we
are wasting so much time and money. And unless there is massive education about it, generic
drugs are useless. Consumers should realize that they are a part of healthcare.

Atty. Blas Viterbo, Chief-of-Staff


Office of of Mar Roxas
3 March 2009

[Atty. Viterbo declined to have the interview recorded. The following reflects the handwritten

72
notes from the interview.]

Lorraine Bermejo (L): What was your participation in the Cheaper Medicines Act?

Blas Viterbo (BV): As chief-of-staff of Senator Mar Roxas, I was in charge of the bill during the
13th Congress.

It all started with then Secretary of Health Alberto Romualdez who noticed that drug prices in the
country were so high. Mar Roxas was then the Secretary of Trade and Industry and pushed for
measures to lower drug prices. Consequently, he was sued by the Pharmaceutical and Healthcare
Association of the Philippines or PHAP, an association of the big pharmaceutical companies in
the country, in 2000. The representatives then offered a free meds bill as a buy-off, but Mar
Roxas said no.

During the 13th Congress, Senator Roxas analyzed the Intellectual Property Code of the
Philippines and saw that it was designed to benefit the transnational corporations.

The Cheaper Medicines Act was patterned after the best practices in the world. It also upholds
the Constitution in that it gives priority to the poor and elderly when it comes to health.

Lawyers from PHAP wanted a law that was even stricter than TRIPS and which would highly
favor transnational corporations.

L: How and to what extent does participation by interest groups influence our process of
legislation?

BV: PHAP used different tactics to influence the legislative process. He said that people should
be made aware of PHAP and other groups' self-interested motives and be vigilant against it. In
fact, when Mar Roxas was still Trade Secretary, he had shouting matches with the US
government representative.

In committee meetings and bicameral hearings, different groups were invited to give their
positions. Among them were Oxfam and 3CPNet, who followed the proceedings zealously. Other
groups like HEAD, which pushed for the implementation of a national drug policy, was very
leftist.

L: How did you weigh the different inputs and suggestions of the different interest groups during
the consultations on the bills? How did you determine what to ultimately include in the bill?

BV: In making any kind of policy, one asks himself, what is more valuable: the interest of
businesses or the interest of people? This is what will ultimately guide him in crafting the law.

73
L: What are your expectations of the Act? What effect will it have on the different stakeholders?

BV: There would be more competition, more government regulation and more government
spending. The entry of generic medicines would have the short term effect of a drop in prices,
and indeed, Glaxo Smith Kline had already dropped their prices by 40 percent.

Political will is needed in order for the Act to be a success. This could be the case if Mar Roxas
were to sit as president. As already evident in his clashes with PHAP and transnational
corporations and the black propaganda being put out against him by these powerful groups, Mar
Roxas is not one to compromise his ideals.

L: What other things can be done to ensure quality and affordable medicines in the Philippines?

BV: There should be universal healthcar. Every Filipino must have Philhealth insurance. A
competent leadership is also crucial, as is a well-disciplined government.

74
Appendix C

LETTERS OF REQUEST FOR INTERVIEW


AND
INFORMED CONSENT FOR RESEARCH PARTICIPANTS

75
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