Planned price controls on life-saving medicines seen hurting foreign drugmakers
MANILA, Philippines — President Rodrigo Duterte’s plan to sign an executive order that would lower the prices of more than a hundred life-saving medicines could threaten the operations of multinational drugmakers in the Philippines, analysts at Fitch Solutions said Thursday.
The Department of Health has been pushing for an EO that would cut the prices of 122 drugs by half, noting that Filipinos are spending more on medicines compared to their neighbors in the region.
Drugs that may be covered by the price regulation include those that treat cancer, diabetes, hypertension, cardiovascular disease, neonatal diseases and chronic lung diseases.
In a research note, the Fitch unit said the introduction of maximum retail price scheme targeting expensive patented medicines sold by multinationals “will exacerbate a tough environment.”
It also echoed the warning of some healthcare groups that Duterte’s move could negatively impact small retailers and force manufacturers to reconsider plans to launch new medicine in the country.
“It could also lead to pharmaceutical companies withdrawing existing products, which would harm the public,” Fitch Solutions said.
The proposed list of medicines to be covered by the price caps was recommended by the Drug Price Advisory Council.
In the same report, Fitch Solutions said the price controls could be positive for the market over the longer term, with higher volume sales and greater competition.
It added that an increasing focus on cost-effective expenditure “will further promote the generic substitution rhetoric.”
“If patients and other payers are attracted to the new lower-priced pharmaceuticals, greater demand should attract more suppliers to the Philippine market, which is often overlooked by firms seeking opportunities in Asia Pacific,” Fitch Solutions said. — Ian Nicolas Cigaral
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