PHAP warns government of P28 billion revenue loss from price cap

(The Philippine Star) - May 26, 2020 - 12:00am

MANILA, Philippines — The government stands to lose P28 billion in revenues as a result of price controls on medicine earlier recommended by the Department of Health (DOH).

EO 104 will take effect in June and will slash the prices of medicines from the manufacturers’ level, but not all prices will be reduced at the patient level.

The industry projects its sales to drop by P57 billion from P200 billion once the full price control plan of the DOH is fully implemented.

Projected government revenue losses are broken down into: P4 billion in foregone customs duties; P7 billion in lost VAT; and P17 billion in corporate taxes.

“The EO does not benefit the public in the end because of the formula used to compute the price adjustments. We appeal that the measure be withdrawn until further studies especially at this time when the government needs funds to fight the coronavirus disease 2019 or Covid-19,” said the Pharmaceutical and Healthcare Association of the Philippines (PHAP).

It added: “Price control has not been effective based on global experience. It is a populist proposition that discourages production, creating scarcity that will likely hurt those in need of the medicines the most, and shrinks an industry. We continue to appeal for a thorough review on the impact of this policy.”

Instead, PHAP said the government should continue the practice of buying in bulk and price negotiation to assure both supply and price stability.

The PHAP represents the research-based pharmaceutical and healthcare sector in the country. Its member companies are the trusted providers of quality and life-saving medicines in the Philippines today. A non- profit and non-stock organization, PHAP is composed of Filipino and global companies.

  • Latest
  • Trending
Are you sure you want to log out?
Login is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

or sign in with