By Kenneth Hartigan-Go
MUCH of the clamor now in the pharmaceutical sector, both globally and locally, calls for transparency in pricing to lower the cost of medicine. International and local organizations and alliances have been formed to clamor for it. Prices are monitored and compared within and between regions throughout the world. Various mechanisms have been placed to demand transparency in pricing worldwide. However, prices remain high and thus the clamor remains.
An important factor to consider why prices remain high is the inability of the government to systematize a transparent pricing mechanism. It is as if the imperfection of the market, its profit-maximizing nature, is irreversible and thus has to be accepted as innate. This should not be the case. There can be a better equitable way out of this. The government must put up a transparent mechanism in medicine pricing to influence the market to respond to the public’s call and moderate their profit-orientation. Though this first action will address the imperfection of the system, it is not enough. The second half of action involves addressing the market failure by developing a proper and responsive competitive pharmaceutical sector capable of undertaking science and technology activities.
The Philippine Government has tried to respond to the call for transparency. The Department of Health and PhilHealth have come up with Drug Price Reference Index (DPRI). It works basically under the principle of informing the public of the prices of medicines, as being sold in the market, thus giving them the choice. However, though the intention is good, it does not really address the problem of high medicine prices. The DPRI is not enough. It accepts that the market may impose high prices as long as there is a cheaper counterpart. And that regulation will be left with the market forces. Further, the assumption of the PhilHealth that the public is objective enough to choose a cheaper counterpart may not be completely true, as they may be shaped by the misleading advertisements. DPRI is only a short-term solution. Drug pricing in the Philippines remain non-transparent and drug prices remain high and access by the public is adversely denied.
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