Why the RP pharma industry is not competitive

By Kenneth Hartigan-Go, MD

WHILE Filipinos complain that the cost of medicines is prohibitive, they need to understand some of the problems associated with the local pharmaceutical industry. We hope that an enlightened public can participate in meaningful discussions and debates and offer solutions.

The Philippine Pharmaceutical Industry in general, lags behind its global and even Asian counterparts. It has been continuously confronted and impaired by various challenges for so many decades.

A number of issues have been raised and addressed both locally and internationally.

Comparative studies and criticisms were brought into the limelight leading to some attempts at reform. Nonetheless the Philippine pharmaceutical industry as a whole remains incompetent as indicated by inaccessible and poor-quality drugs, aggravated by the threat of inappropriate use, the insufficient quantity and quality pharmacists, poor research and technological development. We are not exactly self-sufficient and hence pose a problem in drug security.

Despite regulatory efforts from both the government and some of the private sector, the pharmaceutical market remains inflicted by perception of substandard, counterfeit drugs that threaten the life of the patients. This observation also contributes significantly to pharmaceutical market failure. While substandard drugs may be cheaper, there is a perceived quality problem and thus there is lowered patronage for their use, affecting even true quality generics products.

Aside from the regulatory mechanisms, accepted standards in manufacturing, such as the Good Manufacturing Practice (GMP), are still just an ideal concept. There are fewer than 10 drug companies complying fully with GMP. The implementation of full compliance to GMP has been repeatedly postponed. The prevailing argument of domestic drug companies is that they cannot afford to invest in compliance to GMP.

Compliance to regulatory bodies and accepted standards remain widely unimplemented. The inability of the bureau and low compliance in accepted standards undermines the quality, safety and efficacy of the pharmaceutical product.

The Philippine Pharmaceutical industry, in general, falls short of generating research to extract and produce raw materials and chemicals from local sources. Some reports assert that there is research that is happening. However the problem is that it remains at the academic level and is not translated to commercial development. The research fails to reach industry and thus is not utilized into marketable innovative products or processes.

Local industry hardly innovates, in terms of basic research to provide inputs for further local development.

The industry’s manufacturing capacity is primarily limited to compounding, formulating, and packaging. It remains highly reliant on imported raw materials and chemicals. The production process in the local pharmaceutical industry basically involves the conversion of the imported basic raw materials into pharmaceutical preparations or finished pharmaceutical products, except for a few companies engaged in the manufacture of active substances.

As shown by the World Health Organization Study in 2005, about 95% of the materials compounded in the country are imported and that the industry is dependent on products discovered and developed in another country. Industry reasons out that this is either due to the absence of these raw materials or that producing innovative products or processes entails high cost that the industry can not sustain. As it is cheaper to import finished medicine products or readily available raw materials than come up with innovative one, reason coerces industry to take advantage on it.

From a philosophical perspective, our country has to decide and resolve how to treat medicinal products and the health professionals who are proxy to access to health care.

Are medicinal products a regulated public good to serve the needs of a growing but poor population or are they treated as like ordinary commodities of trade subject to the market forces? Are health professionals who exercise great power over access to health care services and products to be treated like an economic commodity likewise subject to the laws of market forces or are they regulated professions intended to serve the public good?

Kenneth Hartigan-Go is a former BFAD Deputy Director and is currently Executive Director of a foundation. He is an appointed expert member of the Congressional Commission on Science, Technology and Engineering (COMSTE) Health Panel.

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