Philippines imposes price caps on drugs
The Philippines will impose price caps on more than two dozen drug products after an offer by manufacturers to cut prices voluntarily fell short of government expectations.
Gloria Macapagal Arroyo, the country’s president, has imposed maximum retail prices on medicines made from five compounds starting in mid-August, according to Robert So, the department of health’s manager for the drugs programme.
The move, which affects products developed mostly by Pfizer of the US, the world’s biggest pharmaceutical company, comes as Mrs Arroyo travels to Washington for a meeting with Barack Obama, US president, this week.
The American Chamber of Commerce of the Philippines said price controls might satisfy popular demand for cheaper drugs in the short run but could hurt the country’s long-term competitive standing and foreign investments.
“The Philippines is already near the bottom of the global competitive rankings. The government should do something to get the country out of the bottom,” said Robert Sears, the chamber’s executive director.
This will be the first time since the 1970s, when the Philippines was under martial law, that the government has fixed medicine prices. The move underscores how the popular and political mood in the country has shifted against the free-market policies that many blame for the high price of medicines.
Health officials say the Philippines has the second-highest drug prices in Asia.
The Philippine health authorities’ initial proposal was to put price caps on more than 80 products. Fearing a backlash from the international business community, the president tried to avoid imposing price controls by asking pharmaceutical companies to cut retail prices voluntarily.
The government accepted the bulk of the voluntary price cuts but rejected them for 27 preparations made from five compounds, which would be subject instead to price caps, said Dr So.
Planned mandatory price cuts will cover the antihypertensive amlodipine, the antibiotic azithromycin, cholesterol-lowering atorvastatin and two cancer treatments – doxorubicin and cytarabine.
In a statement, Pfizer said it had made “the largest offering of voluntary reductions by any one company” and was “disappointed to learn that the government did not accept its offer and chose instead to impose the Maximum Retail Price (MRP) on Pfizer’s products”. However, the company promised to co-operate with the government.
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