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After years of waiting for the passage of the much-contended legislation, the debacle over the Cheaper Medicines Bill hounds the public even after its celebrated passage in June of 2008.

More than a roller coaster ride

To say that the campaign to pass the Cheaper Medicines Bill was difficult is a complete understatement.

The legislation with its noble purpose to ensure affordable medicines to Filipinos had gone through various controversies before it gained the passage it rightfully deserved.

In the 13th Congress, the Cheaper Medicines Bill as it was popularly known, initially sought to amend the Philippine patent law to make room for flexibilities provided under the World Trade Organization’s Trade Related Aspects of Intellectual Property Rights (WTO-TRIPS).

Flexibilities under the IP amendments include parallel importation of drugs with patent protection without the consent of the patent holder. It also provides flexibilities for the issuance of license to the government or any third party, which can manufacture patented medicines in the event of a national emergency, disaster or any similar emergencies, further limiting the criteria for granting patents to drugs and medicines. This then allows the early working of a generic drug application even before the patent protection of its originator drug expires.

The Cheaper Medicines Bill then was not a popular legislation even among legislators in both the Senate and House of Representatives because of the technical issues surrounding intellectual property rights. It remained unpopular until a major turning point presented itself in the form of a note.

In February 21, 2007, days before the Congress closed its session for a much-awaited recess, lawyers from a prominent law firm trooped to the session hall of the House of Representatives to monitor and lobby against the bill’s passage. A few minutes later, Congressman Ferjernel Biron went ballistic and confronted the lawyers; apparently, one of the lawyers has passed a note to Congressman Teddy Boy Locsin bearing the message, “We desperately need someone to question the quorum now. Can you do it?”. The note also requested Congressman Locsin to call Mr. Leo Wassmer, vice-president and Chief Executive Officer of the Pharmaceutical Healthcare Association of the Philippines (PHAP). Chaos soon followed the commotion as Congressman Locsin threw the lawyers out of the session hall with the media at their tracks.

After a series of statements identifying the lawyers as representatives of the Pharmaceutical Healthcare Association of the Philippines (PHAP) and later the denouncement of the lobbying act by the civil society as a desperate attempt to control the inevitable end in the patent regime of the pharmaceutical industry, the Cheaper Medicines Bill became a symbolic legislation. The Bill became an essential weapon in the waging war between patients’ rights and patent rights.

Soon after the incident, it gradually became evident that the bill will not pass in time for the closing of the 13th Congress. Nevertheless, what the public lost during the end of thirteenth congress, it gained in the opening of the next congress. The bill gained enough publicity to solicit support from legislators in both chambers. Before the committee hearings were even conducted, majority of the house representatives have signed the pending legislation as authors and co-authors.

Complications ensued after various legislators filed their own version of the Cheaper Medicines bill. After several public hearings and consultations, salient points of the bill included more than just the Intellectual Property Code amendments. The bill contained amendments to the Generics Act and pharmacy law. The establishment of a drug price regulation was also included along with a provision to strengthen the Bureau of Food and Drugs (BFAD).

Seemingly repeating history, the House version of the bill again faced contention with some of its provision ruffling feathers within and beyond the halls of the lower house. The Drug Price Regulation vs. Intellectual Property Code amendments debate was consistently drowning all other issues on the Cheaper Medicines bill in the first stages of the hearings by the House Committee on Trade and Industry. Legislators sponsoring the provision were vicious in their critique of the IP amendments with allegations centering on the premise that the IP amendments will not really translate into affordable medicines.

The Philippine Medical Association (PMA) meanwhile, were passionate about a certain provision on the amendments to the Generics Act. The amended provision mandates for prescribing in drugs in its generic name only, no brand name shall appear in any part of the prescription pad. This provision seeks to promote the use of generic drugs at the same time prevent multinational pharmaceutical companies from using the prescription pads as a marketing tool for their branded drugs. The PMA went as far as threatening to conduct a nationwide Hospital Holiday, a boycott in which hospitals will refuse to accept patients once every week except for emergency cases. PMA conducted a nationwide motorcade to signify the doctors’ opposition against the “Generics-only” Prescription. PMA’s steadfast supporter was Senator Pia Cayetano, which during the bicameral deliberations was adamant about including the provision and moved to scrap the Generics only prescription from the final Bicameral version of the bill.

The Department of Health after a much-publicized show of support for the generics only prescription retracted their recommendation with statements saying that 54% of Filipinos are already purchasing Generic medicines. Thus, the need to amend this specific provision no longer merits the urgency that it has been provided before.

In the midst of allegations against the generic name only prescription and even generic drug itself, the public health advocates remain steadfast in their stance, challenging the PMA to renounce their profit-oriented view of prescribing in the drug’s brand name so that they can put the patients’ best interest in mind.

The Office of the President saw the debate over whether to drop the generic name only prescription or not as the sole hindrance to the passage of such a noble legislation. Thus, in May of 2008, President Gloria Macapagal Arroyo publicly appealed to the Bicameral Committee members to drop the said provision to be able to pass a more important piece of legislation.

With that statement, the provision was indeed scrapped. Several advocate legislators have committed to soon raise the generics name only prescription in an omnibus bill amending the Generics Act.

After the controversies hounding the public health legislation, President Gloria Macapagal Arroyo finally signed the Cheaper Medicines Law, last June 6 of this year which in its final form is officially referred to as the Universally Accessible Cheaper and Quality Medicines Act of 2008.

Salient points of the law

The Cheaper Medicines Law contains various mechanisms that seek to make medicines affordable and accessible to the public. The Amendments to the Intellectual Property Code of the Philippines, Generics Act, Pharmacy law, and provisions on Drug Price Regulation, Non-Discriminatory Clause, Strengthening of the Bureau of Food and Drugs, composes the newly enacted legislation.

Intellectual Property Rights vs. Public Health

Multinational companies have exerted extreme pressures to the WTO to be able to protect their Intellectual Property Rights. Since the DOHA declaration on TRIPS and Public Health came into force, only a number of countries have adopted the flexibilities provided under TRIPS.

Chapter 2 of the Cheaper Medicines Law contains amendments to the Philippine patent law to incorporate the said flexibilities in the Intellectual Property Code of the Philippines.

The law provides for stricter patentability criteria for drugs and medicines in the market. Sec. 5 emphasizes that the mere discovery of a new form or property of a drug will not be considered patentable unless it has been proven to enhance the efficacy of the said drug. This section seeks to prevent multinational companies from abusing the patent law in a patenting strategy called Evergreening. In the application of the Evergreening strategy, Multinational Pharmaceutical companies introduce new additions to existing substances of drugs and medicines to gain extension of the patent protection of a certain drug.

Parallel Importation allows the importation for resale of patented medicines introduced anywhere in the world. Sec. 72.1 states that the right to parallel import drugs and medicines is provided to any available government agency or any private third party.

Sec. 72.4 meanwhile pertains to the right to avail of the early working provision stated in the law. The provision seeks to provide for early processing of generic medicines application to prepare for the originator’s patent expiration. This will increase the access to generic medicines of the public immediately after the patent of a drug or medicine expires.

Sec. 74 and Sec. 93 discuss the Government Use provision and Grounds for Compulsory Licensing. Both sections identify concrete cases in which the government (Sec. 74) or any third party licensed by the IPO (Sec. 93) can use the invention without the consent of the patent holder. The patent of an invention may be exploited in cases of national emergency and other instances of extreme urgency, there is public-non commercial use without satisfactory reason, and when a judicial or administrative body has determined that the use of the product is anti-competitive. When a demand for a patented product in the country is not being met to an adequate extent and on reasonable terms based on findings of the Department of Health Secretary, the said product may be subject to government use or compulsory license among others.

Civil Action for Infringement under Sec. 76 of the Intellectual Property Code may not apply in instances covered by provisions pertaining to the Limitations of patent rights, Government Use, Compulsory Licensing, and the Procedures on Issuance of a Special Compulsory License under the TRIPS Agreement.

The law remains explicit in the protection against possible infringement of trademarks and trade names of imported or sold drugs and medicines under the Section 72.1 of the law.

The chapter further discusses the period of filing and requirement to obtain a License on for filing of compulsory licenses, and Rights conferred by the patent holder on registered marks.

What’s in a name?

The Generics act amendments became a much contended provision for the section mandating every health professional to prescribe in only the generic name of the drug, completely scrapping the brand names from the prescription pads. The generics-only prescription (formerly under Sec. 6. b) seeks to increase the use as well as promote the affordable generic drugs in the market.

The much-contented provision - the generics name only prescription was dropped in the last stages for the legislative process. The generics act amendments retained the original provision of Section 6.(b) stating the responsibility of all health practitioners to write prescriptions using the generics name with the brand name included if so desired.

To promote the use of generic drugs, Section 5 was amended to strengthen the provision that requires the DOH to publish annually the generic names and its corresponding brand names of all drugs and medicines in the county in acceptable means of public dissemination.

Every generic drug will now bear the message, “This product has the same therapeutic efficacy as any other generic product of the same name. Signed: BFAD” in its labels and packaging.

Under the Cheaper Medicines law, every local manufacturing company operating in the Philippines shall now be mandated to produce, distribute and made widely available to the public an unbranded generic equivalent of their branded drug.

Individuals violating provisions in the Generics Act will now be faced with harsher penalties. Violating parties of Sec. 6 (a) and (b) will have increased penalty fines. Second conviction will incur a penalty of not less than ten thousand persos (Php 10,000.00) and not exceeding twenty five thousand pesos (Php 25,000.00). Third offense penalizes violators of a fine not less than twenty five thousand pesos (Php 25,000.00) but not exceeding fifty thousand pesos (Php 50,000.00) and suspension of his license for 60 days at the discretion of the court. The fourth conviction entails a more grave penalty of fine not less that one hundred pesos (Php 100,000.00) and suspension of his license to practice his profession for one year or longer.

Meanwhile, a penalty of a fine not less than one hundred thousand pesos (Php 100,000.00) and suspension or revocation of license to operate of drug establishments or outlets awaits any juridical person that may violate provisions under Sec. 6 (c), 6 (d), 7 or 8. Officers directly responsible for the violation will be fined with at least forty thousand pesos (Php 40, 000.00) and suspension or revocation of license to practice profession.

The Secretary of Health may also impose administrative sanctions such as suspension or cancellation of license to operate and may even recommend suspension of license to practice profession to the erring parties.

In search for accountability

The Drug price regulation mechanism ranks among the provisions that were gruesomely tackled by legislators in both chambers. The concept of a drug regulatory mechanism took several forms. The former house version of the Cheaper Medicines law was initially a regulatory board composed of representatives from government agencies and civil society. Drug Price Regulation in the senate bill meanwhile grants the authority to regulate drug prices issued by the president only upon the recommendation of an advisory council.

The deliberations gave rise to arguments on who shall be held accountable for regulating drug prices. Senator Mar Roxas defended his position stating that a provision as controversial as the drug price regulation must have a face, an individual to be held accountable for. Accountability in this mechanism will not be efficiently projected if the provision would establish a drug price regulatory board.

Discussions on which form of drug price regulation should be legislated dragged for months. The issue was finally resolved during the Bicameral proceedings. With the senate version being adopted and the house version’s powers and structure included in the law.

Under the Drug Price Regulation, the President of the Philippines may now issue maximum retail prices for drugs and medicines based on recommendations by DOH.

Drugs and medicines that are subject for drug price regulation includes those indicated for treatment of chronic illnesses and life threatening conditions, drugs and medicines indicated for pregnancy and prevention of diseases, anesthetic agents, and intravenous fluids. Drugs and medicines listed in the Philippine National Drug Formulary Essential Drug List and other medicines that the DOH deems necessary to subject to price regulation.

Sec. 24 of RA 9502 protects the public from price manipulation of drugs and medicines. Under this section, price manipulation such as hoarding, profiteering or illegal combination, or forming cartel is considered illegal. The subsequent section discusses penalties for violating parties. A penalty of imprisonment for a period of not less than five (5) years nor more than fifteen (15) years or payment or fines not less than one hundred thousand pesos (Php 100,000.00) nor more than ten million pesos (Php 10,000,000.00). Suspension or revocation of license to operate for both professional and business license will also be ordered depending on the court’s discretion.

Drugs and medicines subject to drug price regulation is also mandated to display the retail and maximum price in the labels of the product with the phrase, “Retail price not to exceed” and “Under drug price regulation” on a red strip. Every manufacturer, importer or trader shall issue a price list with the corresponding retail prices, maximum retail prices and other information to wholesalers, distributors and retailers and to the Secretary of the Department of Health as well.

Monitoring and reporting function was similarly given priority on this Chapter. Sec. 27 refers to the responsibility of the local government units and the Department of Trade and Industry to submit quarterly price monitoring reports to the DOH. Sec. 28 discusses the need to conduct independent periodic surveys as well as studies of the selling prices of all drugs and medicines, emphasizing the role of DTI to provide independent reports to the DOH.

The Department of Health in turn shall be submitting their bi-annual monitoring report of its performance in implementing the provisions in the act. The reports shall be submitted to the President and similarly published in a newspaper of general circulation. A report should also be submitted to both the House of Representatives and the Senate within the opening of the regular session.

The issuance of a drug price regulation order with the corresponding conditions for implementation by the President should be published in at least two (2) newspapers of general circulation Drug outlets must also post a clear copy of the order of the President.

Reclaiming the public’s trust

The debate over the generics vs. branded drugs usage has shifted to BFAD’s apparent lack of capacity to fulfill it mandate to ensure safe and good quality of food, drugs and cosmetics to protect the interest of the people.

As the attacks unleashed against the generics drugs on quality issues continued, so have the issues against BFAD. The raging onslaught centered mainly on BFAD’s previous lapses of monitoring and regulation of drugs in the market. Their capacity was again brought in question when provisions that would require efficient and adequate expertise from a drug regulatory authority were proposed. This provision includes the generics name only prescription, the influx of parallel imported drugs and others.

In the attempt to provide BFAD with such efficiency and expertise, a provision was provided under Republic Act 9502. Section 31 seeks to strengthen the BFAD by allowing retaining the fees, fines, royalties and other charges incurred from its services. Such retained will be used in its operations such as upgrading of facilities, equipment outlay, human resource development, and expansion among others.

In five years, BFAD is mandated to determine if the fees and charges are indeed sufficient to meet the needs of the bureau. Should the retained fees do meet the budgetary requirements of BFAD, the agency will continue to retain its generated funds but will cease to receive any funding from the annual budget of the national government. Should the retained fees be insufficient for the operations of BFAD, they will still continue to retain the fees awhile receiving the annual budget allocation from the national government until such time when the BFAD director and the DOH Secretary certifies that the accumulated retained fund is enough for the agency’s financial needs. A yearly performance report will also be submitted to the Quality Affordable Medicines Oversight Committee.

To increase the quality assurance of drugs and medicines, BFAD will now undertake steps to ensure that drugs sold in the nation will have conformed to international standards for the content, purity, and quality of pharmaceutical products.

Over the Counter Drugs in Convenience Stores

Amendments to the Pharmacy law will now allow Over-the-Counter Drugs to be sold in supermarkets, convenience stores, and other retail establishments. Pharmaceutical companies, importers, distributors, wholesalers will only sell drugs and medicines to retail drug outlets, hospital pharmacies, and other drug wholesalers if they are under the supervision of a registered pharmacist. While for supermarkets and other retail establishments, they must first be duly licensed by BFAD.

Discrimination among drugs and medicines

The law also prevents discrimination among drugs and medicines. Under the non-discriminatory clause, it will be illegal for any drug retail outlet to refuse to carry, either by sale or by consignment any parallel imported drugs and medicines. These products will be displayed with equal prominence in the retail outlet’s shelves.

Chapter 5 also prohibits entities in the drug supply chain (Manufacturers, Importers, Traders, Distributors, and wholesalers) to refuse to sell to any wholesalers and retailers without sufficient and justifiable reason.

Corresponding penalties will be imposed for violations of this chapter, from fines of not less than Php 100, 000.00 to Php 500, 000.00. For succeeding offenses, fines will not be less than Php 500,000.00 to Php 1, 000, 000.00 and a possible suspension or revocation of its license to operate, business or professional licenses.

Ensuring the law’s effective implementation

A Congressional Oversight Committee with the title “Quality Affordable Medicines Oversight Committee will be established and will compose five members from the Senate, five members from the House of Representatives and will be jointly chaired by the Senate and House Committee on Trade and Industry. Vice Chair post meanwhile, will be held by the Chairpersons of the Senate and House Committee on Health

Moving beyond the Cheaper Medicines bill

Affordability and Accessibility issues are what the Cheaper Medicines Law sought to address. However, the problems on broader Access to Medicines of Filipinos are beyond what the law provides. Other mechanisms provided under the World Health Organization’s recommendations for increased access to medicines should similarly be in place. The WHO Access to Medicines framework recommends four strategies of improving access. Rational Use, is the selection of medicines suitable to the country’s health needs; Affordable pricing seeks to lower drug prices through an efficient generics policy and cost-containment measures; Sustainable Financing includes ensuring that essential medicines are under social health insurance, while a Reliable Supply and Management system includes a coordinated medicines management system, and the application of transparent and good procurement process for the procurement of medicines among others.

With the lobbying work finally concluded, the real test of achieving access to affordable medicines begins with the law’s implementation. Public health advocates have traversed this path even before a legislation addressing the high prices of medicines was even foreseen. Many have seen beautifully crafted legislations eventually becoming a loss for the state’s lack of political will for its implementation.

The Department of Health and the Intellectual Property Office, the two implementing agencies of the law, have initially called for submissions of the positions of stakeholders in the drafting of the implementing rules and regulations. It is in this crucial stage that public, especially that of the civil society, should maintain a watchful eye towards the crafting of the law’s implementing rules.

The true test of an effective legislation is in its crafting, implementation, political will of the state, vigilant monitoring of the civil society among others. It is with public’s greatest hopes that the bill will not suffer the same fate as those legislations that came before the Cheaper Medicines Law – an unrecognized piece of legislation gathering dust in the archives of the Philippine Congress.