15 November 2012

Medicines Still Beyond Reach of Many

Affordable Drugs
By Oscar F. Picazo

Drugs in the Philippines are more expensive than those in other parts of Asia and in countries of similar economic status.

Brand names in the Philippines have been found to be 5 to 30 times more expensive than similar brand names of similar manufacturers in India and Pakistan. This is the strongest factor that impelled the government to institute a parallel drug importation policy under the Cheaper Medicines Program. (Tables 1 and 2)

The trend is not improving. In fact, it is worsening, at least until after the imposition of the Government Mediated Access Price in 2010.

As Table 3 shows, the ratio of local median prices to international reference prices, especially for innovator (or originator) brands, in both public and private sectors, rose in most of the past decade. Indeed, the ratios of Philippine price to India price for all the four branded drugs considered in Figure 1 rose from 2004 to 2010.

Gains have been achieved in the production and consumption of generic drugs, following the enactment of the Generics Act in 1988.

In the first-ever Generics Summit held in September 2008, as many as 28 generic-drug companies were given quality seals for good manufacturing practices. The number of good manufacturing practice (GMP) compliant firms has since increased to 53, though a larger number of firms continues to operate without having yet complied with GMP standards.

Nonetheless, the larger firms manufacturing prescription drugs now meet GMP standards.

Today, it is claimed that 5 to 6 out of 10 Filipinos now purchase generic drugs. As Table 4 shows, an increasing proportion of Filipinos are buying cheaper generic drugs and the proportion of households that did not buy medicines (for any reason) has declined significantly.

The Department of Health (DOH) has mandated all government health workers to use only generic terminologies in drug purchasing, prescribing, dispensing and reimbursement. Reports indicate that generic manufacturers now sell at prices 55 to 80 percent lower than their branded counterparts.

However, even the cheapest generics in the Philippines still sell at a high multiple of international reference prices. The case is even worse for originator drugs. Thus, affordability of drugs remains a serious problem.

A World Health Organization (WHO) survey of patients in health facilities in 2009 defined affordability as the number of days' wages that the lowest-paid government employee needs to purchase standard treatments for selected conditions.

The results, shown in Table 5, indicate that drugs remain prohibitive for the lowest-earning households. This means that drugs are even more prohibitive for the unemployed and indigent.

In a separate WHO household survey in 2009, it was found that the average cost of a prescription for acute illness was PhP 485 and the monthly cost of medicines for chronic diseases was PhP 946.

Health insurance penetration among the surveyed households was very low and even among those with health insurance, medicines for outpatient care were not usually covered.

To economize on going to the doctor, Filipinos commonly resort to self-treatment or self-prescription.

In the WHO household survey, over half of the medications taken in acute illness were self-prescribed or prescribed by a nonhealth professional. Of course, this practice of self-treatment creates its own problems, including possible improper medication and drug resistance in the case of use of antibiotics.

The household affordability of medicines is particularly acute for sufferers of chronic and debilitating illnesses requiring maintenance drugs. A study on diabetes care in the country shows that there are very few sustainable measures for the maintenance of regular medications of diabetics because of personal cost constraints, which result in irregular treatment that lead to more expensive complications and hospital admissions later.

Households spend a significant percentage of medical care on drugs and poorer households tend to spend a larger share of their medical care costs on drugs than richer households do.

During the year, the poorest households spend on average more than half (59 percent) of their medical care costs on drugs. For the richest households, this proportion is 41 percent. Thus, relative to their income and medical care costs, the poor bear a heavier load on drug costs than do richer households.

(Oscar F. Picazo, a former senior economist of the World Bank Pretoria office, is a consultant to the Philippine Institute for Development Studies. This article was excerpted from the PIDS discussion paper "Review of the Cheaper Medicines Program of the Philippines," which was released last June.)

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