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Pharma firms might slash labor force due to drug price cap


The Pharmaceutical and Healthcare Association of the Philippines (PHAP) on Tuesday warned that pharmaceutical companies would reduce its labor force resulting from potential loss of profitability due to the recently imposed maximum retail price on certain medicines.

“PHAP has been consistent in its opposition to price control since global experience had shown that artificial measures result in market inefficiencies and lack of supply,” the pharmaceutical firms’ group said.

“If reasonable profits are not realized, pharmaceutical companies would review the sustainability of its operations in the Philippines, including the possible downsizing in the number of employees,” it said.

On Monday, President Rodrigo Duterte signed Executive Order 104 setting a maximum retail price on at least 133 types of medicines. The order is aimed at “improving the Filipinos’ access to affordable medicines.” 

The Department of Health (DOH) earlier said its price regulation proposal covered medicines for hypertension, diabetes, cardiovascular disease, chronic lung diseases, neonatal diseases and major cancers, high cost treatments for chronic renal disease, psoriasis, and rheumatoid arthritis.

Nevertheless, the PHAP said it will comply with the EO on maximum retail price on medicines “but calls on the government to closely monitor its impact on the pharmaceutical industry and the general public.”

The group said it is yet to receive an official copy of the EO “to fully understand its impact on PHAP Members and the public.”

However, it said that based on DOH’s earlier proposal drug prices would be capped at the manufacturers’ level but increase the margins of retailers.

This would actually result in higher prices, a contradiction between the objective and the implementation, according to PHAP.

“The Philippines would also  lose its attractiveness to investments... [and] the billions of taxes they pay would also be lost,” it said.

PHAP also stressed that innovative drugs, or new medicines and vaccines produced from years of expensive research to address current or emerging health threats, would likely not be introduced in the Philippines.

Instead of price control, PHAP said it earlier proposed a straight price reduction of 150 medicines and also offered a system where medicines will not be left expired and wasted in DOH warehouses.

“PHAP shares the objective of lowering medicine prices but appeals to the Government to consider bulk procurement and price negotiation as the more sustainable and beneficial approach,” it said. — MDM, GMA News

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