Regulatory reforms were implemented in the pharmaceutical sector in the late 1980s.

An essential drugs
list was established, a Generics Act promoted and required greater use of generic medicines 55-60% of
the public now buy generics and capacities for standards development, xxiilicensing, regulation and
enforcement were strengthened at the Federal Drug Authority. In 2009, the DOH set maximum retail
prices for selected drugs and medicines for leading causes of morbidity and mortality.
The Food and Drug Administration (FDA) regulates pharmaceuticals along with food, vaccines, cosmetics
and health devices and equipment.he Philippine National Drug Formulary (PNDF) is a regulatory tool of
the DOH. This formulary is a list of essential medicines reviewed andrecommended by the National
Formulary Committee, which serves as a basis for all government drug procurement and for PhilHealth
Until recently, drug prices were largely unregulated and were determined by market forces. In August
2009, however, after much public debate, maximum retail drug prices (MRDPs) were imposed by the
DOH on selected drugs, resulting in a 50% reduction in current prices.
Pharmaceuticals reach consumers via a supply-driven distribution scheme. Among the wholesalers and
retailers, the drugstores have the greatest percentage share in the market at 80.1%
Access to essential drugs is constrained by limited availability, irrational use and high costs (DOH, 2008).
Availability of medicines is dependent on the presence of doctors to prescribe drugs and the existence
of drugstores or pharmacies in the area.
The two major strategic components of the PNDP are the Philippine National Drug Formulary (PNDF) as
mandated by EO 175, signed on May 22, 1987 and the Generics Act of 1988 (RA 6675).
The Generics Act of 1988 aims to promote and require the use of generic terminology in the
importation, manufacturing, distribution, marketing, advertising, prescribing and dispensing of drugs.
Complementing the Act is the PNDF or essential drugs list the main strategy in promoting rational drug
use. Pursuant to EO 49, PNDF is also used as a basis for the procurement of drug products in the
government sector. It contains the core list of drugs in their international nonproprietary name/generic
names, as well as a complementary list of alternative drugs. However, several barriers reduced the gains
from implementing these policies: there was no administrative mechanism to track local
implementation of these policies; GATT/WTO agreements worsened the uneven playing field in the
pharmaceutical industry; and, the country lacks a pricing mechanism that ensures affordable generic
medicines can compete with branded ones.
2008 1988 Generics Act amended to Republic Act No. 9502 Cheaper and Quality Medicines Act.
1988 RA 6675 The Generics Act of 1988 Aims to promote and assure adequate supply, distribution and
use of generics drugs and medicines. This law also emphasizes increased awareness among health
professionals of the scientific basis for the therapeutic effectiveness of medicines and promotes drug
safety
RA 9502 Universally Accessible Cheaper and Quality Medicines Act
Allows the government to adopt appropriate measures to promote and ensure access to affordable
quality drugs and medicines for all.
SEC. 24. Illegal Acts of Price Manipulation. - Without prejudice to the provisions of existing laws on
goods not covered by this Act, it shall be unlawful for any manufacturer, importer, trader, distributor,
wholesaler, retailer, or any person engaged in any method of disposition of drugs and medicines to
engage in acts of price manipulation such as hoarding, profiteering, or illegal combination or forming
cartel, as defined under Section 5 of Republic Act No. 7581, otherwise known as the Price Act, and all
other acts committed in restraint of trade.
SEC. 32. Quality Assurance of Drugs. - The Bureau of Food and Drugs shall take the necessary steps to
ensure that all drugs authorized for marketing in the country shall conform to international standards
for the content, purity and quality of pharmaceutical products as established in the International
Pharmacopoeia: Provided, That imported products in finished dosage forms, should be certified under
the World Health Organization (WHO) certification scheme on the quality of pharmaceutical products
moving in international commerce: Provided, further, That the registration for multisource
pharmaceutical products should conform to the WHO guidelines on registration requirements to
establish interchangeability.
"Pharmaceutical, drug or biological manufacturing establishments, importers and wholesalers of drugs,
medicines, or biologic products, shall not sell their products for re-sale except only to retail drug outlets,
hospital pharmacies or to other drug wholesalers under the supervision of a registered pharmacist, and
supermarkets, convenience stores, other retail establishments for over-the-counter drugs, duly licensed
by the Bureau of Food and Drugs.
Sales of pharmaceuticals in the Philippines are conservatively estimated at Php100 billion annually, with
70 percent being accounted for by multinational firms (Pablico, 2006). According to PHAP data (Ball,
2010), about 80 percent of the sales are in drug stores, 10 percent in hospitals, and 10 percent in other
retail outlets. Out of total sales, 63 percent comes from a major pharmaceutical chain, 17 percentcomes
from the combined sales of all other small independent pharmacies, 7 percent comes from private
hospitals, 2.5 comes from public hospitals, 10 percentcomes from other private outlets, and 0.5 percent
comes from other public outlets. Thus, the private sector as a whole holds an inordinate share of the
market (more than 90 percent), while the public sector is a very minor financier and purchaser.
Drugs in the Philippines are more expensive than in other countries in Asia, and in countries of similar
economic status. Drug prices of brand names in the Philippines are anywhere from 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.
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,
Factors Affecting Drug Prices
Most drug ingredients in the Philippines are imported. Most local drug manufacturing is through a toll
system, a version of contract manufacturing where production is outsourced by an originating company
to third parties. About 80 percent of toll manufacturing by multinational companies is done by Interphil
Laboratories, a sister company of ZuelligPharma, which itself accounts for about 80 percent of wholesale
distribution (Pablico, 2006).

Lack of household knowledge of drugs, pervasive marketing and advertising, the strong role of medical
representation in the sale of drugs, and the incentives given to prescribing doctors have been frequently
cited as contributing to the persistence high drug prices and the high consumption of branded drugs in
the country.

The Cheaper Medicines Act confers on the President the authority to regulate the price ofmedicines
and drugs and empowers the DOH Secretary to establish a drug price monitoring and regulation system.
Pursuant to this Act, the President issued Executive Order (E.O.) 821 (made effective August 15, 2009)
prescribing the maximum retail prices (MRP) also known as government mediated access prices
(GMAP) for selected medicines that address some diseases which are common causes of morbidity
and mortality in the country. The E.O. covered only five active pharmaceutical ingredients including
some antihypertensive, antibiotics, and anti-neoplastics/anti-cancer.