Republic of the Philippines.
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 1382

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
TO REQUIRE MANUFACTURERS OR LABELERS OF PRESCRIPTION DRUGS TO
REPORT THEIR ANNUAL MARKETING COSTS

EXPLANATORY NOTE

The Constitution in Article 2, Section 5 provides that:

Section 5. The maintenance of peace and order, the protection of
life, liberty, and property, and promotion of the general welfare are essential for
the enjoyment by all the people of the blessings of democracy.

Article 2, Section 15, also provides that:

Section 15. The State shall protect and promote the right to health of the
people and instill health consciousness among them

The cost of medicines in the Philippines is among the highest in the world. A
study shows that it would take a full six days of wages for an average worker to
purchase basic medicines in the country. There are more than 17,000 registered drugs
in the local market, but a majority of the population can barely afford these expensive
essential drugs.

According to the same news article, Lawmakers are bewildered why Norvasc, a
medicine for hypertension, is sold in the Philippines by a multinational pharmaceutical
company for 41.41 pesos (US$1) per 5-mg tablet; while in India and Pakistan, the same

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drug manufactured by the same company is priced at around 5.77 pesos (USS.14)
Plendil, also for hypertension, is priced in the Philippines at 21.82 pesos (US$.54) per
tablet while it costs only 2.69 pesos (US$.07) in India. A Ventolin inhaler for asthma
patients is sold for 315.00 pesos (nearly US$8) in the local market while in India it costs
only 126.78 pesos (US$3). Other medicines also show the same disparity. Ponstan, a
common painkiller, costs only 3.22 pesos (US$.08) in India but costs 24.92 pesos
(US$.60) per pill in the Philippines. Bactrim 400, priced at 17.75 pesos (US$.40) per
tablet in the Philippines, can be bought for only 1 peso (US$.02) in Pakistan and 0.69
centavos in India (less than USS.01).

In a US study, two significant factors contributing to the increase in drug costs
are the large annual profits of drug companies and the costs in promotional spending by
pharmaceutical manufacturers. Drug companies, however, argue that prices are high
due to the high cost of Research and Development (R&D). However, according to the
Kaiser Family Foundation, since 1996 promotional spending by drug manufacturers in
the US has increased by 60 percent. Promotional spending by drug manufacturers
includes paying for television commercials, giving free drug samples to physicians, and
taking physicians and their staffs on expensive trips.

The situation in the Philippines is no different. Drugs manufacturers spend
millions of pesos in marketing expenses. In order to create policy decisions as regards
the problem of high medicine costs, lawmakers should be informed of the current level
of marketing costs in relation to total production cost of drug manufacturers. This bill
aims to require drug manufacturers to submit annual reports of their marketing
‘expenses to the Secretary of Health in order to fill in the information gap in the minds of
our lawmakers.

We therefore urge our colleagues to ensure the immediate approval of this
proposed measure.

DIOSDADO MACAPAGAL ARROYO GLORIA MACAPAGAL ARROYO
‘Second District, Camarines Sur Second District, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 1382

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
TO REQUIRE MANUFACTURERS OR LABELERS OF PRESCRIPTION DRUGS TO
REPORT THEIR ANNUAL MARKETING COSTS

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Annual Marketing
Expenses Report for Drug Manufacturers Act of 2013.”

SECTION 2. Declaration of Principles. - The maintenance of peace and order,
the protection of life, liberty, and property, and promotion of the general welfare are
essential for the enjoyment by all the people of the blessings of democracy. In order to
protect the general welfare of the population as regards access to cheap medicines, it is
the policy of the state to inquire into the reasonability of marketing expenses of drug
firms.

SECTION 3. Definition of Terms. — As used in this Act, unless the context clearly
indicates otherwise, the following terms shall have the following meanings:

(a) “Labeler” means any person or entity that receives a prescription drug from
the manufacturer or a wholesaler of such drug, and repackages such drug to be
dispensed in this country.

(b) “Manufacturer” means a manufacturer of prescription drugs dispensed in this
country, and shall include the subsidiary or affiliate of such manufacturer.


(c) “Marketing” means advertising and promotional activities for prescription
drugs dispensed in this country including, but not limited to, those activities
described in this Act.

SECTION 4. Reportorial Requirement. — The Secretary of Health is authorized
and directed to require manufacturers or labelers of prescription drugs, which dispense
such drugs in this country and which employ, direct or utilize marketing representatives,
to report the marketing costs of each of its prescription drugs dispensed in this country.

SECTION 5. Manner of Reporting. - On or before February 1 of each year every
manufacturer and labeler shall file a report with the Department of Health on its
marketing activities conducted in the country. Such report shall be submitted in such
form and manner, and include the payment of such a fee as shall be determined by the
Secretary of Health. Each such report shall include the value, nature, purpose and
recipient of marketing expenses including, but not limited to:

(a) all expenses associated with advertising, marketing and direct promotion of
prescription drugs through radio, television, magazines, newspapers, direct mail
and telephone communications as they pertain to residents of e country;

(b) all expenses associated with educational or informational programs, materials
and seminars, and remuneration for promoting or participating in educational or
informational sessions, regardless of whether the manufacturer or labeler
provides the educational or informational sessions or materials;

(c) all expenses associated with food, entertainment and gifts valued at more that
One Thousand Pesos (Php 1,000.00) and anything provided to a health care
professional for less than market value;

(d) all expenses associated with trips and travel for marketing purposes;

(e) all expenses associated with product samples, except for samples that will be
distributed free of charge to patients; and

(f) the aggregate cost of all employees and contractors of the manufacturer or
labeler who directly or indirectly engage in the advertising or promotional
activities, including all forms of payment to such employees and contractors.

The cost reported pursuant to this Act shall reflect only that portion of payment to
employees and contractors that pertains to activities within the country or to recipients
of the advertising or promotional activities who are residents of or are employed in this
country.

SECTION 6. Exceptions. - The following marketing expenses shall not be
subject to the reporting requirements of this subdivision


(a) expenses of One Thousand Pesos or less;

(b) Reasonable compensation and reimbursement for expenses in connection
with a bona fide clinical trial of a new vaccine, therapy or treatment; and

(c) scholarships and reimbursement of expenses for attending a significant
educational, scientific or policy-making conference or seminar of a national,
regional or specialty medical or other professional association if the recipient of
the scholarship is chosen by the association sponsoring the conference or
seminar.

SECTION 7. Department Reports. — Annually on or before November 30, the
Department of Health shall submit a report, providing information in aggregate form, on
prescription drug marketing expenses to both Houses of Congress. One year after the
passage of this Act and every two years thereafter, the Department of Health shall
provide a report to both Houses of Congress, providing information in aggregate form,
containing an analysis of the data submitted to the Department of Health, including the
scope of prescription drug marketing activities and expenses and their effect on the
cost, utilization and delivery of health care services and any recommendations with
regard to marketing activities of prescription drug manufacturers and labelers.

SECTION 8. Violations. — Any person who violates any provision of this Act shall
be punished with a penalty of Five Hundred Thousand Pesos (Php500,000.00)
Subsequent violations shall be cause for the revocation of the manufacturer's or
labeler’s permit to do business in the country.

SECTION 9. Implementing Rules and Regulations. — Six (6) months after the
passage of this Act, the Secretary of Health shall promulgate the rules and regulations
necessary to implement the provisions of this Act.

SECTION 10. Separability Clause. — If any provision or part of this Act is held
invalid, the remainder of this Act shall not be affected thereby.

SECTION 11. Repealing Clause. — All laws, decrees, executive order or rules
and regulations inconsistent with this Act are hereby repealed or modified accordingly.

SECTION 12. Effectivity Clause. — This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or two (2) newspapers of general circulation.

Approved,

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