Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 1228

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$1) per 5-mg tablet; while in India
and Pakistan, the same drug manufactured by the same company is priced at
around 5.77 pesos (US$.14). Plendil, also for hypertension, is priced in the
Philippines at 21.82 pesos (USS.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$.02) in Pakistan
and 0.69 centavos in India (less than US$.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 wl ARROYO. cron ARROYO

Second District, Camarines Sur nd District, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

House Bill No.

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 2010.”

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 shalll 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
tules 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,