jx 
'1) 
8 
FOURTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
i 
,I\ 1%" 
3 
First Regular Session 
1 
SENATE 
S. BILL NO. '155 
Introduced by Senator Antonio F. Trillanes I V  
EXPLANATORY NOTE 
The very high cost of medicines in the Philippines is a common 
complaint of citizens from all walks of life and a perennial issue among 
policy makers, local and foreign drug companies and medical 
practitioners. A comparison of the prices of medicines obtained from 
the Department of Health (DOH) 
reveals that retail prices of 
commonly-used drugs in the Philippines are one of the highest, if not 
the highest, in Asia. 
One of the major factors affecting the cost of medicines in the 
Philippines is the country's heavy dependence on imported basic raw 
materials. Our drug industry does not have the sufficient capacity to 
produce the active substances or basic raw materials used in drug 
manufacture. 
Except for a few firms, most of the players in the 
industry merely buy finished bulk chemicals from abroad and re- 
compound, reformulate and/or repackage them into finished products. 
Another related factor is the common and well-known practice of 
"transfer pricing" prevailing in the industry that begins from the 
moment raw materials are acquired until the phase finished products 
are distributed in the market. 
Under this practice, a multinational 
company inflates the cost of raw materials and sells the to another 
drug company, either a subsidiary or a holder of a voluntary or 
compulsory license, at a price higher than that prevailing in the world 
market. Almost fifty percent (50%) of the cost of branded drugs in 
the local market are artificially inflated due to "transfer pricing". 
Republic Act No. 8203, otherwise known as the "Special Law on 
Counterfeit Drugs", classifies, among others, an unregistered imported 
drug product, except drugs brought into the country for personal use, 
as counterfeit drugs. 
Because of this, drug distributors, specifically 
drug importers, resort to exclusive distributorship that prevents 
importation of the same brand by companies other than those that 
have Foreign Agency Agreement with multinational suppliers (BFAD 
Administrative (Order 56, 1989). 
The Bureau of Food and Drug's 
(BFAD) exclusive distributorship policy allows drug manufacturers to 
dictate drug prices, enabling them to monopolize the market by 
preventing parallel importation by other companies. 
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Under present conditions, Filipinos also do not have much choice as to 
what drugs to buy because drug companies have found a way to go 
around the "Generics Law" (RA 6675). Drug companies, who have 
recognized a long time ago the significant role of the prescribers in 
their marketing strategies, offer doctors attractive incentives in 
exchange for pushing their products to the consumers. 
No penal 
sanction in R.A. 6675 or even from the Professional Regulation 
Commission (PRC) is meted for the highly unethical practice of 
accepting gifts, rewards and incentives by medical practitioners for 
prescribing certain drugs. 
The industry players' high expenditures on marketing, advertising and 
promotion all the more contribute to the high cost of medicines. The 
Generics Law has become ineffective in the sense that it fails to give 
consumers any choice or alternative of cheaper drugs because 
compliance to generic prescription is not strictly enforced and/or 
monitored. 
Another factor that slows down the full implementation of the Generics 
Law is the long period that drug manufacturers have to wait for a 
patent to expire before it is allowed to manufacture cheaper drug 
products. R.A. 8293 otherwise known as the "Intellectual Property 
Code of the Philippines", sets the term of potential in twenty (20) 
years from the filing of the application, in the Philippines. Amending 
the law by exempting pharmaceutical products will shorten the patent 
period and once those brand names become off patent, compulsory 
licensing should allowed. 
Moreover, there is that prevailing perception among consumers of the 
low quality - as to safety and efficacy - of generic products in the local 
market. The proliferation of sub-standard and fake drugs, and the 
lack of administrative and technical capability and/or sufficient 
resources of the Department of Health (DOH) and Bureau of Food and 
Drug (BFAD) to conduct laboratory tests on newly produced drugs 
have raised doubts on the efficacy of generic drugs. 
This puts the 
consumers at the mercy of expensive branded products. 
The Pharmacy Law as amended in 1978 needs to be reviewed to make 
it more relevant to present times. Liberalization of trade outlets will 
allow the selling of over-the-counter drugs in supermarkets and other 
similar establishments thereby making them accessible to the masses. 
As it is now, going to an accredited drug outlet (which could be few 
and far between, particularly in the rural areas) entails transportation 
expenses that add up to the total cost of the machine. 
I n  the meantime, thousands of Filipinos there are literally dying 
without receiving proper medication and treatment because the 
medicines they need have been priced out of their reach. 
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There are, however, simple measures that could be adopted which, 
together, could Significantly lower the cost of medicines. These include 
setting stiffer penalty for non-compliance to generic prescription, 
multinational corporations (MNC's) mandatory disclosure of selling 
prices in different countries, liberalization of trade outlets, amending 
the policy on granting distributorship, amending the provision on 
patents, 
and 
conducting 
congressional 
oversight 
on 
the 
implementation of the Generics Law and the National Drug Policy. 
This bill is being filed to put into place these small measures which, 
together, are intended to significantly bring down the price of 
medicines. It is the earnest belief of the author that the passage of 
this bill will greatly contribute to the reduction of the price of 
pharmaceutical products in the country to more realistic and affordable 
levels. 
In view of the foregoing considerations, the immediate passage of this 
bill is earnestly sought. 
A~%ONIO F. TRILLANES IV 
3 


-1/ 
FOURTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
if. 4 
I . )  
First Regular Session 
1 
SENATE 
S. BILL NO. 
755 
Introduced by Senator Antonio F. Trillanes I V  
AN ACT 
PRESCRIBING SPECIAL MEASURES TO LOWER THE PRICE OF 
MEDICINES AND OTHER RELATED PURPOSES. 
BE IT ENACTED by the Senate and the House of Representatives 
of the Philippines in Congress assembled, 
SECTION 1. Short Title. - This Act shall be known as the 
"Affordable Medicines Act". 
SEC. 2. Declaration of Policv. - It is hereby declared the 
policy of the State: 
a. To promote, encourage and require the use of generic 
terminology 
in 
the 
importation, 
manufacture, 
distribution, 
marketing, 
advertising and promotion, 
prescription, and dispensing of drugs; 
b. To emphasize the moral obligation of medical and para- 
medical practitioners relative to their prescription of 
drugs and/or medical advise; 
c. To ensure the adequate supply of drugs with generic 
names at the lowest possible cost and the availability of 
over-the- counter drugs in establishments other than 
accredited drug outlets; 
d. To promote drug safety and efficacy simultaneous with 
the full implementation of the Generics Law (RA 6675); 
e. To set the patent period for pharmaceutical products at 
twenty (20) years from date of the filing of the original 
application, regardless of the place of application; and 
allow parallel imports of pharmaceutical products. 
f. 
To amend the policy on granting distributorship to 
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SEC. 2. Strenathenina the Generics Law. - Section 12 of 
Republic Act No. 6675 otherwise known as the "Generics Act of 1988" 
is hereby amended to read as follows: 
"Sec. 12. Penalty, - A) Any person who shall violate 
Section 6 (a) or 6(b) of this Act shall suffer penalty 
graduated hereunder, viz: 
a. for the first conviction, he shall suffer the 
penalty of reprimand which shall be officially 
recorded in the appropriate books of the 
Professional Regulation Corn-mission. 
b. for the second conviction, the penalty of 
fine in the amount of not less than [two 
thousand pesos] TEN THOUSAND PESOS 
(P10,OOO. 00) but 
not exceeding 
[five 
thousand pesos] TWENN FIVE THOUSAND 
PESOS (P25,OOO.OO) at the discretion of the 
court. 
c. for the third conviction, the penalty of fine 
in the amount of not less than [five 
thousand pesos] 
twenty five thousand 
(P25,OOO.OO) 
but 
not 
exceeding 
[ten 
thousand pesos] FIFTY THOUSAND PESOS 
(P50,OOO.OO) and suspension of his license 
to practice his profession for SIXTY (60) 
days at the discretion of the court. 
d. for the fourth and subsequent convictions, 
the penalty of fine of not less than [ten 
thousand pesos] ONE HUNDRED THOUSAND 
PESOS (P200,OOO.OO) and suspension of his 
license to practice his profession for one 
year or longer at the discretion of the 
court." 
SEC. 4. A
-
 
w. - Section 2 of PD 
1363 is hereby amended to read as follows: 
"Sec. 
25, 
Sale 
of 
medicine, 
pharmaceuticals, drugs and devices. 
-- No 
medicine, pharmaceutical or drug, except for 
those which are non-prescription or over-the- 
counter of whatever nature and kind, or device 
shall be compounded, dispensed, sold or 
resold, or otherwise be made available to the 
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consuming public except through a prescription 
drugstore 
or 
hospital 
pharmacy, 
duly 
established in accordance with the provisions 
of this Act, NON-PRESCRIPTION OR OVER- 
THE-COUNTER DRUGS MAY BE SOLD I N  
THEIR ORIGINAL PACKAGES, BOTTLES OR 
CONTAINERS OR I N  SMALL QUANTITIES 
NOT ON THEIR ORIGINAL CONTAINERS 
TO THE CONSUMING PUBLIC THROUGH 
SUPERMARKETS, CONVENXENCE STORES 
AND OTHER RETAIL ESTABLISHMENTS. 
"Pharmaceutical, 
drug 
or 
biological 
manufacturing establishment, importers and 
wholesalers of drugs, medicines or biological 
products, shall not sell their products for re- 
sale except only to retail drugstores, hospital 
pharmacies or to other drug wholesalers under 
the supervision of registered pharmacists, AND 
SUPERMARKiZTS, CONVENIENCE STORES AND 
OTHER RETAIL ESTABLISHMENTS FOR OVER- 
THE-COUNTER DRUGS 
duly established and 
licensed under the Retail Trade Law." 
SEC. 5. 
Disclosure of Sellina Prices bv Multinational 
Coroorations CMNCsl. - The Department of Health (DOH) shall issue 
an administrative order requiring multi-national drug companies 
and/or their local subsidiaries, agents, licensees or representatives to 
disclose on a semestral basis the selling prices of the drug they 
manufacture and/or distribute in the Philippines vis-a-vis prices in 
other countries. Sanctions for non-compliance shall be provided for in 
the DOH administrative order. 
SEC. 6. 
Parallel imDortation and distribution. - 
Parallel 
importation shall be allowed by allowing more than one (1) Philippine 
importer enter into a Foreign Agency Agreement with a foreign 
supplier. BFAD Administrative Order No. 56, Series of 1989 shall be 
amended to conform to the requirement of this provision. In cases 
when the price difference between the local selling price of a drug or 
pharmaceutical product exceeds by twenty percent (20%) the selling 
price of the same product in another country, the DOH is mandated 
and authorized to import and/or authorize the importation of the said 
drug or pharmaceutical product by a duly licensed distributor. 
The 
DOH and/or said drug distributor may then distribute said drug or 
pharmaceutical product all over the country in the same manner as 
distributor authorized by the manufacturer/patentee of said products 
may do so. 
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SEC. 7. Patents for Pharmaceutkal Products. - Section 54 
of R.A. 8293, otherwise known as the “Intellectual Property Code of 
the Philippines”, is hereby amended as follows: 
“Sec. 54. Term of Patent. - The term of 
a patent shall be twenty (20) years from the 
filing date of the application EXCEPT IN THE 
CASE OF PHARMACEUTICAL PRODUCTS WHICH 
SHALL BE TWENN (20) YEARS FROM THE 
DATE 
OF 
FILING 
OF 
THE 
ORIGINAL 
APPLICATION FOR THE SAME, 
BE IT HERE IN 
THE 
PHILIPPINES 
OR 
OUTSIDE 
THE 
PHILIPPINES.” 
SEC. 8. Congressional Oversight on Implementation of 
Generics Law and National Drug Policy. - 
Congress shall 
constitute an Oversight Committee to assess and monitor the 
implementation of the Generics Law and National Drug Policy and to 
recommend measures that would strengthen and enforce the same. 
Evaluation and assessment of the implementation of National Drug 
Policy shall beef up the administrative and technical capability of 
Department of Health (DOH) and Bureau of Food and Drugs (BFAD) in 
conducting laboratory tests to minimize, if not totally erase, doubts on 
the efficacy of generic drugs resulting to their low utilization. 
SEC. 9. Imdementina Aaencv. - The Department of Health 
shall be the main agency to enforce the provisions of this Act. It shall 
likewise promulgate the rules and regulations necessary to effectively 
implement the provisions of this Act. 
SEC. 10. SeDarabilitv Clause. - 
I f  for any reason any 
provision of this Act is declared unconstitutional or invalid, 
the 
remainder or any provisions hereof not affected thereby shall remain 
in force and effect. 
Sec. 11. ReDealina 61 ause. - 
The provisions of any law, 
executive orders presidential decrees or other issuance inconsistent 
with this Act are hereby repealed or modified accordingly. 
Sec. 12. Effectivitw. - This Act shall stake effect fifteen (1.5) 
days after its complete publication in two (2) newspapers of general 
circulation. 
Approved, 
7