FIFTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
) 
SENATE 
S.B. No. 2951 
'11 
AUG 23 l' J :15 
Introduced by SENATOR MANNY VILLAR 
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 (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$.02) in Pakistan 
and 0.69 centavos in India (less than US$.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. 


FIFTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
) 
SENATE 
S.B. No. 2951 
Introduced by SENATOR MANNY VILLAR 
AN ACT 
~~ 
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'1 j 
AUG 23 P 3 :15 
TO REQUIRE MANUFACTURERS, DISTRIBUTORS AND 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: 
1 
SECTION 1. Short Title, -
This Act shall be known as the "Annual 
2 
Marketing Expenses Report for Drug Manufacturers Act of 2011," 
3 
4 
SECTION 2. Declaration of Principles. - The maintenance of peace and 
5 
order, the protection of life, liberty, and property, and promotion of the general 
6 
welfare are essential for the enjoyment by all the people of the blessings of 
7 
democracy, In order to protect the general welfare of the population as regards 
8 
access to cheap medicines, it is the policy of the state to inquire into the 
9 
reasonability of marketing expenses of drug firms, 
10 
11 
SECTION 3. Definition of Terms. -
As used in this Act, unless the 
12 
context clearly indicates otherwise, the following terms shall have the following 
13 
meanings: 
14 
15 
(a) "Labeler" means any person or entity that receives a prescription drug 
16 
from the manufacturer or a wholesaler of such drug, and repackages such 
17 
drug to be dispensed in this country, 
18 
19 
(b) "Manufacturer" means a manufacturer of prescription drugs dispensed 
20 
in this country, and shall include the subsidiary or affiliate of such 
21 
manufacturer. 
22 
23 
(c) 
"Marketing" 
means 
advertising 
and 
promotional 
activities for 
24 
prescription drugs dispensed in this country including, but not limited to, 
25 
those activities described in this Act. 
26 
27 
SECTION 4. Reportorial Requirement -
The Secretary of Health is 
28 
authorized and directed to require manufacturers, distributors and labelers of 
29 
prescription drugs, which dispense such drugs in this country and which employ, 
30 
direct or utilize marketing representatives, to report the marketing costs of each 
31 
of its prescription drugs dispensed in this country, 
32 


1 
SECTION 5. Manner of Reporting. - On or before February 1 of each 
2 
year every manufacturer, distributor and labeler shall file a report with the 
3 
Department of Health on its marketing activities conducted in the country. Such 
4 
report shall be submitted in such form and manner, and include the payment of 
5 
such a fee as shall be determined by the Secretary of Health. Each such report 
6 
shall include the value, nature, purpose and recipient of marketing expenses 
7 
including, but not limited to: 
8 
9 
(a) all expenses associated with advertising, marketing and direct 
10 
promotion of prescription drugs through radio, television, magazines, 
11 
newspapers, direct mail and telephone communications as they pertain to 
12 
residents of e country; 
13 
14 
(b) all expenses associated with educational or informational programs, 
15 
materials and seminars, and remuneration for promoting or participating in 
16 
educational or informational sessions, 
regardless of whether the 
17 
manufacturer, 
distributor or 
labeler provides 
the 
educational 
or 
18 
informational sessions or materials; 
19 
20 
(c) all expenses associated with food, entertainment and gifts valued at 
21 
more that One Thousand Pesos (Php 1,000.00) and anything provided to 
22 
a health care professional for less than market value; 
23 
24 
(d) all expenses associated with trips and travel for marketing purposes; 
25 
26 
(e) all expenses associated with product samples, except for samples that 
27 
will be distributed free of charge to patients; and 
28 
29 
(f) the aggregate cost of all employees and contractors of the 
30 
manufacturer, distributor or labeler who directly or indirectly engage in the 
31 
advertising or promotional activities, including all forms of payment to such 
32 
employees and contractors. 
33 
The cost reported pursuant to this Act shall reflect only that portion of 
34 
payment to employees and contractors that pertains to activities within the 
35 
country or to recipients of the advertising or promotional activities who are 
36 
residents of or are employed in this country. 
37 
38 
SECTION 6. Exceptions. - The following marketing expenses shall not 
39 
be subject to the reporting requirements of this subdivision: 
40 
41 
(a) expenses of One Thousand Pesos or less; 
42 
43 
(b) Reasonable compensation and reimbursement for expenses in 
44 
connection with a bona fide clinical trial of a new vaccine, therapy or 
45 
treatment; and 
46 
47 
(c) scholarships and reimbursement of expenses for attending a significant 
48 
educational, scientific or policy-making conference or seminar of a 
49 
national, regional or specialty medical or other professional association if 
50 
the recipient of the scholarship is chosen by the association sponsoring 
51 
the conference or seminar. 
52 
53 
SECTION 7. Department Reports. - Annually on or before November 30, 
54 
the Department of Health shall submit a report, providing information in 
55 
aggregate form, on prescription drug marketing expenses to both Houses of 
56 
Congress. One year after the passage of this Act and every two years thereafter, 
57 
the Department of Health shall provide a report to both Houses of Congress, 


1 
providing information in aggregate form, containing an analysis of the data 
2 
submitted to the Department of Health, including the scope of prescription drug 
3 
marketing activities and expenses and their effect on the cost, utilization and 
4 
delivery of health care services and any recommendations with regard to 
5 
marketing activities of prescription drug manufacturers, distributors and labelers. 
6 
7 
SECTION 8. Violations. - Any person who violates any provision of this 
8 
Act shall be punished with a penalty of Five Hundred Thousand Pesos 
9 
(Php500,OOO.OO). Subsequent violations shall be cause for the revocation of the 
10 
manufacturer's, distributor's or labeler's permit to do business in the country. 
11 
12 
SECTION 9. Implementing Rules and Regulations. - Six (6) months 
13 
after the passage of this Act, the Secretary of Health shall promulgate the rules 
14 
and regulations necessary to implement the provisions of this Act. 
15 
16 
SECTION 10. Separability Clause. - If any provision or part of this Act is 
17 
held invalid, the remainder of this Act shall not be affected thereby. 
18 
19 
SECTION 11. Repealing Clause. - All laws, decrees, executive order or 
20 
rules and regulations inconsistent with this Act are hereby repealed or modified 
21 
accordingly. 
22 
23 
SECTION 12. Effectivity Clause. - This Act shall take effect fifteen (15) 
24 
days after its pu blication in the Official Gazette or two (2) newspapers of general 
25 
circulation. 
26 
27 
Approved, 
28