Republic of the Philippines
HOUSE OF REPRESENTATIVES":

Quezon City

2 yy

NINETEENTH CONGRESS 2) nse: 4°01 0V +
First Regular Session x5

HOUSE BILL NO. 284

Introduced by: Rep. Keith Micah “Atty. Mike" D.L. Tan’

AN ACT
PROVIDING FOR THE STOCKPILING OF STRATEGIC AND CRITICAL DRUGS AND.
MEDICINES, VACCINES, DEVICES, AND MATERIALS FOR PUBLIC HEALTH
EMERGENCIES, CREATING FOR THE PURPOSE THE HEALTH PROCUREMENT AND.
STOCKPILING BUREAU UNDER THE DEPARTMENT OF HEALTH, AND APPROPRIATING.
FUNDS THEREFOR

EXPLANATORY NOTE

The report by the Global Preparedness Monitoring Board (GPMB), an independent
monitoring and advocacy body that aims to assess the world’s ability to protect itself from health
‘emergencies and identify critical gaps to preparedness across multiple perspectives, warns that
humankind is stumbling toward the 21st-century equivalent of the 1918 influenza pandemic,
which affected one-third of the world’s population and killed approximately 50 million people.

Based on the report, only one third of countrieshave the capacities required under the
International Health Regulations (IHR) and that the great majority of national health systems
would be unable to handle a large influx of patients infected with a respiratory pathogen capable
of easy transmissibility and high mortality

As pointed out in the Joint External Evaluation (JEE) Mission report, the Philippines, due
to its location, is one of the most natural-disaster prone countries in the world and in the past
decade the country has faced challenges in making solid progress in infectious disease control.
Given this situation, the country's preparedness in times of public health emergencies is
significantly necessary such as during pandemics and natural disasters.

‘One case in point that caught the country and the world flat footed is the current COVID-
19 situation, which affected the global and local production and distribution of pharmaceuticals
and medical devices as well as the supply of raw materials, active pharmaceutical ingredients,
excipients, packaging materials as well as finished medical products needed to combat COVID-
19 and other diseases of public health. This is after India and China, two of the biggest country
suppliers of active ingredients and finished generic products, were both severely affected by the
pandemic.

To make things worse, some countries like France, Germany, Turkey, Russia, and India
have imposed limits on export of medicines and medical supplies/equipment such as facemasks,
shields, and ventilators to mitigate critical shortages in their countries, The European Union has
also imposed a block-wide export ban on some medical protective equipment in order to keep
adequate supplies within the region in the face of scarcity in supply amid the increasing demand

This bill, which was approved by the House and transmitted to the Senate during the 18th
Congress, aims to protect public health by addressing the problem of access to critical drugs and
medicines, vaccines, devices, and materials in times of public health emergencies by mandating
the procurement and stockpiling of critical and strategic pharmaceuticals and medical devices as
well as the supply of raw materials.

It is hoped that through this proposal, problems on the lack of access to strategic and
critical drugs and medicines, vaccines, devices, and materials in times of national need may now
be adequately addressed.

Hence, immediate passage of this bill s earnestly being sought.


J a

Keith Micah “Atty. Mike” D.L. Tan
4th District, Quezon


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

HOUSE BILLNO.__284

Introduced by: Rep. Keith Micah “Atty. Mike” D.L. Tan

AN ACT
PROVIDING FOR THE STOCKPILING OF STRATEGIC AND CRITICAL DRUGS AND
MEDICINES, VACCINES, DEVICES, AND MATERIALS FOR PUBLIC HEALTH
EMERGENCIES, CREATING FOR THE PURPOSE THE HEALTH PROCUREMENT AND
STOCKPILING BUREAU UNDER THE DEPARTMENT OF HEALTH, AND APPROPRIATING.
FUNDS THEREFOR

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 “Health Procurement and
Stockpiling Act”.

SEC. 2. Declaration ofPolicy. - It is the policy ofthe State to protect and promote the right
to health of the people and instill health consciousness among them. The State also mandates
the adoption of an integrated and comprehensive approach to health development.

Towards this end, if shall protect public health and safety by preventing and controlling the
spread of diseases and other health hazards through the stockpiling of essential and critical drugs
and medicines, vaccines, devices, and materials to effectively and swiftly address the devastating
consequences of public health emergencies.

SEC. 3. Definition of Terms. - As used in this Act:

(a) Countertrade refers to a supplemental trade tool in connection with transactions
involving the importation or procurement of foreign capital equipment, machinery, products, goods
and services and amounting to at least One million dollars (US$1M) and above or its foreign
currency equivalent. It shall also cover any of the following arrangements:

(1) Counterpurchase - also known as counter exports, this refers to parallel transactions or
reciprocal trade, whereby the foreign supplier reciprocally commits to purchase Philippine goods
or services, to be exported to the supplier's country or a third country;

(2) Product Buy Back - whereby the foreign supplier of the equipment or machinery is paid
for with the resultant product(s) or good(s) made or manufactured by such equipment or
machinery;

(3) Offset - whereby the foreign supplier commits to introduce investments or technology
transfer in the Philippines, or assist in establishing new industries or improving existing industries
to generate or save foreign exchange or create increased employment, which may or may not be
related to the machinery, equipment, products or goods so imported or services procured;

(4) Trade-for-Debt Swap - whereby a loan or credit accommodation obtained by a
government agency or government-owned or -controlled corporation from a foreign government
or creditor which has remained outstanding and unpaid is arranged to be settled in full or partially
by way of sales of products, goods or services to be provided by a third party rather than by
payment in foreign currency; or

(5) Any form of combination or variation of the above arrangements that results in the
inflow to the country of foreign exchange, or savings thereof, investments, training and technology
transfer, grants for educational, scientific, technological, environmental and related research
programs or projects, which will enhance Philippine industrial or export competitiveness or
contribute to the creation of new competitive industries, enhance existing industries or utilization
of Philippine services or expertise by foreign clients, or result in the reduction of public debt;


(b) Device refers to instruments, apparatus, or contrivances, including their components,
parts, and accessories that are authorized by the Food and Drug Administration (FDA), intended
(1) for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man; or (2) to
affect the structure or any function of the human body;

(©) Drugs and medicines refer to any chemical compound or biological substance, other
‘than food, that are authorized by the FDA, intended for use in the treatment, prevention or

(1) Any article recognized in the official United States Pharmacopoeia-National Formulary,
official Homeopathic Pharmacopoeia of the United States, Philippine Pharmacopoeia,
Philippinediagnosis of disease in humans or animals, including:National Drug Formulary, British
Pharmacopoeia, European Pharmacopoeia, JapanesePharmacopoeia, Indian Pharmacopoeia,
any national compendium or supplement to any of them;

(2) Any article intended for use in the diagnosis, cure, mitigation, treatment, or prevention
of disease in humans or animals;

(3) Any article other than food intended to affect the structure or function of the human
body or animals;

(4) Any article intended for use as a component of articles specified in clauses (1), (2),
and (3) not including devices or their components, parts, or accessories; and

(8) Herbal and/or traditional drugs which are articles of plant or animal origin used in folk
medicine which are:

(i) Recognized in the Philippine National Drug Formulary:

(ii) Intended for use in the treatment or cure or mitigation of disease symptoms, injury or
body defects in humans;

(ii) Other than food, intended to affect the structure or any function of the human body;

(iv) In finished or ready-to-use dosage form; and

(v) Intended for use as a component of any of the articles specified in clauses (i), (i), (ii),
and (iv);(d) Materials refer to essential medical and/or life-saving supplies needed in times of
pandemics such as face masks, body bags, personal protective equipment, and similar supplies
‘or equipment;

(e) Public health emergency refers to an occurrence or imminent threat of an illness or
health condition that:

(1) Is caused by any of the following:
(i) Bioterrorism;

(li) Appearance of @ novel or previously controlled or eradicated infectious agent or
biological toxin;

(ii) A natural disaster;

(iv) A chemical attack or accidental release thereof,

(v) A nuclear attack or accident; or

(vi) An attack or accidental release of radioactive materials; and

(2) Poses a high probability of any of the following:

(i) A large number of deaths in the affected population;

(ii) A large number of serious injuries or long-term disabilities in the affected population;

(ii) Widespread exposure to an infectious or toxic agent that poses a significant risk of
substantial harm to a large number of people in the affected population;


(iv) International exposure to an infectious or toxic agent that poses a significant risk to the
health of citizens of other countries; or

(v) Trade and travel restrictions; and

(f) Stockpiling refers to an inventory of health commodities and materials or those physical
reserve of definite quantities of commodities or materials that are stored in government
warehouses or on government-owned properties that are intended for all essential health uses in
times of emergencies.

SEC. 4. Creation of a Health Procurement and Stockpiling Bureau. - There is hereby
created a body under the Department of Health (DOH) to be known as the Health Procurement
and Stockpiling Bureau, hereinafter referred to as the Bureau. It shall serve as the principal
agency mandated to undertake a transparent, fair, proactive, and innovative procurement service
for the DOH and to stockpile, conserve, and facilitate the release of adequate amounts of
potentially life-saving pharmaceuticals, vaccines, devices, and materials in times of public health
emergencies

SEC. 5. Organization.- The Bureau shall absorb the Procurement Service and Logistics
Management Division of the DOH. The Secretary of Health shall determine the organizational
structure and staffing modifications of the Bureau subject to the approval of the Department of
Budget and Management (DBM) in accordance with the existing civil service laws, rules and
regulations.

The DOH shall ensure an effective and efficient monitoring system for the proper
implementation of the procurement and stockpiling of drugs and medicines, vaccines, devices
and materials.

SEC. 6. Functions and Responsibilities. - The Bureau shall perform the following
functions and responsibilities:

(a) Formulate plans, policies, and programs on procurement management;

(b) Undertake the procurement process in accordance with the Government Procurement
Reform Act;

(c) Advise the Secretary of Health on matters pertaining to the procurement of goods and
services, infrastructure and consultancy services;

(d) Manage the Bureau's response activities during a public health emergency;
(e) Conduct procurement monitoring visits to DOH field offices;
(f) Provide technical assistance to DOH field offices on procurement matters;

(g) Identify, in consultation with appropriate agencies, strategic and critical drugs and
medicines, vaccines, devices, and materials needed for public -health emergencies that have the
distinct capability of being stockpiled in strategic and secure areas of the country;

(h) Maintain a buffer supply of strategic and critical drugs, medicines, vaccines, devices,
and materials to ensure the availability of these items;

(i) Facilitate the provision of potentially life-saving pharmaceuticals, vaccines, devices, and
materials in times of public health emergencies;

()) Act as supply-chain manager to ensure the rotation and replenishment of stocks, and a
steady, available, fresh and adequate supply of drugs and medicines, vaccines, devices, and
materials, which are essential in responding to public health emergencies;

(k) Acquire, release, and properly dispose drugs and medicines, vaccines, devices, and
materials, as directed by the Secretary of Health;

(|) Require all suppliers to monitor their stocks and production capacity and notify possible
supply disruptions at least six (6) months in advance;

(m) Conduct regular analysis and communicate any impending shortage ahead oftime;

(n) Facilitate the creation of a conducive environment to encourage pharmaceutical and
device self-sufficiency for medical supplies needed by the country by forging public-private


collaboration with institutions, sectors and the industry, which could bolster government efforts to
achieve pharmaceutical and device seif-sufficiency;

(0) Make an in-depth study on drugs and medicines, vaccines, devices, and materials to
avoid supply shortage in the country,

(p) Maintain a publicly accessible inventory database of the available commodities and
stocks of all items included in the proposed stockpile, including the expiration dates of relevant
stocks and their purchase prices;

(q) Spearhead the crafting of a multi-sector National Drug and Device Security Program
geared towards the country’s self-reliance in producing drugs and medicines, vaccines, devices,
and materials; and

(r) Ensure adequate provision of the appropriate storage and containment facilities in
strategic areas of the country that properly comply with requirements for room temperature and
humidity, refrigeration and non-exposure to heat, sunlight, rain and moisture

SEC. 7. Sources. - Consistent with the country's obligations under international treaties
andagreements, drugs and medicines, vaccines, devices, and materials may be obtained from
domesticor foreign sources and the procurement thereof shall be open to all eligible
suppliers, manufacturers and distributors. However, in the interest of availability, efficiency, and
timelydelivery of drugs and medicines, vaccines, devices, and materials, the Bureau shall
encourage thedevelopment of domestic sources to ensure steady, available and adequate supply
of such drugsand medicines, vaccines, devices, and materials that are essential in responding to
public healthemergencies, and in such manner as may be allowed by law, to include countertrade
and industrialcooperation to augment stockpiling and availability of critical materials by

(a) Purchasing, or making a commitment to purchase, either directly or
throughcountertrade, strategic and critical drugs and medicines, vaccines, devices, and materials
ofdomestic origin when such are needed for the stockpile;

(b) Contracting with domestic facilities, or making a commitment to contract with
domesticfacilities, for the processing or refining of strategic and critical drugs and medicines,
vaccines,devices, and materials in the stockpile when processing or refining is necessary to
convert suchinto a form more suitable for storage and subsequent disposition;

(c) Identifying existing domestic facilities and domestically produced strategic and
criticaldrugs and medicines, vaccines, devices, and materials to meet the requirements of public
health and essential civilian industries in times of public health emergency when existing
domestic sources of supply are either insufficient or vulnerable to single points of failure; and

(4) Contracting with domestic facilities to recycle strategic and critical devices
andmaterials, thereby increasing domestic supplies when such devices and materials would
otherwisebe insufficient to meet public health needs.

SEC. 8. Industrial Collaboration Program. - The DOH shall implement an
IndustrialCollaboration Program wherein it shall maintain and develop institutional linkages or
partnershipswith government and nongovernment institutions, including the DBM, Department of
National Defense, Department of the Interior and Local Government, Department of Social
Welfare andDevelopment, Department of Finance, Department of Trade and Industry, National
Disaster RiskReduction and Management Council, FDA, Bureau of Customs, Philippine Council
for HealthResearch and Development, Philippine International Trading Corporation,
GovernmentProcurement Policy Board, the Price Negotiation Board as provided under Section
28(b) ofRepublic Act No. 11223, otherwise known as the “Universal Health Care Act", Worid
Health Organization, Philippine Red Cross, and other pertinent institutions, concerning the
Procurement, management, distribution, and utilization of drugs and medicines, vaccines,
devices, and materials in the stockpile.

SEC, 9, Establishment of Medical Stockpiling Fund and Tax Exemptions.
Alldonations, contributions, grants, bequests, or gifts, in cash or in kind, received from
varioussources, shall be placed into a fund, to be known as the Medical Stockpiling Fund. This
Fund shallbe expended to support the National Drug and Device Security Program in accordance
withexisting budgeting, accounting and auditing rules and regulations.

The DOH may solicit and receive grants, bequests, endowments, donations
andcontributions which shall form part of the Fund. Said grants, bequests, endowments,


donations and contributions used actually, directly and exclusively for the purpose of the Fund
shall be exempt from donor's tax and the same considered as allowable deduction from gross
income for purposes of computing the taxable income of the donor, in accordance with Section 34
(H)(2) (a) of the National Internal Revenue Code of 1997, as amended, Likewise, fund raising
activities may be conducted by the DOH and the proceeds of which shall accrue to the Fund and
shall be exempt from any and all taxes.

Receipts from donations, whether in cash or in kind, shall be accounted for by the DOH in
accordance with accounting and auditing rules and regulations. The receipts from cash donations
and proceeds from the sale of donated commodities shall be deposited with the National Treasury
and recorded as a special account in the General Fund and shall be made avallable to the DOH
through a special budget pursuant to Section 35, Chapter 5, Book VI of Executive Order No. 292
The cash value of the donations shall be deemed automatically appropriated for the purpose
specified by the donor. Donations with a term not exceeding one (1) year shall be treated as trust
receipts.

The DOH shall submit the quarterly reports of all donations received, whether in cash or in
kind, and expenditures or disbursements thereon with electronic signature to the Secretary of the
DBM, through the Unified Reporting System, and to the Speaker of the House of the
Representatives, the President of the Senate of the Philippines, the Chairpersons of the House
Committee on Appropriations and the Senate Committee on Finance, and the Chairperson of the
Commission on Audit, by posting such reports on the DOH website for a period of three (3) years

The Secretary of Health shall send written notice to the said offices when reports have
been posted on its website, which shall be considered the date of submission

SEC. 10. Report to Congress. - The DOH shall submit an annual report to the Congress
of the Philippines, through the Committee on Health of the House of Representatives and the
Committee on Health and Demography of the Senate, on or before February 15 of each year,
detailing its operations under this Act, which shall include information regarding

(a) Foreign and domestic purchases of stockpiled drugs and medicines, vaccines,
devices, and materials;

(b) Acquisition and disposal of stockpiled drugs and medicines, vaccines, devices, and
materials; and

(©) Such other pertinent information on the implementation of this Act.

SEC. 11. Appropriations. - The amount for the initial implementation of this Act shall be
charged against the current year's appropriation of the DOH. Thereafter, the funding of which
shall be included in the annual General Appropriations Act.

SEC. 12. Implementing Rules and Regulations. - The Secretary of Health, in
consultation with appropriate government agencies, shall promulgate the necessary rules and
regulations for the implementation of this Act within sixty (60) days from its effectivity

SEC. 13. Separability Clause. - If any provision of this Act is declared unconstitutional
orinvalid, other parts or provisions hereof not affected thereby shall continue to be in full force and
effect.

SEC. 14. Repealing Clause. - All laws, executive orders, presidential decrees,
presidential proclamations, letters of instruction, rules and regulations or part thereof which are
inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC, 15. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation.

Approved,