FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
This bill seeks to fix the maximum retail price of certain medicines and increase 
access to cheaper medicines in the country to lower the prices of medicines and 
improve the health condition of our people.' 
According to a World Health Organization study in 2004, in developed countries, 
pharmaceuticals constitutes 13 percent of total health expenditures, with two-thirds of 
drugs being publicly financed while in developing countries pharmaceutical 
expenditures consist of 30-50 percent of total health expenditures, with two-thirds of 
these drugs privately financed or paid mainly out-of-pocket. This reflects a highly 
inequitable siruation where those who are in greater need to medicine find it difficult to 
have access to essential drugs. 
In a study made by the Ateneo de Manila's Institute of Philippine Culture in 2006 
entitled "The Prices People Have to Pay for Medicines in the Philippines", it was found 
out that of the 21 medicines found in public procurement, 17 were innovator brands 
and only 4 were generics. 
Moreover, public sector patient prices are many times higher than international 
reference prices (15 and 6 times higher for innovator brands and lowest priced generics 
respectively), and patients are paying nearly three times more to purchase innovator 
brands as compared to generics. Similarly,' private sector patient prices are many times 
higher than international reference prices (17 and 6 times higher for innovator brands 
and lowest price generics, respectively), and patients are paying nearly three times 
more to purchase innovator brands as compared to generics. 
Furthermore, some standard treatments are very unaffordable to the lowest paid 
government worker. In the private sector, a month's treatment of depression with 
innovator brand Fluoxetine costs the lowest paid government worker 49 days wages, 
the treatment of a peptic ulcer costs 8.5 days wages when innovator brands are 
prescribed or dispensed, and still costs 3 days' wages if generics are used. Likewise, 
wholesale and retail mark-ups can reach 65% and 50%, respectively. 
In another study, the following were cited as reasons for the high prices of 
medicines in the country (Lim 1997): 


1. Brand loyalty of consumers (and physicians) resulting in a sort of 
a ”mol,c,polistic competition” that allows drug firms to set prices above 
the pure competitive level, partly due to the ”asymmetry of information” 
where the consumers know very little about the nature of the product and 
the variety of choices and options, while the drug manufacturers and 
intermediaries particularly the physicians and pharmacists know much 
more; 
2. Prescribing patterns of physicians who tend to indicate their 
preferred brands while patients simply follow the brand name prescribed 
without trying to find out the range of differently-priced options available 
in the market; 
3. Intensive marketing strategies on the part of pharmaceutical 
companies resulting in high expenditures on promotions and advertising, 
targeted mainly towards physicians and pharmacists; competent, fair, 
honest, effective regulation through a strengthened Bureau of Food and 
Drugs; stronger government role in procurement, production and 
distribution of drugs and pharmaceuticals; wider dissemination of 
adequate and accurate information on drugs and medicines to both 
physicians and the public; and coordination of investment and trade 
policies to achieve self-sufficiency in good quality and affordable 
pharmaceuticals. 
Unfortunately, the burden of disease is heaviest on the poor. In 2003, 24.7% of 
Filipino families or 30.4% of Filipinos are considered poor. And poverty is essentially a 
rural phenomenon - 3 out of 4 poor Filipinos or 75% reside in the rural areas. Based on 
2006 prevailing prices, at the national level, a family of five needed PhP 204 daily to buy 
their minimum basic food and non-food needs. 
Clearly, the government’s intervention is needed to address the intricate web 
that surrounds the pricing of medicines, which prejudice the very people that are in dire 
need of them, our poor. This bill aims to address such urgent concern thru timely 
legislation. 
Under this proposed measure, a List of Regulated Drugs is hereby established, 
which are subject to a maximum retail price as fixed by the Drug Prices Regulation 
Board, likewis; created under this bill. The regulated drugs include: 
all formulations indicated for treatment of chronic illnesses and life- 
threatening conditions such as, but not limited to: 
a. endocrine disorders, e.g., diabetis mellitus; 
b. gastrointestinal disorders, e.g., peptic ulcer; 
c. urologic disorders, e.g. PTB, asthma; 
d. autoimmune diseases, e.g., SLE; 
e. skin diseases, e.g., Psoriasis; 
f. neuro-psychiatric disorders 
g. other infectious diseases, e.g., HW, AIDS; and 
h. other conditions such as organ transplants and neoplasms 
formulations indicated for prevention of 
diseases, e.g., vaccines, 
immunoglobulins, anti-sera; 
anesthetic agents, and 
intravenous fluids. 


Moreuv ix, to improve access to cheaper medicines, this bill amends certain 
provisions of Republic Act No. 8293 otherwise known as the IntellectuaI Property Code 
of the Philippines in order to: 1.) Remove the requirement of another patent for new 
uses of an existing substance (already patented) to allow drug manufacturers to 
immediately copy off-patent products; 2.) Permit parallel importation and international 
exhaustion of intellectual property rights for patents. Parallel importation refers to the 
importation, without the consent of the patent holder, of a patented product that is 
marketed in another country. International exhaustion refers to the regime where the 
supply and price of: a product is moderated by competition; 3.) Pave the way for an 
'early working doctrine' to enable generic drug companies to experimenb and test 
generic versions of patented drugs before their patents expire. It will also allow them to 
produce and sell generic versions of patent'ed drugs upon their patents' expiration; and 
4.) Restructure provisions of government use by doing away with compulsory licensing 
to make it easier to respond to public health threats. 
The government must not hesitate to take bold steps to correct the inequalities in 
the access to quality health care by our people, particularly the poor. The State's policy 
to protect anci'promote the right to health of our people must not be mere lip service, 
but a concrete action that the government must undertake. 
In view of the foregoing, immediate passage of this bill is earnestly requested. 
Senator 


FOURTEENTW CONGRESS OF THE 
1 
First Regular Session 
1 
REPUBLIC OF THE PHILIPPINES 
1 
7 sE7 -4 p [> i' 
. 
"I 
S E N A T E  
SB N 
Introduced by Senator Loren Legarda 
AN ACT 
TO FIX THE MAXIMUM RETAIL PRICE OF MEDICINES UNDER CERTAIN 
CONDITIONS AND INCREASE ACCESS TO CHEAPER MEDICINES BY 
CREATING A DRUG PRICES REGULATION BOARD AND BY AMENDING 
RELEVANT PROVISIONS OF REPUBLIC ACT NO. 8293 OTHERWISE KNOWN AS 
THE INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES, AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and the House of Repvesentatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Title. -'This Act shall be known as the "Cheaper Medicines 
Act of 2007" 
SECTION 2. Declaration of Policy. - It is hereby a declared policy of the State to 
protect and promote the right to health of the people through cheaper medicines 
SECTION 3. Creation and Composition of the Drug Prices Replation Board 
(a) 
There is hereby created the Drug Prices Regulation Board, which shall be 
attached to the Department of Health and composed of the following: 
1. 
2. 
3. 
4. 
member 
5. 
Secretary of Trade and Industry as Chairman 
Secretary of Health as Vice Chairman; 
Director, Bureau of Food and Drugs as member 
Lead Convenor of the National Anti-Poverty Commission as 
A Representative from each of the following sectors as members: 
i. 
National pharmaceutical companies 
ii. 
Hospital administrations 
iii. 
Medical Profecv'nn 
iv. 
Pharmacy Profession 
v. 
Drugstores industry 
vi. 
Drug Manufacturers 
vii. 
Consumers 


Associations or councils formed by and among the members of 
each sector shall respectively nominate three (3) nominees from each 
sector within six (6) months after the effectivity of the implementing rules 
and regulations of this Act, and every three (3) years thereafter and in case 
of vacancy. The President of the Philippines shall, within thirty (30) days 
after the submission of the list of nominees, appoint the representatives 
from the submitted list. Sectoral representatives shall serve for a term of 
three (3) years without reappointment. Appointment to any vacancy for 
sector representatives shall be only for the unexpired portion of the term 
of the predecessor. 
SECTION 4. Powers of the Drug Prices Regulation Board. The Board shall have 
the following powers: 
(a) 
Power to Fix the Maximum Retail Prices of Formulations Included in 
the List of Regulated Drugs. - Upon application, due notice and hearing, 
and after proper determination, when the public interest, in particular, 
national security, nutrition, public health or public safety, as determined 
by the appropriate agency of the government, so requires, the Board shall 
have the power to fix the maximum retail price of formulations included 
in the List of Regulated Drugs as herein defined, including dosage form 
and packing, at which such formulation shall be sold to the public. The 
retail price fixed shall be effective after fifteen days from the date the List 
of Regulated-Drugs and the maximum retail price so fixed has been 
published in two newspapers of general circulation, at the expense of the 
Board. 
No retailer shall sell a formulation at a retail price exceeding the 
maximum retail price fixed h.: the Board; Provided that, until the maximum 
retail price of a formulation is fixed by the Board, the prevailing retail 
price prior to the effectivity of this Act shall be controlling. 
For purposes of this Act, formulations include single and multi- 
ingredient formulations included in the List of Regulated Drugs and sold 
under their generic and brand names. 
Power to Identify Formulations in the List of Regulated Drugs. -Upon 
application and after proper determination, when the public interest, in 
particular, national security, nutrition, public health or public safety, as 
determined by the appropriate agency of the government, so requires, the 
Board may order the inclusion or exclusion in the List of Regulated Drugs 
of any formulation. The inclusion or exclusion of a formulation from the 
List of Regulated Drugs shall be effective after fifteen days from the date 
the List has been published in two newspapers of general circulation, at 
the expense of the Board. 
(b) 
SECTION 5. The List of Regulated Drugs. - The List of Regulated Drugs shall 
include: 
(5) 
all formulations indicated for treatment of chronic illnesses and life- 
threatening conditions such as, but not limited to: 


a. endocrine disorders, e.g., diabetis mellitus; 
h. gastrointestinal disorders, e.g., peptic ulcer; 
c. urologic disorders, e.g. PTB, asthma; 
d. autoimmune diseases, e.g., SLE; 
e. skin diseases, e.g., Psoriasis; 
f. neuro-psychiatric disorders 
g. other infectious diseases, e.g., HIV, AIDS; and 
h. other conditions such as organ transplants and neoplasms 
(6) 
formulations indicated for prevention of 
diseases, e.g., vaccines, 
immunoglobulins, anti-sera; 
(7) 
anesthetic agents, and 
(8) 
intravenous fluids. 
SECTION 6. Display of Prices Fixed by the Board for FomzuZations. - a) All 
government health agencies and their personnel as well as other government agencies, 
aside from c2k.r.g generic terminology or generic names in all transactions related to 
purchasing, prescribing, dispensing and administering of drugs and medicines shall, 
pursuant to Republic Act No. 6675 or the Generics Act of 1998, indicate whether the 
formulation prescribed is included in the List of Regulated Drugs; 
(6) AI1 medical, dental and veterinary practitioners, including private 
practitioners, shall indickin their prescriptions that the formulation is included in the 
List of of Regulated Drugs if it is so included; 
(c) Drug outlets, including drugstores, hospital and non-hospital pharmacies and 
non-traditional outlets such as supermarkets and stores, shall post in conspicuous 
places in their establishments the List u;' Zegulated Drugs and their corresponding 
maximum retail price; and 
(d) Within fifteen (15) days after the publication of the List of Regulated Drugs 
and their corresponding maximum retail price, every manufacturer or importer shall 
issue a price list consistent with the maximum retail price set by the Board, to 
distributors, wholesalers and retailers. 
SECTION 7. Section 26 of Republic Act No. 8293 is hereby amended to read as 
follows: 
"Sec. 26. Inventive Step. - 26.1. An invention involves an inventive 
step if, having regard to prior art, it is not obvious to a person skilled in 
the art at the time of the filing date or priority date of the application 
claiming the invention. 
"26.2. THERE IS NO INVENTIVE STEP IF THE INVENTION 
RESULTS FROM THE MERE fiiSC0VERY OF A NEW FORM OR 
NEW PROPERTY OF A KNOWN SUBSTANCE WHICH DOES NOT 
RESULT IN THE ENHANCEMENT OF THE KNOWN EFFICACY OF 
THAT SUBSTANCE, OR, THE MERE DISCOVERY OF ANY NEW USE 
FOR A KNOWN SUBSTANCE OR A KNOWN PROCESS UNLESS 


SUCH KNOWN PROCESS RESULrS IN A NEW PRODUCT THAT 
EMPLOYS AT LEAST ONE NEW REACTANT." 
SECTION 8. . Section 72 of Republic Act No. 8293 is hereby amended to read as 
follows: 
"Sec. 72. Limitations of Patent Rights. - The owner of a patent has 
no right to prevent third parties from performing, without his 
authorization, the acts referred to in section 71 hereof in the following 
circumstances: 
"72.1. Using a patented product which has been put on the market 
in the Philippines by the owner of the product, or with his express 
consent, insofar as such use is performed after that product has been so 
put on the said market:.PROHDED, THAT, WITH REGARD TO 
DRUGS OR MEDICINES, THE LIMITATION ON PATENT RIGHTS 
TO THE USE, SALE, OFFERING FOR SALE OR IMPORTATION OF 
THE PRODUCT SHALL APPLY AFTER A DRUG OR MEDICINE HAS 
BEEN INTRODUCED ANYWHEld IN THE WORLD BY THE PATENT 
OWNER, OR BY ANY PARTY AUTHORIZED TO USE THE 
INVENTION. 
"72.2. Where the act is done privately and on a non-commercial 
scale or for a non-commercial purpose: provided, that it does not 
significantly prejudice the economic interests of the owner of the patent; 
"72.3. Where the act consists of making or using exclusively for [the 
purpose of experiments that relate to the subject matter of the patented 
invention;] EXPERIMENTAL USE OF THE INVENTION FOR 
SCIENTIFIC PURPOSES OR EDUCATIONAL PURPOSES AND SUCH 
OTHER ACTIVITIES DIRECTLY RELATED TO SUCH SCIENTIFIC 
OR EDUCATIONAL EXPERIMENTAL USE; 
"72.4. WHERE THE ACT INCLUDES TESTING, USING, 
MAKING OR SELLING THE INVENTION INCLUDING ANY DATA 
RELATED THERETO, SOLELY FOR PURPOSES REASONABLY 
RELATED TO THE DEVELGi'dENT AND SUBMISSION OF 
INFORMATION 
AND 
ISSUANCE 
OF 
APPROVALS 
BY 
GOVERNMENT REGULATORY AGENCIES REQUIRED UNDER 
ANY LAW OF THE PHILIPPINES THAT REGULATES THE 
MANUFACTURE, CONSTRUCTION, USE OR SALE OF ANY 
PRODUCT PROVIDED, THAT IN ORDER TO PROTECT THE DATA 
SUBMITTED BY THE ORIGINAL PATENT HOLDER FROM UNFAIR 
COMMPRCIAL USE PROVIDED IN ARTICLE 39.3 OF THE TRIPS 
AGREEMENT, THE INTELLECTUAL PROPERTY OFFICE (IPO), IN 
CONSULTATION WITH THE APPROPRIATE GOVERNMENT 
AGENCIES, SHALL ISSUE THE APPROPRIATE RULES AND 
REGULATIONS NECESSARY THEREIN NOT LATER THAN ONE 
HUNDRED TWENTY (120) DAYS AFTER ENACTMENT OF THIS 
LAW: 
"[72.4] 72.5. Where the act consists of the preparation for individual 
cases, in a pharmacy or by a medical professional, of a medicine in 


accordance with a medical prescription or acts concerning the medicine so 
prepared; 
"[72.5] 72.6. Where the invention is used in any ship, vessel, 
aircraft, or land vehicle of any other country entering the territory of the 
Philippines temporarily or accidentally: Provided, That such invention is 
used wchisively for the needs of the ship, vessel, aircraft, or land vehicle 
and not used for the manufacturing of anything to be sold within the 
Philippines. (Secs. 38 and 39, R.A. No. 165a)" 
SECTION 9. Section 74 of Republic Act no. 8293 is hereby amended to read as 
follows: 
"Sec. 74. Use of Invention by Government. - 74.1. a government agency or 
third person authorized by the government may exploit the invention 
even without agreement of the patent owner where: 
(a) 
the public interest, in particifc, national security, nutrition, health 
or the development of other sectors, as determined by the 
appropriate agency of the government, so requires; or 
a judicial or administrative body has determined that the manner of 
exploitation, by the owner of the patent or his license, is anti- 
competitive; or 
(b) 
(C) 
THERE IS PUBLIC NON-COMMERCIAL USE OF THE PATENT 
BY THE PATENTEE, WITHOUT SATISFACTORY REASON. 
"74.2. UNLESS OTHERWISE PROVIDED HEREIN, [TI the use by the 
government, or third person authorized by the government shall be 
subject, [mutatis mutundis, to the conditions set forth in sections 95 to 97 
and ZOO to 102. (Sec. 41, R.A. no. 165a)l TO THE FOLLOWING 
PROVISIONS: 
(A) 
IN SITUATIONS OF NATIONAL EMERGENCY OR OTHER 
CIRCUMSTANCES OF CYTXEME URGENCY, THE RIGHT 
HOLDER SHALL BE NOTIFIED AS SOON AS REASONABLY 
PRACTICABLE; 
(B) 
IN THE CASE OF PUBLIC NON-COMMERCIAL USE, WHERE 
THE 
GOVERNMENT 
OR 
CONTRACTOR, 
WITHOUT 
MAKING 
A 
PATENT 
SEARCH, 
KNOWS 
OR 
HAS 
DEMONSTRABLE 
GROUNDS 
TO 
KNOW 
THAT 
A 
VALID PATENT IS OR WILL BE USED BY OR FOR THE 
GOVERNMENT, 
THE 
RIGHT 
HOLDER 
SHALL 
BE 
INFORMED PROMPTLY; 
(C) 
THE SCOPE AND DURATION OF SUCH USE SHALL BE 
LIMITED TO THE PURPOSE FOR WHICH IT WAS 
TECHNOLOGY, 
.SHALL 
ONLY 
BE 
FOR 
PUBLIC 
NONCOMMERCIAL USE OR TO REMEDY A PRACTICE 
AUTHORIZED, AND IN THE CASE OF SEMI-CONDUCTOR 


DETERMINED AFTER JUDICIAL OR ADMINISTRATIVE 
PROCESS TO BE ANTI-COMPETITIVE; 
(D) 
THE RIGHT HOLDER 
SHALL 
BE 
PAID ADEQUATE 
REMUNERATION IN THE CIRCUMSTANCES OF EACH 
CASE, TAKING INTO ACCOUNT THE ECONOMIC VALUE 
OF THE AUTHORIZATION; THE LEGAL VALIDITY OF ANY 
DECISION RELATING TO THE AUTHORIZATION OF SUCH 
USE SHALL BE SUBJECT TO JUDICIAL REVIEW AND SUCH 
USE SHALL BE NON-EXCLUSIVE; 
(E) 
THE 
USE 
OR 
OTHER 
EXPLOITATION 
BY 
THE 
GOVERNMENT OR THIRD PERSON AUTHORIZED BY THE 
GOVERNMENT OF DRUGS OR MEDICINES UNDER THIS 
SECTION SHALL 
BE 
SUBJECT TO THE EXCLUSIVE 
DETERMINATION OF THE PRESIDENT OF THE REPUBLIC 
OF THE PHILIPPINES AND SHALL BE IMMEDIATELY 
EXECUTORY PROVIDED, THAT NO COURT, EXCEPT THE 
S’UPREME COURT OF THE PHILIPPINES, SHALL 
ISSUE 
ANY 
TEMPORARY 
RESTRAINING 
ORDER 
OR 
PRELIMINARY 
INJUNCTION 
OR 
PRELIMINARY 
MANDATORY 
INJUNCTION THAT WILL PREVENT ITS 
IMMEDIATE 
EXECUTION. 
THE 
OFFICE 
OF 
THE 
PRESIDENT, 
IN 
CONSULTATION 
WITH 
THE 
APPROPRIATE GOVERNMENT AGENCIES, SHALL ISSUE 
THE APPROPRIATE 
IMPLEMENTING 
RULES 
AND 
REGULATIONS FOR THE EXERCISE OF THIS AUTHORITY 
WITHIN ONE HUNDRED TWENTY (120) DAYS AFTER 
ENACTMENT OF THIS LAW. ALL CASES ARISING FROM 
THE IMPLEMENTATION Cir 
THIS PROVISION SHALL BE 
COGNIZABLE 
BY 
COURTS 
WITH 
APPROPRIATE 
JURISDICTION PROVIDED BY LAW.” 
SECTION 10. Section 159 of Republic Act no. 8293 is hereby amended to read as 
follows: 
ll” LCC. 159. 
Limitations to 
Actions 
for 
Infringement. - 
Notwithstanding any other provision of this Act, the remedies given to 
the owner of a right infringed under this Act shall be limited as follows: 
“259.1. x x x 
”159.2. x x x 
“159.3. x x x 
“159.4 THERE SHALL BE, NO INFRINGEMENT OF TRADEMARKS 
OR TRADE NAMES OF IMPORTED OR SOLD DRUGS OR 
MEDICINES ALLOWED UNDER SECTION 72.1: PROVIDED, THAT 
SAID DRUGS OR MEDICINES BEAR THE REGISTERED MARKS 
THAT HAVE NOT BEEN TAMKKED, MODIFIED, OR INFRINGED 
UPON AS DEFINED UNDER SECTION 155 OF THIS CODE.” 
SECTION 11. Prohibited Acts. Any person who shall violate Section 6 of this Act 
shall suffer the penalty graduated hereunder, viz: 


a. 
for the first conviction, the penalty of reprimand which shall be officially 
recorded in the appropriate books of the Professional Regulation 
Commission shall be imposed 
for the second conviction, the penalty of fine in the amount of not less 
than ten thousand pesos (Pl0,OOO.OO) but not exceeding fifty thousand 
pesos (P50,OOO.OO) at the discretion of the court 
b. 
C. 
for the third conviction, the penalty of fine in the amount of not less than 
fifty thousand pesos (P50,OOO.OO) but not exceeding one hundred 
thousand 
pesos 
(PlO0,OOO.OO) 
and 
suspension 
of 
his 
license 
to practice his profession for thirty (30) days at the discretion of the court 
for the fourth and subsequent convictions, the penalty of fine of not less 
than one hundred thousand pesos (P100,000.00) and suspension of his 
license to practice his profession for one year or longer at the discretion of 
the court. 
d. 
Any juridical person who violates Section 4(a), 6(c), or 6(d) shall suffer the 
penalty of a fine of not less than fifty thousand pesos (P50,OOO.OO) nor more than one 
hundred thousand pesos ~(PlO0,OOO.OO) and suspension or revocation of license to 
operate such drug establishment or drug outlet at the discretion of the Court 
Provided,That its officers directly tesponsible for the violation shall suffer the penalty of 
fine and suspension or revocation of license to practice profession, if applicable, and by 
imprisonment of not less than six (6) months nor more than one (1) year or’both fine 
and imprisonment at the discretion of th!? Court and Provided, further, That if the 
guilty party is an alien, he shall be ipsofncto deported after service of sentence without 
need of further proceedings. 
The Secretary of Health shall have the authority to impose administrative 
sanctions such as suspension or cancellation of license to operate or recommend 
suspension of license to practice profession to the Professional Regulation Commission 
as the case mav be for the violation of this Act. 
SECTION 12. Appropriations. - For the initial implementation of this Act, the 
amount of Twenty-five million pesos (P25,000,000.00) shall be taken from the current 
General Appropriations Act. Thereafter, such sum as may be necessary for its continued 
implementation shall be included in the annual General Appropriations Act. 
SECTION 13, Implementing Rules and Regulations. The Department of Trade 
and Industry, in consultation with the Department of Health and Intellectual Property 
Office, shall promulgate the implementing r,l!es and regulations within ninety (90) days 
from the effectivity of this Act. 
SECTION. 14. Separability CIause. - If any part of this Act shall be held to be 
unconstitutional or invalid, other parts or provisions hereof which are not affected 
thereby shall continue to be in full force and effect. 


SECTION 15. Repealing Clause. - A11 laws, presidential decrees, executive 
orders, rules and regulations which are contrary to the provision of this Act are hereby 
repealed, amended and modified accordingly. 
SECTION 16. Eflectivity. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation, whichever comes first. 
Approved,