Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILLNo. 6995

Introduced by: Hon. Angelina “Helen” D.L. Tan, M.D.

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 countries, as of 2018, have the capacities required under the
International Health Regulations (THR) 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 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 is earnestly being sought.

CfGin,

ANGELINA “HELEN” D.L. TAN, M.D.
4th District, Quezon



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. OBE

Introduced by: Hon. Angelina “Helen” D.L. Tan, M.D.

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 I. Short Title. — This Act shall be known as the “Health Procurement and Stockpiling Act”.

SEC. 2. Declaration of Policy. — It is the policy of the 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, it 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 confront the devastating consequences of public health
emergencies.

SEC. 3. Definition of Terms. ~

(a) Countertrade refers to a supplemental trade tool in connection with transactions involving the
importation or procurement of forcign capital equipment, machinery, products, goods and services of at
least USS1 million and above or its foreign currency equivalent;

(©) Device means instruments, apparatus, or contrivances, including their components, parts, and
accessories, intended (1) for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in
man or animals; or (2) to affect the structure or any function of the body of man or animals;

(©) Drugs and medicines refer to any chemical compound or biological substance, other than food,
intended for use in the treatment, prevention or diagnosis of disease in humans or animals, including but
not limited to

(1) any article recognized in the official United States Pharmacopoeia-National Formulary (USP-
NF), official Homeopathic Pharmacopoeia of the United States, Philippine Pharmacopoeia, Philippine
‘National Drug Formulary, British Pharmacopoeia, European Pharmacopoeia, Japanese Pharmacopoeia,
Indian Pharmacopoeia, any national compendium or any 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 any function of the human body
or animals;

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

(5) 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;

(iii) 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), (ii), (iii), 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;

that:

(©) Public health emergency refers to an occurrence or imminent threat of an illness or health condition

(1) Is caused by any of the following:
(@ Bio terrorism;

(i) Appearance of a novel or previously controlled or eradicated infectious agent or biological toxin;
(iii) A natural disaster;

(iv) A chemical attack or accidental release;

(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;

(iii) Widespread exposure to an infectious or toxic agent that poses a significant risk of substantial harm
toa 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;
(8) 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 to be known as the Health Procurement and Stockpiling Bureau (HPSB),
hereinafter referred to as the Bureau. It shall serve as the principal agency mandated to undertake a transparent,
fair, proactive, 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 existing Procurement Service of the DOH. It shall be

headed by a Director and shall be provided with adequate personnel complement and all necessary material means
and resources.

Subject to the approval of the Department of Budget and Management (DBM), the Secretary of Health

shall determine the organizational structure of the Bureau and create new divisions or units as may be necessary


and appoint officers and employees in accordance with the civil service laws, rules and regulations,

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

(a) Formulates plans/policies/programs on procurement management;

(©) Undertake the procurement process to provide the logistical requirements;

(c) Conduct procurement monitoring visits to DOH field offices;

(@ Provide technical assistance to DOH field offices on procurement matters;

(©) 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;

(O Serve as a national supplement of drugs and medicines, vaccines, devices, and materials to state
supplies acting as a stopgap buffer when the immediate supply of adequate amounts of drugs and medicines,
vaccines, devices, and materials may not be immediately available;

(g) Ensure rotation, replenishment, and freshness of stocks and that there exists at all times steady,
available and adequate supply of drugs and medicines, vaccines, devices, and materials, which are essential in

responding to public health emergencies;

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

(i) Act as supply-chain manager in the stockpiling of strategic and critical drugs and medicines, vaccines,
devices, and materials;

(i) Acquire and release drugs and medicines, vaccines, devices, and materials, as directed by the Secretary
of Health, in the interest of the public in response or in preparation of any conceived public health emergency.

(k) Dispose drugs and medicines, vaccines, devices, and materials as required for purposes of addressing
public health emergencies;

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

(m) Regular analysis and communication of impending shortages ahead of time;

(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 self-
sufficiency;

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

(p) Spearhead the crafting of a multi-sector national drug and device security program towards the
country’s self-reliance in producing drugs and medicines, vaccines, devices, and materials.

SEC. 7. Sources. ~ Consistent with the country’s obligations under international treaties and agreements,
drugs and medicines, vaccines, devices, and materials may be obtained from domestic or foreign sources and the
procurement thereof shall be open to all eligible suppliers, manufacturers and distributors. However, in the
interest of availability, efficiency, and timely delivery of drugs and medicines, vaccines, devices, and materials,
the Bureau shall encourage the development of domestic sources to ensure steady, available and adequate supply
of such drugs and medicines, vaccines, devices, and materials that are essential in responding to public health
‘emergencies, and in such manner as may be allowed by law, to include countertrade and industrial cooperation to
augment stockpiling and availability of critical materials by:


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

(b) Contracting with domestic facilities, or making a commitment to contract with domestic facilities, 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 such into a form more suitable for storage and
subsequent disposition;

(©) Identifying existing domestic facilities and domestically produced strategic and critical drugs and
medicines, vaccines, devices, and materials to mect 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 and materials, thereby
increasing domestic supplies when such devices and materials would otherwise be insufficient to support public
health needs.

SEC. 8. Institutional Linkages. - The DOH shall maintain and develop institutional linkages or
partnerships with government and non-government institutions including, but not limited to, the Department of
National Defense, Department of Interior and Local Government, Department of Social Welfare and
Development, Department of Finance, Department of Trade and Industry, National Disaster Risk Reduction and
Management Council, Food and Drug Administration, Bureau of Customs, Philippine Council for Health
Research and Development, Philippine Intemational Trading Corporation, Government Procurement Policy
Board, the price negotiation board as provided under Section 28 (b) of Republic Act No. 11223, otherwise known
as the “Universal Health Care Act”, World Health Organization, Philippine Red Cross, and other pertinent
institutions, concerning the procurement, distribution and utilization of drugs and medicines, vaccines, devices,
and materials in the stockpile.

SEC. 9. Establishment of Medical Stockpiling Fund. -There is hereby established a Medical Stockpiling
Fund to support the national drug and device security program. The DOH shall manage the Fund in accordance
with existing budgeting, accounting and auditing rules and regulations and shall make a quarterly report to the
Office of the President and Congress on the disbursement of the Fund.

The DOH may solicit and receive donations which shall form part of the Fund and such donations shall
be exempt from income and or donor’s tax and all other taxes, fees and charges imposed by the government.
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 sale of
donated commodities shall be deposited with the National Treasury and recorded as a special account in the
General Fund and shall be available 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 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
House Committee on Appropriations, the Senate Committee on Finance and 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 said 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:

(a) information with respect to foreign and domestic purchases of stockpiled drugs and medicines,
vaccines, devices, and materials;


mn and disposal of stockpiled drugs and medicines, vaccines,

(b) information with respect to the acqui
devices, and materials;

(©) such other pertinent information regarding the implementation of this Act.

SEC. 11. Appropriations. - The amount necessary to carry out the provisions of this Act shall be included
in the General Appropriations Act of the year following its enactment into law and thereafter.

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

SEC. 14, Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official
Gazette or in two (2) newspapers of general circulation in the Philippines.

Approved,