,' 
THIRTEENTH CONGRESS OF THE REPUBLIC 
1 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
S E N A T E  
S.' No. 1095 
Introduced by Senator Madrigal 
EXPLANATORY NOTE 
One of the major stumbling blocks in the effective implementation of RA 6675 
(Generics Law ofZ988) is the long period of time that drug manufacturers have to wait 
for the patent to expire before it is allowed to manufacture low-priced drugs and 
pharmaceutical products. RA 8293, also known as the Intellectual Property Code of the 
Philippines, sets the term of a patent in twenty (20) years from the filing of the 
application in the Philippines. 
This issue about patents particularly the monopoly of patents and brand names 
by multinational drug companies (MNCs) is one of the causes for the continuous price 
increases of drugs. Because of this, only MNCs can exclusively distribute their products 
and dictate prices, thereby enabling them to also monopolize the market. 
Even off-patent drugs are comparatively high-priced because MNCs do not 
license local drug companies to undertake domestic production. Furthermore, most off- 
patent drugs are imported and sold domestically by local subsidiaries of these 
companies. 
These MNCs are also notorious for price-fixing. It can be reme'mbered that in 
1979, the U.S. Supreme Court held that six transnational companies namely Pfizer, 
American Cyanamid, Bristol Myers, Squibb and Upjohn and Olin were guilty of having 
conspired to increase the price of tetracycline being sold in the Philippines, India and 
Iran. 
With an estimated hold of 68% of the market to a high of 75%-90% as the 
remaining 32% is shared by both foreign and local players of the industry, it is easy to 
conceive how they effectively control drug prices. 
It is estimated that the hold of multinationals in the P50-60 million drug industry 
is about 75%. 
Filipino-owned and controlled companies manufacturing and 
distributing mainly off-patent, generic drug comprise a mere 12%-15% of the total 
market. 
It is for this reason that a policy of greater State intervention in health and 
pharmaceutical industry must be installed and vigorously pursued so that the interests 
and welfare oi the people would remain supreme. 
Thus, apart from this proposed measure, two intertwined bills along this policy 
line and framework were also filed by this humble representation. This bill seeks to 


shorten the patent period of drugs and other pharmaceutical products and thereafter, 
institutionalize compulsory licensing. 
This proposed measure is envisioned to be an effective tool of the government in 
controlling the prevailing price schemes of drug companies and in supporting the 
fledgling local drug industry. 
In view of the foregoing, the immediate passage of this measure is earnestly 
sought. 
Senator 
re&ti/drafts 
pntetitsbill.doc 


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OFFEE OF ?WE ~~~~~~~A~~ 
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OF THE REPUBLIC 
Introduced by Senator Madrigal 
AN ACT 
AMENDING 
ACT NO. 8293, OTHERWISE KNOWN AS THE 
CODE OF THE PHILIPPINES, TO LOWER THE 
PRODUCTS AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Patents of Pharmaceutical Products. - Section 54 of R.A. 8293, 
otherwise known as the Intellectual Property Code of the Philippines, is hereby amended to 
be read as follows: 
"Sec. 54. Term ofpatent. - The term of patent shall be twenty (20) 
years from the filing date of application, EXCEPT FOR DRUG AND 
PHARMACEUTICAL PRODUCTS WHICH SHALL BE TEN (10) 
YEARS FROM THE FILING DATE OF APPLICATION, BE IT IN THE 
PHILIPPINES OR ELSEWHERE IN THE WORLD." 
SEC. 2. 
Compulsory Licensing. - Sections 93 and 95 of R.A. 8293 are hereby 
amended to be read as follows: 
"Sec. 93. Groundsfor Compulsory Licensing. - The Director of Legal 
Affairs OR THE SECRETARY OF THE DEPARTMENT OF HEALTH, 
IN CASES OF DRUG OR PHARMACEUTICAL PRODUCTS, may grant 
a license to exploit a patented invention, even without the agreement of 
the patent owner, in favor of any person who has shown his capability to 
exploit the invention, under any of the following circumstances: 
X 
X 
X 
X 
93.2. Where the public interest, in particular, 
national security, nutrition, health or the development of 
other vital sectors of the national economy WHICH 
SHALL INCLUDE THE NATIONAL DRUG AND 
PHARMACEUTICAL INDUSTRY as determined by 


the appropriate agency of the Government, so requires 
[or] ; 
IN PARTICULAR, PATENTED DRUGS AND 
PHARMACEUTICAL PRODUCTS SHALL NOW BE 
SUBJECT TO COMPULSORY LICENSING. 
Sec. 95. Requirement to Obtain a License on Reasonable Commercial Terms. - 
95.1. The license will only be granted after the petitioner 
has made efforts to obtain authorization from the patent owner 
on reasonable commercial terms and conditions but such 
efforts have not been successful within a reasonable period of 
time. 
95.2. The requirement under Subsection 95.1 shall not 
apply in the following cases: 
(a) 
xxx 
(b) 
xxx 
(d) 
IN CASES OF PRODUCTION OF DRUGS 
AND PHARMACEUTICAL PRODUCTS AS CARRIED OUT 
BY THE STATE THROUGH ACCREDITED LOCAL DRUG 
ESTABLISHMENTS.” 
(c) 
xxx 
SEC. 3. Concurrence of Congress in the Extension of Patents. - No extension of 
patent of drugs shall be allowed in the Philippines once their approved patent life has 
expired in the Philippines under any condition or circumstance without the concurrence 
Congress. 
SEC. 4. 
Implementing Agency. - The Department of Health (DOH), in 
coordination with the Department of Trade and Industry (DTI), shall be the main body 
to enforce this Act. It shall, likewise, promulgate the rules and regulations necessary to 
implement the provisions of this Act within sixty (60) days from its passage. 
SEC. 5. Separability Clause. - If any provision of this Act is declared invhid, the 
remainder or any provisions hereof not affected thereby shall remain in full force and 
effect. 
SEC. 6. 
Repealing Clause. - The provisions of any law, executive orders, 
presidential decrees or other issuances inconsistent with this Act are hereby repealed or 
modified accordingly. 


SEC. 7. EfSectivify. - This Act shall take effect fifteen (15) days after its complete 
publication in at least two (2) national newspapers of general circulation. 
Approved,