Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Cheap Medicines

Posted by butalidnl on 26 January 2008

In the Philippines, I noticed that the price of medicine was quite a major factor for people. Some people had health insurance which covers doctors consultations and tests, but not medicines. This meant that you could find out what’s wrong with you, but it would mean that you need to pay yourself for the medicines to cure it. This was a good enough reason for some to not find out what was wrong with them – after all, they can’t afford the medicines anyway.

This is a long way from what I am used to here in the Netherlands. Here, we aren’t aware of the price of medicines. The doctor prescribes them, the drugstore gives them to me, and I take them, and the insurance companies pays the bills. I don’t even get to know what the medicines cost. Once, I asked why the drugstore gave me something else than what the doctor prescribed; and they explained that the one they gave was generic and thus the same as the prescribed medicine but cheaper. Of course, it would be the health insurance company which would notice that it was cheaper – and I suppose it was due to the pressure of these companies that the drugstores shift to the generic versions of prescribed medicines.

The Cheap Medicines Bill that is now being discussed in Congress is an attempt to address the problem of having too expensive medicines. The Senate and the House of Representatives have different versions which still need to be reconciled. The bill would give the government the right to import patented medicines which are cheaper in another country, and require doctors to offer the cheaper generic versions of medicines.

Already, the pharmaceutical lobby is working double time to sabotage this law. Some doctors are threatening to go on “strike” over the issue – in the sense that they will refuse to prescribe generic medicines. The doctors raise all sorts of questions re the quality of the generic medicines.

The issue boils down basically to the pharmaceutical industry’s right to charge whatever they like for their patented medicines, as opposed to the government’s duty to ensure that health care is affordable and available to the people. The pharmaceutical industry is banking on their “intellectual property” rights as shown by the patent they hold for certain drugs. But in their implementation of these rights, they seek to maximize profits by having different prices per country (and the Philippines ends up with some of the highest medicine prices, simply because the pharmaceutical companies can get away with it).

But this goes beyond what the patent entitles the pharmaceutical companies to do. A patent is simply the exclusive right to produce and sell the medicine for a given number of years. But it shouldn’t prevent people from buying the medicine where it is cheaper; which is what happens with parallel importation. Under the principle of the “International Exhaustion Regime”(which is adopted in the Cheap Medicine Bill), if the holder of the patent has placed the product on the market, the Intellectual Property protection of this product is deemed exhausted, meaning that the patent holder could not influence the further distribution of the product. Companies that oppose parallel importation of medicines are not protecting their Intellectual Property rights, but rather trying to improperly exercise monopoly rights.

A pharmaceutical company’s patent rights is not absolute. Under the TRIPS (Trade Related Intellectual Property Rights) agreement, agreed in the 2001 WTO meeting in Doha, governments are allowed to access or produce cheaper generic drugs in the face of a public health crisis. A government can issue a compulsory license, which would allow the country to locally produce a generic version of a brand name drug to meet domestic demand.  Thailand has issued such a compulsory license in order to produce a drug used to treat HIV, which resulted in reducing the price of the drug by half.

I hope that the Cheap Medicines Bill becomes law,  and that it would indeed result in the price of medicines going down.

For a lasting solution to the problems re the price of medicines and of health care in general, what the Philippines needs to do is to adopt a system of universal health care. Under such a system, everyone would have health insurance coverage, and that this coverage would include all medical expenses (with the exception of optional procedures e.g. cosmetic surgery etc.).

One Response to “Cheap Medicines”

  1. Good info. and reading. I would definitely bookmark you to check for new updates.
    Thanks,
    Dean

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