Price War in Pharmacy Sector

by Alvin Capino

Former Bulacan governor and current Philippine International Trading Corp. president Roberto Pagdanganan appeared ecstatic the week before All Saints’ Day. He could help it. He just brought the government closer to its dream of providing the average Filipino income-earner with high-quality affordable medicine.

Obet’s upbeat mood may have been triggered by an announcement made by a United Laboratories, Inc. division called Therapharma. The latter said it had launched a medicine called Amlodipine Camsylate. It is now known in the market as Amvasc, a treatment for hypertension.

Unilab’s Amvasc is an important solid proof to a thesis that Obet has espoused for some time now: that it is possible to make available to Filipinos cheaper drugs that are of the same quality and efficacy as that of their more expensive counterparts.

Amvasc is selling at P17.50 per 5-milligram tablet. Before Amvasc was launched some time late last month, there was only one anti-hypertension drug available in the local market. And it was selling at a whopping P44.75 per 5-milligram tablet. Amvasc is 60 percent cheaper than what was previously the only available medicine for the ailment.

Media circles and coffee shops are now abuzz with talks that the launching of Amvasc could trigger some kind of price war within the pharmaceutical industry. The hope is that the maker of the more expensive version would suddenly let its market price plummet to approximate the Amvasc price level. Maybe not at par, but very close.

A price war appears to be a logical development in this sector. The prevailing view is that if the maker of the more expensive drug keeps the product at the P44.75 level, it can kiss its market good bye. Between a P44.75 drug and a P17.50 medicine of exactly the same quality and efficacy, the patient would definitely go for the lower-priced brand. We don’t think medicine brands have sentimental values like some automotive brands do. People don’t like over-spending for medicines. They want to buy treatment at an optimum price level that guarantees safety, quality and efficacy. They don’t decide the same way when buying cars.

Yes, we do hope a price war ensues. In this kind of war, the people win.

And there will be many winners. A study disclosed by Dr. Esperanza Cabral, Social Welfare Secretary, showed that 17.4 percent of the country’s adult population or those 20 years and older are suffering from hypertension. In absolute figures, this sector is more or less 7.76 million. They could definitely benefit from a high-quality drug within the reach of average wage earners.

Cabral, a cardiologist, belies the myth that hypertension is a “rich man’s disease.” If it were so, why then would a large number of Filipinos be dying due to “under-treatment?”

Cabral herself supplied the answer: it could only be because most of them could not afford what was previously the only available drug in the local market.

Here is another hope: That the price war would bring the price tags of the medicine sold by multinational companies in the Philippines to the same price levels at which these multinationals sell these drugs in India and Pakistan.

It will be recalled that Obet went to war against these multinational pharmaceutical companies last year after the government announced plans to reduce the price of vital medicines by 50 percent before 2010. Obet paid dearly for that quixotic quest—he got sued by a very big multinational drug company.

The head-on collision with multinational pharmaceutical interests was spurred by findings that many of the vital treatments that Filipinos need are being sold here by these companies at astronomical prices. A known pain killer sells here at 90 percent more than its price in India. The same company sells it in Pakistan at 5 percent off the Philippine price tag.

Sickening, indeed, pun slightly intended.

Here is a third hope: That it would be a price war and not a smear campaign against the new and affordable treatment that would ensue. Our colleagues have expressed concern that the interests that the cheaper product would affect could opt instead to demolish the product’s reputation in the market rather than compete with its price. This would be tragic and this is something the public must guard against. The pharmaceutical sector is a business and competition reigns. There are only two valid areas of competition in business: price and quality. Those are the determinants of consumer decision-making.

The shortcut, of course, is to demolish the reputation of the competition. In this option, the market is the loser. In this particular case, 7.76 million Filipinos stand to lose.

Scientists say the processes of pharmacy are basically the methods of chemistry. But there is one factor that raises pharmacy to a level higher than chemistry. This factor is called “conscience.” Pharmacy is the merger of conscience and chemistry.

Amvasc must be the product of this definition. This is, indeed, a welcome development.

When a Filipino pharmaceutical company such as Unilab comes up with a product 60 percent cheaper and which has the same quality and efficacy as its expensive counterpart, that must be the “conscience” part of pharmacy in action.