Monday, April 28, 2008

Cheaper Fake Medicines Bill


UPDATE: Noy Oplas' paper Making Medicines Cheaper: the Role of Innovation, Competition and Taxation should be read in full by anyone who really wants to understand the issues surrounding the so called Cheaper Medicines Bill (ratified today by the Congress bicameral committee and likely to be signed into law in the next few days). Here is his Conclusion section (please pass until Mar Roxas and Pia Cayetano see this!)

When the legislators who are in the frontline now telling the public that their legislation can indeed bring down the prices of medicines, run for the same or higher offices in 2010, they and the public will be in for a big disappointment. And the same legislators who were in the frontline enacting said legislation will be forced to look for another set of scapegoats since the public will ask them why prices of quality and safe medicines are still high.


ho could possibly be against the idea of lower prices for life-saving medicines? Especially after it has been suggested that the cause of high medicine prices are those greedy capitalist pigs with their imperialist intellectual property rights protection laws! Look, they say, at marvelous India, where they've dispensed with such crass Western ideas as patent protection for inventions and discoveries and so you can buy Norvasc there at ten times lower price than in the Philippines. The main proponent of the alleged cheaper medicines bill about to be signed into law by President Arroyo, Sen. Mar Roxas said on radio today that it would bring about cheaper medicines for the poor in three ways: (1) parallel importation from places like India would create competitive pressures and force "foreign drug companies" (read American and European) to lower their prices; (2) "reform" in intellectual property rights protection would "encourage" and "strengthen" the generics drugs industry by breaking "unfair" patent monopolies and extensions of patent protection; and (3) price regulation would set "maximum retail prices" for a list of commonly used drugs.

To me, this is an example of lethal demagoguery that will lead to cheaper fake medicines that will kill or seriously harm many innocent people, and more expensive real medicines that will truly be out of the reach of poor people.

I agree with Bienvenido Oplas Jr. of the NGO Minimal Government Thinkers who enumerates some pertinent and eye-opening facts: (1) Only one percent of the World Health Organization's "Essential Medicines List" is presently under patent protection, which means Mar is all wet on this since the generics drugs industry can already produce 99% of those essential medicines without worrying about those nasty imperialist protectors of IPR; (2) 30% of drugs sold in developing countries are fake or low dose versions of the real thing, with India's much vaunted "independent" drug industry producing much of the 42% of drugs sold in India that are fake. (3) Taxes and import duties are a main reason for the high price of medicines, not patent protection, which is necessary to keep the flow of important new medicines coming, given that in the US it costs an average of $800 million in R&D, marketing and regulatory costs to bring a new molecule to market.

Given the penchant of Filipinos for fake DVDs, fake watches, fake brand name blue jeans, and even fake fake knockoffs of the real things, they are likely to think that fake medicines are just as good as fake digital copies of the real things. Combined with the euphemism of "parallel importation" (read hundreds of viajeras going to India and coming back with suitcases of pseudo Norvasc and other "killer medicines"), I think we have the recipe for another spectacular government sponsored social disaster. Without a massive government testing and quality control program for hundreds or maybe thousands of new drugs and multifarious or unknown sources and manufacturers of them, parallel importers may as well import rat poison and dispense them through the upcoming Price Regulatory Board instead of putting people through a regime of quite possibly fake or under-dose meds.

Years from now, after the toll in death and suffering this misbegotten legislation will have caused, I wonder if anyone will remember what remarkable idealism, and anti-Western indignation accompanied its accursed birth.

The bill's supporters may claim to be choosing "patients over patents" but in the light of the facts they are really choosing "fakes over patients" whose real costs are infinitely higher than what is paid for high quality meds.

Philosophically, I am also opposed to the idea of price regulation for medicine that sets maximum retail prices for drugs, because it will only legitimize the market for fake or underdose generic drugs by supplying a Suggested Retail Prices even for them.!

22 comments:

Jaywalker said...

You get what you paid for...... that in essence is what the cheap med is all about.

mesiamd said...

The Cheap Medicine Bill has been delayed for so long. It looks like our legislators are under pressure to come up with the law even if they haven't resolved the loopholes of the bill's provisions. Even doctors don't know much about the bill----except that it promises cheap medicines.

Perhaps, one of the reasons why this cheap medicine bill is fraught with uncertainty is because of lack understanding even among our legislators. Are they just sitting on their chairs waiting for whatever will come out of the bill? Have they adequately educated themselves and the public on the salient issues involved?

Honest clarification of issues for the public are almost non-existent. If there are, the impression is, many are made by lobby groups (i.e. pharmaceutical companies whose aim is for their business to thrive,) negating the original intention of helping the country, particularly the poor.

The legislation is about to be enacted, but our leaders haven't done anything about fake medicines which is a problem for many decades. The existence of this problem alone can destroy all what the bill intends to accomplish.

DJB Rizalist said...

mesiamd,
we should not expect the pharmaceutical companies to act like charities. they are big global businesses like the oil industry. These molecules we call medicines are not exactly easy to develop test and deploy. But neither ought we to slay the goose that lays the golden eggs. There are other ways to broaden the access to affordable medicine than that.

jaywalker,

the insidious thing, as usual, is the subliminal suggestion by the proponents that the poor will actually get these meds for little or nothing, just like with fake DVDs and other forms of stolen intellectual properties.

we use alleged oppression and exploitation to justify shooting ourselves in the head!

Anonymous said...

cheaper does not necessarily when fake. have you heard of fake louis viutton bags?

i can buy cheaper suka from my sari-sari store, knowing fully well that they have been fermented from tuba. i can also buy white vinegar made in the u.s., and heck what i don't even know what preservatives have been included in the processing.

point is: there has to be a strong monitoring procedure to safeguard against fake production of drugs--cheap or costly. you tend to equate cheap with fake, and why is that?

DJB Rizalist said...

anonymous,
it is because "cheap" will supposedly result from "parallel importation" of meds from places like India, which is where they will be produced and sourced. How can we monitor and control quality when a flood tide of such meds will be brought in by an army of viajeras.

As for why I equate "cheap" with "fake", you cite yourself the case of "cheap" Louis Vuitton "fake" handbags!

Except I think it will be harder to tell the difference between real and fake Norvasc until it is too late.

Remember in the case of goods like handbags the whole point is to fool the spectators, not the bearer!

In the case of cheap fake meds, let the bearer beware!

mesiamd said...

DJB:

Rightfully, we must never expect pharmaceutical companies to act like charities. But at times they use charity to gloss over their intentions to make more profits.

It's up for us to put up with their manuevers. We must be smart to make the law work for us (not only for them.) The fact is prescription drugs are expensive and barely are they affordable to the poor and the middleclass.

We hear people say they prefer to just die than get sick. And they mean it. They know by getting sick, they'll drag their families to penury and bankruptcy. This is a real big problem our society faces.

Anonymous:

I agree with you about monitoring. Cheap medicine doesn't necessarily equate to fake medicine. But the sad truth, we don't have effective monitoring in the country. That explains why we have widespread fake drugs around long before this bill is even proposed. People fear fake drugs will worsen with or without the bill being made into law.

Anonymous said...

my point of bringing lv as an e.g. is that the function of the bag remains the same. one though is paying more for the brand name (a silly brand name at that!). in other words, there is no such thing as fake bag, only fake label.

as to medicine, fakes do abound. which means they should not be considered medicines at all since they do not meet the purpose of aiding the sick. hence the need to monitor their production. but--since you're into godellian mode-- logically cheap medicines can still be made. fake manufacturers then should not be meted out with fake penalties.

DJB Rizalist said...

mesiamd,
bmw and mercedes benz cars are expensive too. But no one has a right to have them cheaply. meds are economic and social goods just like cars. there is no accounting for WHY any particular person might for example need the best and most expensive medicine. maybe he has lived a wanton and wasteful life too and cannot afford or deserve it.

i guess the point is, why don't we also have a "cheaper beamers" law? what right does BMW have to market such expensive automobiles anyway?

Or does it have something to do with "quality" and supply and demand?

Anonymous said...

bmw and mercedes benz can be considered giffen goods, and in their pricing lies the attraction. but medicines--for humanity's sake-medicines should not be categorized as luxury goods. in doing so, pharmaceutical companies are acting like hostage takers.

Anonymous said...

correction: veblen goods, not giffen goods.

blackshama said...

Pinoy doctors have been "parallel importing" cheaper drugs from Bangkok and Mumbai for ages. If you ask these doctors, they feel compelled to provide these drugs to patients since they can't afford to pay for drugs available from pharmacies.

The private medical practitioners have for their clientle the middle to lower middle class.

I don't see why the cheaper medicines bill will result in a flood of fake drugs. Proper regulation is the key here. If the expensive drugs are out of reach,expect that there will be a larger market for fakes.

And this market is above ground and legit. They all have the BFAD disclaimer "No approved therapeutic claims".

I don't agree on price control for drugs though. What the government should do is lower the VAT on medicines. This should be one of the the environmental damage subsidies to human health due to the State's neglect of protecting environmental and human health.

Gabby said...

i agree with mesiamd. PR and quality are and should be separate issuses.

It depends on how the law is crafted and implemented. I don't know if the bill is in favor of widespread importation without liability. But its obvious that this is not the only way PR can be implemented.

Kevin Ray said...

Actually, the title of the bill is "Quality-Affordable Medicines Bill" and it's nickname is the "Cheaper Medicines Bill."

Does it mean that the medicines that are available in India, Pakistan, etc. are also fake?

DJB Rizalist said...

OKAY, suppose I were to propose a new piece of legislation, call it the Cheaper XYZ Bill

Aside from the "XYZ" part my new bill would be largely a verbatim copy of the Cheaper Medicines Bill.

Now based on whatever principles people believe in, what would you allow me to define as "XYZ"?

e.g. would anything covered by our IPR covenants be Okay?

DJB Rizalist said...

Kevin Ray,
The World Health Organization estimated this year that 42 PERCENT of all meds sold in India are fake or dangerously under dosage and quality!

But why would our viajeras bother to buy the real stuff? And how would they know which was which?

blackshama said...

DJB

How much should you trust a viajera with an MD after her name?

The Viajera MD after all has to protect her reputation. ( a doc with a bad rep would lose patients!) If she has to illegally sell (remember MDs can't sell drugs but just write prescriptions!) medicines from Bangkok or Mumbai, she is likely to ask her patient if he/she would like to buy drug x at Mercury Drug or from her.

The logic is this: antihypertensive drug x costs 110 pesos and the patient has to take this 3x a day.The same drug from our Viajera MD costs 35 pesos! The only diff is that the clinical instructions are in Thai!

It isn't the drug companies (whether they are in India or anywhere the patients) trust but their physicians.

The alternative is to take all that "drugs" and "food supplements" with the irritating disclaimer "No approved therapeutic claims".

Now DJB has to falsify the claims of

1) Drug X manufactured by a EU company and sells for 110 pesos retail.

2) Drug X manufactured in Bangkok and sells for 35 pesos retail.

3) Drug Xprime manufactured in Manila but has no approved therapeutic claim.

These three options are available to Viajera MD's patients.

What would DJB do.He can subject all drugs to proper clinical trials.

Given the results of the clinical trials,whom will Viajera MDs patient put his/her trust in?

My point is that results clinical trials don't figure much in patients' choice of drugs but their trust in their doctors.

This is so obvious. The Chairwrecker Billy Esposo of the Phil. Star has written much opinion against the Cheaper Meds Bill but Billy can only cite his trust in his physician who he credits for saving his life!

DJB Rizalist said...

Ben,
I think that in general the price of goods like medicines ought to be a good indicator of whether they are any good or not, taking all factors into account, including manufacturing, processing, AND testing and regulatory oversight. Granted in imperfect systems like ours we have to trust someone, and usually it is the doctor we trust.
But it seems to me that price does reflect the costs of not only the R&D but the regulatory enforcement of quality control for those meds that are "in the system."

My fear is that the current bill by attacking the IPR costs as somehow unnecessary and oppresive has also let loose the "no-testing or regulation" part of things and that it is only paying lip service to that promising to make things cheaper.

In other words, the implication is that meds are expensive not because they ought to be if we expect quality but because someone is making unfair profits.

Why has WHO discovered that 42% of drugs in India ARE fake? I think it's the effect we will also see here of an essentially rogue regime of law that disrespects both the market and IPR.

Dave Llorito said...

i dont understand "parallel importation." why not free the trade in medicine through low tariffs?

DJB Rizalist said...

dave,
sen. pia cayetano just explained the term on TV. essentially it is a way of sidestepping IPR covenants by allowing non patent holders to import patented medicines from other countries contrary to the desires of the patent holder.

It's a way of breaking patent protection!

ricelander said...

"bmw and mercedes benz cars are expensive too. But no one has a right to have them cheaply. meds are economic and social goods just like cars..."

Hmm, but I could choose to buy Hyundai, right?-- if it's all I could afford-- to get me to the same destination, if less luxuriously.

DJB Rizalist said...

Ricelander,
Never mind that analogy. The point is only ONE PERCENT of essential medicines are ON PATENT. It's taxes and duties and the lack of a strong generics industry that is causing meds to be expensive, not IPR!

Teresita said...

Blackshama: The logic is this: antihypertensive drug x costs 110 pesos and the patient has to take this 3x a day.The same drug from our Viajera MD costs 35 pesos! The only diff is that the clinical instructions are in Thai!

Bought two automatic BP checkers and sent them in balikbayan boxes, one to Manila, one to the Province. That way, if the relatives get the cheap 35 peso drug, they can at least make sure it works.