The government has made strides towards achieving Universal Health Care (UHC) in the Philippines. It was an achievement indeed when President Rodrigo R. Duterte signed the UHC Law in February 2019. The UHC Act is an integrated and comprehensive law which seeks to provide all Filipinos access to a set of quality and cost-effective care without causing financial hardship. The law also prioritizes the needs of the people who, by economic status, may not be able to afford healthcare services.
Furthermore, the UHC law calls for a whole-of-society approach in the development, implementation, monitoring and evaluation of health policies, programs and plans. This approach calls for private sector collaboration, as the task to provide quality healthcare is too huge for the government alone to handle.
For years, our industry’s commitment to support access to innovative medicines on a universal healthcare platform has always taken center stage. In 2010, we commissioned the Social Weather Stations (SWS) survey on Healthcare Services and Financing to determine the people’s viewpoint on health for all. The results of the national survey prompted us to embark on more than a decade of universal healthcare advocacy, being the more sustainable solution to address healthcare gaps and improve access to health, particularly for the poor. With the wide-reaching impact of the coronavirus disease 2019 (COVID-19) pandemic on the health system and the people, we believe that it is time to realize the promise of Universal Healthcare.
The UHC Act considered the success and experience of other countries, especially in making medicines accessible. Countries such as Thailand, Australia, and the United Kingdom have UHC systems in place. These countries employ price negotiation mechanisms that are linked to volume to give the government the leverage to lower medicine prices. As a result, these governments are able to bring down prices, subsidize more needed medicines, and provide greater access to more patients in need, significantly reducing the out-of-pocket spending for their citizens.
Inspired by these international experiences, the country’s UHC Act also has provisions that could make medicines more accessible for Filipinos. Under the country’s UHC Law, it established an independent price negotiation board composed of representatives from the Department of Health (DoH), the Philippine Health Insurance Corporation (PhilHealth), and the Department of Trade and Industry (DTI) to negotiate medicine prices on behalf of the DoH and PhilHealth. This price negotiation board will specifically consider new technologies, innovator medicines, and those sourced from a single supplier. Oftentimes, these are medicines and technologies that have undergone extensive research and development and therefore have scientific evidence of bringing significant improvement in life expectancy or quality of life of patients.
Apart from the price negotiation board, the UHC Act also established the Health Technology Assessment (HTA) process, which systemically evaluates the social and economic benefits of medicines and technologies. The HTA process, according to the UHC Act, must be institutionalized as a fair and transparent priority-setting mechanism for the development of policies and determination of benefit packages for Filipino patients. The HTA Council has been formed to conduct the assessment of these new technologies and medicines vis-à-vis the value they bring to the patients and public health.
The price negotiation board and the HTA Council may consider strategies being recommended by the paper “Access to medicines in the Philippines: Overcoming the barriers” published by the Philippine Institute for Development Studies.
In the paper, it stated: “it [government] should expand the pooled procurement of medicines to attract more suppliers in the market. Such action gives the public sector leverage in getting medicines prices further down. The government can then distribute the medicines it procures to the poorest population who do not even have the purchasing power to acquire medicines even at reduced prices.”
The country has had successful experiences in medicine price negotiation and pooled or volume procurement. For example, DoH lowered prices of cancer drugs by up to 74% when it negotiated on the basis of volume. PhilHealth, on the other hand, also lowered the price of a kidney transplant drug by 50% through negotiation. The price was even the lowest compared with countries such as the UK, Canada, Thailand, Malaysia, Vietnam, and Indonesia.
Apart from PhilHealth, the Philippine Pharma Procurement, Inc. (PPPI) under the DTI also has the mandate to gather medicine requirements, negotiate and procure on behalf of the government. The PPPI, too, has its share of successful pooled procurement experience for innovator medicines.
The World Health Organization (WHO) explained that pooled or volume procurement combines several buyers into a single entity that purchases on behalf of the buyers. Due to larger volumes in pooled procurement, there is generally a lower price, a function of economies of scale. The Global Fund, meanwhile, said that such a mechanism provides access to competitive market terms and prices and eliminates procurement and delivery delays. Negotiations also open the doors for the entry of innovative medicines, unlike price regulation.
Two years since the UHC Law was enacted, provisions that would make medicines accessible and affordable have not been fully implemented. The rollout of such provisions will effectively transform the government to become the key purchaser of medicines and health services, drive up volumes with pooled procurement, negotiate and agree on reasonable prices, and make medicines accessible especially for patients disadvantaged by poverty and the pandemic. It is, therefore, time to fulfill the UHC promise to make medicines accessible once and for all.
Teodoro B. Padilla is the executive director of the Pharmaceutical and Healthcare Association of the Philippines (PHAP). PHAP and its member companies represent the research-based pharmaceutical sector in the country.