[01.24] Philippine Drug Industry, Drug Distribution, and Regulation V2.pdf

Module 01: Principles and Perspectives 2 Pharmacology...

Module 01: Principles and Perspectives 2 Pharmacology Philippine Drug Industry, Drug Distribution, and Regulation Peter Glenn Y. Chua, MD-MBA | 08/15/24 | Asynchronous TABLE OF CONTENTS → It is often an interaction of all of these perspectives and value propositions that one has to be aware of to be able to Learning Objectives 1 B. Human 5 navigate the health and biopharmaceutical sector I. What is Health 1 Resource: A. Perspectives on 1 Professionals II. PHILIPPINE BIOPHARMACEUTICAL INDUSTRY Health C. Money 6 Health perspective taken by the public sector/government: II. Philippine 1 D. Transparent, 6 health is useful Biopharmaceutical Accountable, and The government works as a whole in affecting laws and Industry Universal Suffrage determining policies A. Adoption of 1 IV. Supplement: Drug 6 → Where agencies work in coordination with other sectors and Definitions Distribution stakeholders B. Trade in the 2 A. Potential Growth 7 Government agencies have to be consistent with each other Philippines Opportunities → Example: COVID-19 response wherein there is a great lack C. Why is the 2 B. Cheap vs. Safe 7 of communication and coordination Philippine-Pharma and Effective Consistency, coherence, and involvement of all of its parts Industry not Making Drugs are expected of the government Drugs? C. Government 9 → These need to be expressed in its policies and standards D. What does the 2 Influence on the The Philippine government does not exist in a vacuum Biopharmaceutical Flow of Drugs → It does not exist in loyalty to one master Industry do? D. Local 9 → It has to be in coordination with all the different actors in E. The Philippines in 3 Government Code the world and, because of this, it has to be: the Health Product of 1991 Rational so that it can be understood Supply Chain E. Government 9 Consistent in that outcomes are predictable so that it is F. Partnerships: 4 Procurement not to be an enemy Compliance and Reform Act Clear so that meaningful action is made Disclosures F. Drug Price 10 → The perspective of the government is expected to be global G. The Regulator 4 Reference Index yet flexible H. Trends in 5 V. Conclusion 10 We have to be able to play and work well with others Regulation Summary & Key 10 We have to learn how to navigate the field with other III. Community as the 5 Points players Object of the Public Lecture Questions 10 A. ADOPTION OF DEFINITIONS Sector’s Authority Review Questions 11 One way we can be more informed is by adopting definitions A. Provision of Public 5 Rationale 11 for use Health Goods Definitions are derived from existing legislature and defined LEARNING OBJECTIVES globally in a standardized manner 1. Expand awareness of the ecosystem in which the Philippine Definitions are adopted to ensure that everyone understands biopharmaceutical industry exists each other when it comes to drugs, biological products, medical 2. Introduce instruments and organizations that are influential in devices, etc. the ecosystem → Important when it comes to trade 3. Reinforce values that underlie decision making Trade in health products is an important part of the health policy of the Philippines I. WHAT IS HEALTH A. PERSPECTIVES ON HEALTH Take Note! To properly understand the concept of health, we need to see the Health products different perspectives that different actors have with regards to → Food, drugs, cosmetics, devices, biologicals, vaccines, health in-vitro diagnostic reagents and household/urban Health is a commodity hazardous substances and or a combination of and or a → Useful as a tool or means to mobilize communities, to derivative thereof. It shall also refer to products that may enforce a form of social engineering have an effect on health which require regulations as Health is a right determined by the FDA. → Innate to every individual → Republic Act no. 9711, The Food and Drug Administration → Being human, all have access and are able to receive health Act of 2009 goods and services Drug → Everyone has to be covered by health financing → Clause 1: Articles recognized in official pharmacopoeias Health is a form of wealth and formularies, including official homeopathic → It is discrete and measurable pharmacopoeias, or any documentary supplement to any → A form of power that can assess progress and relative of them, which are recognized and adopted by the FDA; strength → Clause 2: Articles intended for use in the diagnosis, cure, Moving through the biopharmaceutical industry in the Philippines mitigation, treatment or prevention of disease in man or and in the world in general, these different perspectives are in other animals; constant interaction with each other, within individuals, and within → Clause 3: Articles (other than food) intended to affect the organizations structure of any function of the body of human beings or → It’s not that one perspective is better or more correct than the animals; other → Clause 4: Articles intended for use as a component of any articles specified in clauses (1), (2), or (3) but do not include devices or their components, parts or accessories. YL6 01.24 TG14: Trans Police [Uy] | CG7: Trans Police [Lengwa] | Version 2 1 of 11  → Republic Act no. 9711, The Food and Drug Administration D. WHAT DOES THE BIOPHARMACEUTICAL INDUSTRY DO? Act of 2009 WHY WE MUST PUSH FOR ONE IN THE PHILIPPINES Biological products → Derived from cells, tissues, or microorganisms We must push for the establishment of a biopharmaceutical → Reflect the inherent variability in the characteristics of living industry in the Philippines materials Biopharmaceutical industry is political, tightly regulated, and → WHO Expert Committee on Biological Standardization, resource-intensive sixty-sixth report. (WHO technical report series; no. 999) → But it is still is an important part of any well-developed, Medical device economically stable countries → Any instrument, apparatus, implement, machine, It is a matter of national pride appliance, implant, in-vitro reagent or calibrator, software, → E.g. In countries like France, the UK, and the US material, or other similar or related article intended by the The presence of large biopharmaceutical companies manufacturer to be used alone or in combination for indicates economic development and sophistication human beings for one or more of the specific purpose(s) OBSTACLES IN ESTABLISHING ONE of: Diagnosis, prevention, monitoring, treatment, or alleviation of disease; Diagnosis, monitoring, treatment, alleviation of or compensation for an injury; Investigation, replacement, modification, or support of the anatomy or of a physiological process; Supporting or sustaining life; preventing infection; Control of conception; disinfection of medical devices; Providing information for medical or diagnostic purposes by means of in-vitro examination of specimens derived from the human body. → This device does not achieve its primary intended action in or on the human body by pharmacological, immunological or metabolic means, but which may be assisted in intended function by such means. → RA no. 9711, The Food and Drug Administration Act of 2009 Figure 1. The process of producing drugs and acquiring approval for market release [Chua, 2024] B. TRADE IN THE PHILIPPINES The biopharmaceutical industry produces drugs, but the process Biopharmaceutical products (allied to chemical products) are to do so can be daunting in general not feasible to be exported by the Philippines → Not just extent of resources, and the complexity of the Health product trade is minimal in the country technology and science required → No active manufacturers producing Active Pharmaceutical → But also the regulatory gauntlet that drug companies, and Ingredients (API) in the country their drugs and products go through Examples: Just to bring a single product to the market → The active ingredient paracetamol for Biogesic (used for All the aforementioned factors can make it discouraging for headaches) is imported then made into a tablet locally companies to start innovating and manufacturing here → Co-amoxiclav and azithromycin as prophylaxis for COVID- 19 are imported and made into capsules/tablets locally BIOPHARMACEUTICAL INDUSTRY IN OTHER COUNTRIES → Two licensed Glycerin manufacturers that make syrups are present but the active ingredient/s (e.g., bromhexine, antibiotics dissolved in the glycerin) are imported C. WHY IS THE PHILIPPINE-PHARMA INDUSTRY NOT MAKING DRUGS? Possibilities: → Complexity of Drugs Drugs are technologically complex to make such that we are not capable of producing them → Too far off from our current capability to produce these products: antibiotics and molecules Requires a lot of investment just to start production Based on the Atlas of Economic Complexity by Harvard University → As a whole, biopharmaceutical products are: Technologically complex A bit distant capability wise for the Philippines compared to what is currently being produced here Even if vaccines, antibiotics and pharmaceutical goods are Figure 2. Shift of pharma companies to biopharma in recent years [Chua, 2024] economically complex and distant for our capabilities In other countries that are more progressive → We should not give up the opportunity to make them in the → Have moved to a more specialized aspect of the Philippines pharmaceutical industry, specifically for biologics → We should not rely on: → In the last 20 years, the focus of such large companies Supply from other countries (e.g. China, India, Vietnam include: and Europe) Vaccines Vaccines produced, tested and supplied by Russia Monoclonal antibodies Serums YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 2 of 11  E. THE PHILIPPINES IN THE HEALTH PRODUCT SUPPLY The consumption side is not problematic due to demand CHAIN → Demand is so strong in the country such that there is space We must understand our place in the health product supply for illegal means of distribution: chain if we are to push for biopharmaceutical industry Counterfeits development Product diversion WHAT THE COUNTRY LACKS Grey Market ○ Not exactly illegal, but non-compliant with the regulatory framework → Satisfying demand for health products and services is essential For the economy and overall human development in the country WHAT IS NEEDED TO STRENGTHEN SUPPLY For the Philippines to perform upstream biopharmaceutical industrial activities, individuals, communities, professionals, institutions and the public sector need to get the following Figure 3. Aspects the Philippines lack in the health product supply chain [Chua, 2024] elements together: We do not: → Stable Water Supply → Perform drug discovery Being addressed in part by the dam being built in Quezon → Have raw materials and Rizal In the sense that we do not have active pharmaceutical ○ Controversial, but is necessary due to water need ingredients → Power Supply The only one of note is lagundi The Philippines has a surplus at the moment, but will it be → Have suppliers for raw materials enough with our continuing economic momentum? There is a need to import materials such as: → Modernization of Agriculture ○ Nucleic acids Agriculture has been neglected and its modernization has ○ Primers to be anticipated and planned for as a contributory factor ○ Antibiotic raw materials to biopharmaceuticals WHAT THE COUNTRY HAS As we shift towards a more economically sophisticated environment, the face of agriculture will change Factors to tie the different components of the biopharmaceutical industry: ○ Transport ○ Logistics ○ Intensified Cleanliness Policy (ICP) Factors have to be in place ○ Putting these together would require a lot of resources, time, and effort from different individuals ○ Not one person can do it (it takes a village) MANAGING RISKS IN THE SUPPLY CHAIN Leaders, managers, decision makers, have to be aware of the risks in the supply chain to bring the reality of a biopharmaceutical industry in the Philippines Figure 4. Aspects the Philippines has in the health product supply chain [Chua, 2024] We have: → Clinical trial facilities → Contract research organizations → Manufacturing capabilities → Ability to produce fluids (IV fluids or swero) Can give an advantage in the pharmaceutical industry → Laboratories → Good intellectual property regime → Very good packaging and logistics Despite the archipelagic nature of the Philippines Figure 6. Risks drug manufacturers have to manage in the supply chain [Chua, 2024] Figure 6 is specific to drug manufacturers and shows the different pitfalls that may happen in introducing a new drug. Figure 5. The methods by which demand is met in the Philippines. Note the gray Potential issues: market [Chua, 2024] YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 3 of 11  → Active pharmaceutical ingredient source (ex. India, China) → World Bank → Contract-manufacturing organization → Asian Infrastructure Investment Bank (AIID) → Receiving a warning letter from the FDA regarding Currently bank-rolled by China intellectual property rights Losing steam given the US’ resistance against China’s There are many risks that need to be anticipated growing global influence → Well-documented by other countries that have gone through → Asian Development Bank (ADB) this path before Bank-rolled by Japan → If we are going to follow these footsteps, we have to be ready Continues to be an important partner for the Philippines for these risks Has reached beyond the Philippines, reaching South Asia, F. PARTNERSHIPS: COMPLIANCE AND DISCLOSURES Pacific, and Southeast Asia Partners become very important in aspects such as: Take Note! → In being ready for the challenges and the resource Succeeding parts are will be exploring two different requirements of establishing a biopharmaceutical industry perspectives: → Pushing for domestic manufacturing in the country → Health being innate → Acquiring technology → Health being discrete as a form of wealth, interacting with → Moving through patents the perspective of the public sector Partnerships are fundamentally based on trust. Leading trade partners of the country can be considered in → You will need to be honest and truthful building the biopharmaceutical industry → Communication will have to be complete, timely, → Leading partners based on import data in 2017: consistent, and coherent China (26.52%) → It is not simply about money, it is also about knowledge and Japan (9.22%) technology South Korea (8.47%) Take Note! Taiwan (7.95%) Doc Chua’s Prezi presentation emphasized key words, USA (6.95%) including: → Leading partners based on export data in 2017: → Timely China (21.00%) → Complete USA (12.95%) → Truthful Hong Kong (11.26%) → Mutual Japan (11.24%) → Discreet Thailand (6.27%) → These leading trade partners can be potential sources of POTENTIAL ORGANIZATIONS AND PARTNERS FOR technology transfer, which is an important part in initiating ESTABLISHING A BIOPHARMACEUTICAL INDUSTRY the creation of biopharmaceutical industry in the country Partnership is not only between other countries and the Philippines, it is the relationship between the public and the private G. THE REGULATOR To understand the relationship between the public and the private, you need to understand the nature of the regulator. → This includes its responsibility, task, authority of the government in the relation to the private sector and its citizens REGULATORY PYRAMID (HEALY & DUGDALE, 2009) 6 layers of instruments that the government can use in Figure 7. Logos of potential partners for the Philippines [Chua, 2024] influencing or asserting its influence (see Figure 8) Multilateral organizations or partners that the country may tap or → Bottom: frontline ask for help from include: Used more frequently → World Health Organization (WHO) → Top: used sparingly by the government → United Nations (UN) and its different components → Food and Agriculture Organization → US Government Established partner of the Philippines Not necessarily “good” as this term is subjective, however, they have given a lot of money through the United States Agency for International Development (USAID) ○ For the development and execution of health projects → The Gates Foundation An organization Doc Chua is particularly excited about Pushing for vaccine creation and development for various diseases including: ○ New diseases ○ Orphan diseases Figure 8. Regulatory pyramid [Chua, 2024] ○ Tropical diseases Level 6: Volunteerism, Peer Review, Clinical Guidelines ○ Neglected diseases Clinical guidelines are made by professional organizations → European Union Peer review within organizations Relevant economic partner when it comes to the → Considered a form of regulation pharmaceutical industry Level 5: Self-regulation, Accreditation, Disclosure ○ Even if it is currently preoccupied with their own political situation, especially with what happened in the United Intellectual Property Office of the Philippines Kingdom YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 4 of 11  → Exerts a form of regulation that is largely self-driven by the In Doc Chua’s opinion, this is a good development for the private sector country as a mature economy Companies have the initiative to look into the intellectual Data-driven medical devices & the internet of things property registry to check if their copyrights or patents are → More and more devices are plugged into the internet and compliant with the global regulations coming online, especially now that physical interaction is Level 4: Financial Instruments, Extra pay for Accredited limited Facilities, Case Mix Group Payment → This generates a wealth of information that needs to be looked at by statisticians and data scientists Philhealth → These can help regulators and the private sector become → Can incentivize good or compliant behavior among those more innovative and refine current practices receiving its benefits Example: For a case-mix group payment, hospitals need to III. COMMUNITY AS THE OBJECT OF THE PUBLIC SECTOR’S achieve a certain level of bed occupancy by indigent patients to AUTHORITY receive reimbursements The object of the public sector’s authority or power over the Level 3: Co-regulation, Medical Boards, External Audits private sector/citizens is the community The public sector exists to protect and to serve the public Physician licensure exam (PLE) By 2040: → Administered by the Philippine Regulatory Commission → There will be more Filipinos in their 20s than in any other (PRC) as a form of regulation age group Level 2: Meta-regulations, Mandatory Standards, Mandatory → There will be around 35 million Filipinas of childbearing age Accreditation → There will be 36 million more Filipinos Part of the Department of Health: What do Filipinos need to be healthy? → Food and Drug Administration (FDA) What does the public sector need to provide to make sure → Health Facilities and Service Regulatory Bureau (HFSRB) Filipinos are healthy? Agents that enforce mandatory standards, accreditation, and A. PROVISION OF PUBLIC HEALTH GOODS meta-regulations Providing these public goods to the community can take the form → Meta-regulations: regulations that can require those subject of: to it to issue regulations themselves → Establishing social safety nets Example: FDA can require drug companies to form drug Consumer Protection recall regulations that will be applied to its operations ○ Ensuring that the private sector is responsible and Requires regulations to be made by those subject to it reliable in its dealings with the public Level 1: Command & Control, License Suspension ○ Ensuring that people are getting a fair trade Primary agencies: Universal Health Coverage & Health Financing → Department of Health (DOH) ○ The public sector should ensure that these are available → Supreme Court to all, especially to those who need it Exercise command and control and license suspension → Patient Education and Product Labeling There has to be patient education for individuals/citizens to H. TRENDS IN REGULATION be functional as ultimate vanguards of health and their Instruments that the regulators of the public sector can look communities further into (or have been doing so the past few years) Individuals have to be sufficiently educated to make sure Public-private partnership that their decisions are informed → Improvement of the public-private partnership ○ Informed decision-making is anchored on what is → Not as rapid in the past 4 years available for people to read and comprehend But, there is an on-going public-private partnership Product labeling, fairness, and truth in advertisements Technology transfer ○ Important applications of public sector authority and → Aspect of trade that can be facilitated by the government regulation → Many technologies do not yet exist in the Philippines and are ○ Ensure that patient education and product labeling are patented oriented towards public safety The government has to negotiate with other governments → Electronic Commerce (government-to-government) to allow Philippine Safety of trade and individuals through electronic companies to practice or acquire these technologies commerce Especially for the biopharmaceutical industry The public has to be assured that the health products Regulatory harmonization & convergence individuals buy online are safe and effective → There is an alignment among the major health regulatory If there are failures in transactions, there are: agencies that they understand the same concepts and ○ Ways for corrections to be made definitions ○ Means for correction of products Includes: US FDA, European Medicines Agency, Ministry ○ Means for purchases to be reversed of Health, Labor and Welfare of Japan, etc. The community is the object of the public sector’s There is a reduction of redundancy when it comes to the authority regulatory efforts of these health regulatory agencies ○ The public sector exists to serve the community → This translates to more efficient resource spending of the private sector in bringing about new drugs to the market and B. HUMAN RESOURCE: PROFESSIONALS developing new drugs When a community is sufficiently protected and served, they give Shift from development aid to free trade agreements rise to human resources or professionals → Has been reversed in the last 4 years in the Philippines Professionals are able to give back to the community by: Previous discussions with the European Union (EU) to → Engaging with the private sector craft a free trade agreement with the Philippines have → Providing and extending their skills in service to the private been put on hold, if not, altogether discarded sector, public sector, and community → One of the measures by which the Philippines can be said to Based on the World Economic Forum’s analysis of necessary be maturing as an economy skill sets in the next 5-10 years, the human resources needed → We are no longer relying on our trade partners to be donors, are expected to be able to do: instead, we are beginning to truly be a trade partner → Complex problem solving YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 5 of 11  → Critical thinking → Health is fundamentally a right innate to each Filipino, to → Creativity each human being Among other skills, human resources have these abilities to It requires a lot of effort, time and resources for the Philippines negotiate the already evolving industrial revolution that is to have its own biopharmaceutical industry pushing more computers into the mainstream and into the supply → This must be done collectively; cannot be done alone chain → Requires not only the push of human resources but also the ACTIVE RECALL private sector to accommodate these changes 1. These are needed to strengthen our supply chain except: More practical for us now that professionals are the gateway A. Stable water supply and middlemen for the provision of goods and services for the community B. Power supply C. Modernization of agriculture C. MONEY D. Funding What lubricates the exchange of goods and services between 2. T/F: In the regulatory pyramid, those at the bottom are the community, public and private sector. used sparingly, while those at the top are used more → E.g. dividends, incentives, kickbacks frequently. The form of incentives can be questionable in the engagement of health professionals (specifically doctors) with the public 3. This perspective views health as discrete and sector, as they have been receiving incentives in different forms measurement. → E.g. travel, vehicles, placement in school, shopping, real Answer Key: 1D, 2F, 3Health as a form of wealth estate, sex IV. SUPPLEMENT: DRUG DISTRIBUTION The entire hierarchy of Maslow’s needs have been exploited to manipulate or influence health professionals in the conduct of their service to have them cooperate with the objectives of the one providing the service → Challenge for health professionals who are navigating the biopharmaceutical sector → We are here to provide goods and services that are sustainable, effective, safe, accessible, and convenient for the community, and not only to make money or enrich ourselves As middlemen for the community, we must understand that many Filipinos do not have an appreciation for the complexity of the biopharmaceutical industry → Still cling onto faith or having hand-to-mouth existence In the last two years, poverty incidence has been questionable Did not improve; they only changed the definition of poverty and lowered the bar Figure 9. The Philippine product space [Chua, 2020] With the distortion of truth, the role of the middlemen Figure 9. The Philippine product space (health professionals) become even more important As health professionals, we already have our own challenges The graph, representing 2018 data, shows that the product → We are drawn to provide for ourselves yet we have to space of the Philippines for biopharmaceuticals is vast. maintain our vocation → Plenty of space surrounding biopharmaceuticals → We need to look out for our fellow Filipinos who have nothing No products that are complementary or that lead to the (e.g. those who are scavenging, have food-to-mouth production of these products existence) → Illustrates the capability distance of biopharmaceutical While this may not be true for us, the marginalized are around us manufacturing in the Philippines D. TRANSPARENT, ACCOUNTABLE, AND UNIVERSAL Though it is technologically more complex and more distant SUFFRAGE capability-wise, we do not have to forgo the responsibility to push For many Filipinos, the only way their voice can be heard is for our own biopharmaceutical industry in the country. through elections (suffrage) Ensuring that we are able to protect our own interests in the form We have institutions for elections and yet their validity is of biopharmaceuticals is part of our sovereignty and questioned development as a country. → Has the public sector been effective in providing the public → A form of ensuring public health of Filipinos good of education? Public sector has provided education but in a revisionist approach by changing what has been established as historical truth The shift in the appreciation of truth is undermining the existing relationship between the public and private sector with the object of serving the community → Thus, education continues to be the core public good → As doctors, this is our fundamental vocation → We are, after all, teachers Docere = teach It requires a lot of collective effort, time, and resources for the Philippines to have its own biopharmaceutical industry Take Note! Health may be a form of commodity, a form of power Regardless of how or which way you lean, you should still believe that: Figure 10. Export portfolio of the Philippines [Chua, 2020] YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 6 of 11  Figure 10. Export portfolio of the Philippines Based on 2018 data, chemicals occupy small portion of the export portfolio or basket of the Philippines → The light pink color block above gold on the lower right quadrant represents chemicals → One of the squares inside the section for chemicals represents pharmaceuticals At present, it is a really small part of the Philippine economy A. POTENTIAL GROWTH OPPORTUNITIES Figure 12. Appropriations of government allocation [Chua, 2020] On the figure above, we see the general appropriations of the government allotted to: → Department of Health’s Medical Assistance Program Intended to give financial aid to support hospitalization of Filipinos → PhilHealth (PHIC) Used to pay for services rendered by medical centers, clinics, hospitals, and rural health units → Philippine Charity Sweepstakes Office (PCSO) Does not receive direct general appropriations because it generates funds through the lottery and sweepstakes Money they receive is used to finance healthcare expense by Filipino citizens → Local Government Pays for healthcare services of Filipino citizens Figure 11. Potential growth opportunities of the Philippines [Chua, 2020] Despite the large amount of money being spent by the As shown in Figure 11, the highlighted circles are quite distant government, out-of-pocket expenses are still important segments from those recommended by the model of Harvard University. of healthcare spending. → Shows that the opportunities that the Philippines have for a FLOW OF GOODS biopharmaceutical industry are not optimal (T01.22, 2025) → This is something we need to plan for. Despite the recommendation to pursue other industries that are considered low-hanging fruit, and the fact that the biopharmaceutical industry is more far-reaching compared to other industries, we should still set our sights for it because it is an apex industry that will ensure maturity of the economy. B. CHEAP VS. SAFE AND EFFECTIVE DRUGS The question: “Which is more urgent for us now—cheap or safe and effective drugs?” → Pushing for the local biopharmaceutical industry of the local production of active pharmaceutical ingredients is determined by asking this. → Has been asked in legislation, leading to the Cheaper Medicines Act (RA 9502) Enacted because there was a preference to lower the price of drugs Figure 13. Flow of goods [Chua, 2020] → However, this question is a false dichotomy A different MAP for the DOH is seen in the illustration above For drugs to be cheap, do they have to be unsafe? → MAP when it comes to goods is the Medicines Access For the drug to be safe, do they have to be expensive? Program These are choices that we should not be making and should not A centralized procurement program of the DOH be the primary focus of our legislators. Is able to consolidate demand from the different regional The questions should instead be: “How can we ensure that offices, hospitals and clinics safe and effective medicines are consistently supplied to By consolidating demand, the DOH can purchase in bulk, Filipinos?” which are often much cheaper compared to individual FLOW OF FUNDS hospitals and regional offices purchasing the drugs by themselves To understand the latter question, we need to understand how The savings in bulk purchasing can be used to purchase money is moving from the government to the recipients, i.e., the other drugs needed for the department’s health programs public. Since we do not have active pharmaceutical ingredient manufacturers, these manufacturers included in Figure 13 are more of formulation and filling facilities → They have the active ingredient imported, mixed with excipients, put it into a pill or capsule form, or dissolved into a syrup YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 7 of 11  → It is packed and labeled, distributed and sent to wholesalers, → Essential medicine importers, and distributors onto different units and offices that Formulary are going to use these medicines An important instrument of the Philippine government is the A manual containing clinically oriented summaries of Philippine International Trading Corporation (PITC) pharmacological information about selected drugs. The manual → Government owned and controlled corporation that can may also include administrative and regulatory information purchase medicines directly from sources abroad pertaining to the prescribing and dispensing of drugs → Provide alternatives for domestically produced and supplied A national formulary that generally concentrates on available health products and affordable medicines that are relevant to the treatment → The PITC’s intention: provide competition of diseases in a particular country Local pharmaceutical companies apply a significant → Example: Hospital formulary, clinic formulary which includes margin because they are importing a lot of the components all drugs that may be used for that particular setting Impression is that this margin is not in favor of the public Oriented towards what is usable and available to the clinician Effect: competition brought about forces the prices lower in Essential Medicine favor of patients and consumers Created with due regard to disease prevalence and public health There are several Medicine Access Programs, as seen in the relevance table in Figure 14. Oriented towards the needs of the population Lists of essential medicines also guide the procurement and supply of medicine costs, medicine donations, and local medicine production Table 1. Formulary and Essential Medicines Formulary Essential Medicine Satisfy the priority healthcare needs of the population Concentrates on available and affordable medicines that are relevant Selected with due regard to disease to the treatment of diseases in a prevalence and public health relevance, particular country evidence of clinical efficacy and safety and compare costs and cost-effectiveness List of essential medicines guide the Containing clinically oriented procurement and supply of medicines in summaries of pharmacological the public health sector, schemes that information about selected drugs reimburse medicine costs, medicine donations, and local medicine production Oriented towards what is usable and Oriented towards the needs of the Figure 14. Table for Other MAPs available [Chua, 2020] available to the clinician population MAP through PhilHealth is provided through the Z packages and Based on Figure 17, it is a listing of Primary Care Benefits (TSeKaP) different forms of the particular drug Local Government Unit based MAPs → Medicines provided by the LGU including: ComPack for non-communicable diseases like hypertension (Amlodipine, Losartan, Metoprolol) and diabetes (Metformin) Expanded program on immunization for infants Reproductive health - LGUs are supposed to provide prophylactics like pills, condoms, injectables depots, etc to suitable individuals Soil-transmitted helminthiasis for worms Figure 15. List of Different Medicines Included in the Different MAPs of DOH[Chua, 2020] DRUG LISTS 2 main drug lists relevant to our Philippine environment: Figure 16. Example of WHO Formulary[Chua, 2024] → Formulary YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 8 of 11  → Philippine International Trading Corporation (PITC) is a government instrument, a government-owned and controlled corporation Able to compete with manufacturers and pharmaceutical companies in the Philippines Can bring down the cost of the medicines by importing cheaper goods abroad, most commonly from India. Figure 19. Government Procurement [Chua, 2024] DOH, medical centers aligned under the DOH, and the local governments are each conducting their own procurement Figure 17. Example of WHO Essential Medicine List[Chua, 2024] activities → All of them are directly engaging with drug distributors, In the Philippines, we have a Philippine National Formulary manufacturers, and retailers to purchase medicines Essential Medicines List → Purchases are guided by the Local Government Code of → Outside, it bears the name of the national formulary 1991 → Inside it is an essential medicines list Used to guide procurement decisions since it is oriented D. LOCAL GOVERNMENT CODE OF 1991 towards the needs of a population/community Republic Act No. 7160 Tasked the Local Government Units (LGUs) with the authority Nice! to provide for health care needs of their constituents. A copy of this is accessible through the reference link in the → Even if the DOH is organizing bulk purchasing for the Canvas Page. You may take a look at the different entries department’s regional offices and hospitals all over the within the essential medicines list by the National Formulary. country, LGUs are still authorized by law to buy medicines C. GOVERNMENT INFLUENCE ON THE FLOW OF DRUGS even if the medicines are already provided by the DOH What should be provided to patients and consumers? There is a redundancy in supply → Money: patients can buy the brands of medicines they prefer ○ Not necessarily a bad thing, rather, it is a form of supply → Medicine: in favor of the supplier of the government, stability because these medicines can be purchased in bulk at a price If ever there is a challenge in the difficulty in supply chain favorable to the government of DOH, the LGU can swiftly act to compensate by buying Both are being done from an accessible drug store → Cash is provided via PhilHealth wherein they pay for them Provincial, District, Municipal and City health facilities were healthcare expenses of admitted/confined citizens aligned under the LGUs for administration. → Medicines Access Program (MAP) of the DOH provides LGUs are responsible for the procurement of the health facilities goods/medicines to Filipinos it administers. → Medication procurement redundancies Drugs should not be excessively purchased Stocks should be carefully monitored so that: ○ they do not expire as a result of having too much supply. ○ there is no lack of planning in terms of purchasing medication. Previously, the department of Health (DOH) headed the chain of command until the Rural Health Units (RHUs). Specialty hospitals and regional medical centers were retained by the DOH. E. GOVERNMENT PROCUREMENT REFORM ACT Republic Act No. 9184 One of the primary components of this act is planning the procurement of medication. → Planning for procurement requires has to identify the mode of purchase Figure 18. Flow of Goods [Chua, 2024] It set competitive bidding to be the default mode of Flow of goods from private and public sectors to patients and procurement by all government units and agencies. consumers are guided by government procurement Alternative methods of procurement in the absence of competitive bidding (Example: there is only one drug company that supplies a particular drug or product): YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 9 of 11  → Shopping: up to Php 200K for National Government Agencies ACTIVE RECALL Often resorted to during calamities 1. This lists the ceiling prices of essential medicines for An opening of emergency funds allow LGUs and government bidding and procurement set by the National government agencies to directly purchase goods for and Local Government Health Facilities and Government supply to offices and units that require them. Agencies. → Direct Contracting or Single Source Procurement 2. T/F: Essential Medicine is a type of drug list that contains Used for highly technical or highly complex goods clinically oriented summaries of pharmacological Used when there is no other source available for a particular good information about selected drugs. Different from Negotiated Procurement where there are 3. This alternative method of procurement is often resorted other suppliers involved but they do not participate in to during calamities. competitive bidding A. Competitive bidding → Repeat Order: up to 25% of the quantity in the original B. Negotiated procurement contract C. Shopping All procurement can be repeated for only up to 25% of the D. Direct contracting or single source procurement value of the original contract. Answer Key: 1Drug Price Reference Index (DPRI), 2F, 3C → Negotiated Procurement: requires competitive bidding to have failed at least twice beforehand V. CONCLUSION F. DRUG PRICE REFERENCE INDEX (DPRI) With all of the interaction between the public and private sector, Guides government procurement there is still space for improving the quality of services and goods “The DPRI lists the ceiling prices of essential medicines for provided to consumers, that is, the patients. government bidding and procurement set by the DOH for all The main question now becomes, “How can public and private National and Local Government Health Facilities and supply chains synergize with the long-term objective of Government Agencies.” establishing a local biopharmaceutical industry?” A relatively effective form of price control that is regularly → How can the supply be incentivized for the local published by the DOH biopharmaceutical players to invest in local manufacturing? → For maintaining resources of the LGU Requires substantial thought and planning Local governments are mandated to observe the price ceilings SUMMARY & KEY POINTS set in the DPRI. Health can be viewed (1) as a commodity that is useful as a means to mobilize communities to enforce a form of social gathering, (2) as a right, innate to every individual, (3) and as a form of wealth, discrete and measurable The government works as a whole, all of its parts are expected to be consistent, coherent, and involved. It does not exist in a vacuum and has to be in coordination with all different actors in the world. The Philippine-pharma industry is not making drugs because we have no active manufacturers producing pharmaceutical active ingredients The biopharmaceutical industry produces drugs; factors that make it discouraging to start manufacturing in the Philippines include the extent of resources, complexity of technology and science required, and the regulatory gauntlet that drug companies have to go through Figure 20. Drug Price Reference Index [Chua, 2024] There are 6 layers of instruments that the government can use in asserting its influence with regard to regulation. Those at the lower layers (e.g. volunteerism, peer review, and clinical guidelines) are used more frequently (frontline), while those at the top (e.g. primary agencies like DOH and the Supreme Court) are used sparingly A formulary is a manual containing clinically oriented summaries of pharmacological information about selected drugs and is oriented towards what is usable and available to the clinician Essential medicine satisfies the priority healthcare needs of the population and is selected with due regard to disease and public health prevalence, and clinical efficacy safety, and cost-effectiveness The Local Government Code of 1991 (RA No. 7160) tasked the Local Government Units (LGUs) with the authority to provide for the health care needs of their constituents The Government Procurement Reform Act (RA No. 9184) outlines the procedures and methods of procurement such as competitive bidding also known as the default mode of procurement, negotiated procurement, shopping, direct contracting or single source procurement, and repeat order LECTURE QUESTIONS 1. What is the list of drugs for priority health care needs of a population? Figure 21. Drug Price Reference Index Memorandum (DILG MC 2017-06) [Chua, 2024] a. Formulary YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 10 of 11  b. Essential Medicines List that make syrups, active ingredients mixed with the glycerine c. Drug Price Reference Index are still imported d. Pharmacopeia 4. [B] — A trend in regulation is the shift from development aid 2. Which alternative method of procurement requires to free trade agreements. This has been reversed in the last 4 years in the Philippines and is one of the measures by which competitive bidding to have failed at least twice? the Philippines can be said to be maturing as an economy a. Shopping 5. [F] — The Physician Licensure Exam (PLE) is characteristic of b. Direct Contracting Level 3: Co-regulation, Medical Boards, External Audit in c. Negotiated Procurement the Regulatory Pyramid. d. Repeat Order REFERENCES 3. The DOH is able to consolidate demand for select REQUIRED REFERENCES medicines and negotiate for the best possible price with this strategy. [Lecture] Chua P. (2020 September) Philippine Drug Industry, Drug Distribution & Regulation a. Mean Arterial Pressure b. Management Association of the Philippines c. Medical Assistance Program d. Medicines Access Program [Lecture] 4. If you are the mayor of a city, what do you have to consider in buying medicines? a. RA 9184 Password: 0=Fz7RvD b. RA 7160 SUPPLEMENTARY REFERENCES c. DILG MC 2017-06 [Trans] ASMPH Batch 2025. 01.22: The Philippine Drug Industry, Drug d. All of the above Distribution and Regulation 5. A local government unit is expected to provide free IMPORTANT LINKS medicine to its citizens for which disease? ✔ Errata Reporting Form: https://tinyurl.com/V2ErrataSubs a. Soil-transmitted helminthiases ✔ Errata Tracker: https://tinyurl.com/V2ErrataRes b. Acute lymphocytic leukemia ✔ Evaluations: P&P2 Trans Feedback Form c. Sexually-transmitted infections FREEDOM SPACE d. Breast cancer REVIEW QUESTIONS 1. The country has all of these except: A. Clinical trial facilities and contract research organizations B. Capability for manufacturing C. Good packaging and logistics D. Suppliers for raw materials 2. These are different partners the Philippines may tap in pushing for the establishment of a biopharmaceutical industry except: A. World Health Organization (WHO) B. United States Government C. European Union D. Department of Health (DOH) 3. [True or False] The Philippine-pharma industry is not making drugs because we have no active manufacturer producing pharmaceutical active ingredients. 4. All of the following are observed trends in regulation except: A. Improvement of the public-private partnership B. Shift from free-trade agreements to development aid C. Regulatory harmonization and convergence D. Data-driven medical devices 5. [True or False] The Physician Licensure Exam (PLE) administered by the Professional Regulation Commission (PRC) is characteristic of Level 2 in the Regulatory Pyramid Answer Key 1D, 2D, 3T, 4B, 5F RATIONALE TO REVIEW QUESTIONS 1. [D] — The country lacks suppliers for raw materials (e.g. nucleic acid, primers, antibiotic raw materials); these are all still imported 2. [D] — Partners the Philippines may tap only include: World Health Organization (WHO), United Nations (UN), Food and Agricultural Organization, United States Government, Gates Foundation, European Union, World Bank, Asian Infrastructure Investment Bank, and Asian Development Bank (ADB) 3. [T] — Paracetamol is imported, it is only made into a tablet in the Philippines; antibiotics like co-amoxiclav and azithromycin are also imported; although we have glycerine manufacturers YL6 01.24 Philippine Drug Industry, Distribution, and Regulation 11 of 11