The pharmaceutical industry is one of the fastest growing industries in Philippines , according to the Philippine Institute for Development Studies (PIDS). Its output, drugs and medicines, account for 46 per cent of the total medical out-of-pocket expenses of Philippine households. For poorer people, this percentage goes up to 55 per cent. However, out-of-pocket financing for healthcare indicates inequality. Many rural areas in the country are yet to benefit from marginal improvements in basic infrastructure and state services, including healthcare.
According to Al Z. Castro, General Manager of IMS Health Philippines, Philippines benefits from the strong momentum of the many markets in the Asia-Pacific region, driven in large part by macroeconomic growth, rising healthcare spend, and urbanization.
The Philippine’s pharma market growth is positive, sitting at around three percent for the total market. This growth is driven mainly by branded generics and consumer health. Based on IMS Market Prognosis, the CAGR of the Philippines will average around 3.8-4.0 percent through 2017.
Among the factors that are expected to fuel this growth are improvements in healthcare facilities across the country, the continued push for generic medicines and for generics-only pharmacies, and the eventual implementation of Universal Health Coverage (UHC).
The Philippine government is committed to achieving UHC and they are building the funds to do so. The reason why this as a major growth driver for the industry is because core to UHC is a commitment to the needs of the poorest in the Philippine society who have yet to benefit from better access to medication and healthcare.
UHC also aims to include out-patient treatment. Currently, PhilHealth benefits only apply to in-patient treatment, or treatments for patients who have been admitted to a hospital. As the program expands, coverage to out-patient treatment, all pharmaceutical/healthcare organizations—MNCs included—have the opportunity to develop products and services with pricing structures that complement the spending capabilities of the expanded PhilHealth beneficiaries.
While the move towards UHC is perceived to mostly benefit low-cost generic products, we believe that it will not be a space that solely national companies can play in, especially considering that an increasing number of MNCs have entered the generics market.
In the Philippines, foreign drug firms are the primary players, accounting for approximately 75 per cent of the pharmaceutical market. Sanofi, GlaxoSmithKline (GSK) and Novartis are some of the biggest foreign drug firms in the Philippines. Large domestic pharmaceutical firms include Natrapharm, United Laboratories, Pascual Laboratories and GV International.
Recently, the major gains made by domestic pharmaceutical firms have been in the generics market. In the past, few Filipinos trusted generic pharmaceuticals. Furthermore, doctors mostly prescribed branded drugs, in part because of the incentives offered by major drug companies. However, new legislation has made it mandatory for public hospitals to use generic drugs. As these drugs are increasingly prescribed, Filipinos are becoming more accepting of generics.
For both foreign and local manufacturers, the segment with the most rapid growth in the Philippines is the generics market. Companies like Orient Europharma of Taiwan and Getz Pharma of Pakistan have been expanding their in-country operations. So has Sandoz, Novartis' generic arm. To compete with these generics, many foreign companies are significantly reducing the prices of their branded pharmaceuticals, in some cases by up to 60 per cent.
Last year President Benigno Aquino III signed the National Health Insurance Act of 2013, a law that expands the national health insurance scheme, PhilHealth. National healthcare coverage will now be available to all Filipinos. In fact, the Act includes provisions to prioritize the needs of the disabled, elderly, women and children, underprivileged and sick. Furthermore, free healthcare will be provided to indigents.
Currently, 80 per cent of the Philippine’s 106 million people are covered under PhilHealth, a percentage that has grown rapidly over the past decade. The original bill establishing PhilHealth did not allow local governments to enroll patient groups until there was “reasonable access to adequate and acceptable health care services.” The 2013 law cancels that provision.
To pay for increased coverage, the central government has poured nearly $300 million in subsidies into PhilHealth since January 2013. In addition, it has doubled the 2013 budget for the Department of Health, which oversees the program. However, PhilHealth will need still more money in order to increase individual benefits. Currently, only about one third of healthcare expenses are covered under the plan, and almost no outpatient medications are eligible for reimbursement.
The Z Benefit Package is being offered to PhilHealth members to address health conditions that trigger prolonged hospitalization and very expensive treatments. Conditions under type Z, the farthest end of the spectrum, are cases "perceived as economically and medically catastrophic" due to the seriousness of the case.
All eligible PhilHealth members including their qualified dependents are entitled to avail of the package.
Consistent with the government’s commitment in delivering quality healthcare for all, a multi-sector program spearheaded by the Philippine Health Insurance Corporation (PHIC), was launched recently at the Zamboanga City Coliseum.
The “Alaga Ka” program launch was attended by some 500 indigent families which were identified through the Department of Social Welfare and Development’s Listahanan or National Household Targeting System for Poverty Reduction. Listahanan provides high quality list of the poor households nationwide and maintains its sharing of database among National Government Agencies (NGA’s) as stipulated in the Executive Order 867 series of 2010.
Through the “Alaga Ka para sa Maayos na Buhay” or simply Alaga Ka is a program implemented in 17 regions nationwide that seeks to provide the country’s 14.7 million indigent families with greater access to primary health care services. Philhealth’s strategic campaign for the ‘Alaga Ka’ aims to increase the utilization of primary care services by the enrolled indigent families, empower families with the right and accurate information about their benefits and educate them on to maximize its used emphasizing the concept that the poor are being taken cared by the government.
During the launch, DSWD through Listahanan provided assistance to these families and those who are non-members of PhilHealth through a Validation Desk.
Philhealth’s Regional Office IX has already enrolled 1,050,048 members covering Zamboanga Peninsula. They make sure that all those covered by Listahanan (NHTS-PR) can receive the benefits they deserve from them. The National Government shoulders the Annual premium of this indigent families amounting 2,400 pesos.
Furthermore, A massive information drive was also delivered to all attendees to address the need for awareness. Among these is the Philhealth Primary Care Benefit Package (PCB)’s TSeKap (Tamang Serbisyo para Kalusugan ng Pamilya) that seeks to heighten their awareness on the benefits they gain from this programs. TSeKaP consists of essential services aimed at prevention, early detection of diseases and even interventions for healthy living. It includes series of consultation, visual inspection with acetic acid, regular blood pressure monitoring, periodical breast examination, and health promotion like education on breastfeeding, counselling on lifestyle modification and smoking cessation and diagnostic procedures, said Philhealth.
According to one of the officials, the implementation of these indigent programs for the indigent families became more efficient and credible through the presence of the DSWD’s Listahanan (NHTS-PR) database. He further said that through the Listahanan, Philhealth no longer need to go through the voluminous documents and laborious process of identifying its recipients as the list can be easily accessed since it is already done electronically.
Majority of the families present during the event are also Pantawid Pamilyang Pilipino Program beneficiaries of the Department of Social Welfare and Development coming from selected barangays around the city.
Health Secretary Enrique T. Ona has expressed optimism that government hospitals would become self-sustaining as the Aquino administration was pushing for more PhilHealth enrolment, particularly among the poorest of the poor.
Ona, who was speaking at the “soft opening” of the newly constructed Southern Leyte Provincial Hospital, told journalists he saw no problem in the operation of the new facility, or any other government hospital, as the government was increasing the number of PhilHealth beneficiaries. The hospital is not completely finished yet.
By July of this year the DSWD will be evaluating the new list of indigents, targeting at least half of the population in the country through the Pangkalahatang Kalusugan program of the Aquino administration, he said.
Ona said that under the program the government would pay for the yearly PhilHealth premium of poor families, many of whose members die without seeing doctors or going to hospitals.
“With this, the PhilHealth will now be paying hospitals for the hospitalization of sick members of poor families. They will leave the hospital without paying a single centavo.”
By this alone, he said, hospital operations could be sustained.
Ona said close coordination between LGUs and the Department of Health was essential for the success of the Pangkahalatan Kalusugan program.
Noting its modern structure, Ona predicted the new hospital, touted to be the biggest in Eastern Visayas, would become a premier hospital in the region, serving not only Southern Leyte’s 500,000 population but also residents of towns in Leyte province.
He said the hospital will have CT scan and state-of-the- art laboratory facilities so that patients will not need to go to Ormoc or Tacloban for these tests.
The new hospital, which cost around P300 million, has about one hectare of floor area with 87 private rooms sitting on 3.17 hectares of land in the village of Dongon, five kilometers from the centre of Maasin.
The expansion of national coverage offers mixed opportunities for foreign firms, which dominate the country’s $4 billion pharmaceutical market. Increased coverage should expand the number of Filipinos who are eligible for reimbursements, enhancing opportunities for global drug companies. At the same time, the expansion of PhilHealth could also increase the pressure on the central government to reduce reimbursement pricing further.
The country - given its strong economic growth - needs to speed up upgrading health facilities, recruit and deploy health human resources, ensure competency, and ensure the availability of drugs, medicines, and vaccines throughout the country.