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Philippines forces drug price cuts

Price caps will be imposed on 27 drug products in the Philippines after manufacturers failed to go far enough to reduce the prices voluntarily

Price caps will be imposed on 27 drug products in the Philippines after manufacturers failed to go far enough to reduce the prices voluntarily, according to the country's president, Gloria Macapagal Arroyo.

Maximum retail prices on the medicines, made from five compounds, will start on August 15 after Arroyo signed an executive order.

Drug companies, including Pfizer, had offered to cut prices by between 10 and 50 per cent on 22 other drugs but not the 20-plus essential medicines recommended by the Department of Health.

The Pharmaceutical and Healthcare Association of the Philippines, which includes Pfizer, said it regretted the decision because it believed the same result could be achieved through free-market competition.

"Price control may deliver short-term benefits but the long-term negative consequences not only on the pharmaceutical industry but on other industries must be considered," it said.

The country's health officials said the Philippines had the second-highest drug prices in Asia. In 2007, a World Bank Study survey showed that drugs being sold in the Philippines were priced 34 to 184 times higher than international reference prices.

Originally, the Philippine health authorities proposed to price cap over 80 products, but fearing international resistance, the president asked pharmaceutical companies to reduce retail prices voluntarily.

The government accepted the bulk of the voluntary price cuts but rejected them for 27 preparations made from five compounds.

The mandatory 50 per cent price cuts will cover the anti-hypertensive amlodipine, the antibiotic azithromycin, cholesterol-lowering atorvastatin and two cancer treatments – doxorubicin and cytarabine.

In a statement, Pfizer said it had made "the largest offering of voluntary reductions by any one company," and was "disappointed" with the government's decision.

29th July 2009

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