i-cheaper medicines program review

8/12/2019 I-Cheaper Medicines Program Review

1/58

Philippine Institute for Development Studies

Review of the Cheaper Medicines

Program of the PhilippinesBotikang Barangay, Botikang Bayan, P!!

"reatment Pack, and the Role of PI"C Pharma, Inc#

in $overnment Drug Procurement

%scar Pica'o


2/58

2

Abbreviations and Acronyms

AO Administrative Order

BFAD Bureau of Food and Drugs

BnB Botikang Barangay

BNB Botikang Bayan

CHD Center for Health Development

COBAC Central Office Bids and Aards committee

DOH Department of Health

!O !"ecutive OrderFDA Food and Drug Administration

#$A% #overnment $ediated Access %rice

' &ocal #overnment 'nit

&(O &icense to Operate

HA) Health Action )nternational

)&H* )nterlocal Health *one

$e(A $edicines (ransparency Alliance

$+% $a"imum +etail %rice

NC%A$ National Center for %harmaceutical Access and $anagement

N#O Nongovernmental Organi,ation

%-.. the %hp -.. Drug +egimen %rogram

%H)C %hilippine Health )nsurance Corp/

%hilHealth (he social health insurance program managed 0y the %H)C

%)(C %hilippine )nternational (rading Corp/

%D) %arallel Drug )mportation

%hp %hilippine %eso

%%) %)(C %harma1 )nc/

+A +epu0lic Act

A( alue Added (a"

3HO 3orld Health Organi,ation


3/58

4

Table of Contents

A00reviations and Acronyms///////////////////////////////////////////////////////////////////////////////////////////////////////////////////2

(a0le of Contents////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////4

&ist of (a0les /////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// 5

&ist of Figures ////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// 6

Chapter )/ )ntroduction///////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////7

Chapter ))/ %harmaceutical 8ector Conte"t////////////////////////////////////////////////////////////////////////////////////////////// 9

Chapter )))/ +evie of the Botika ng Barangay %rogram ///////////////////////////////////////////////////////////////////////// -9

Chapter )/ +evie of the Botika ng Bayan %rogram //////////////////////////////////////////////////// ///////////////////////// 44

Chapter / +evie of the %-.. (reatment %ack %rogram////////////////////////////////////////////////////////////////////// 49

Chapter )/ +evie of the Drug )nventory $anagement 8ystem 8upporting the #overnment

%harmaceutical %rograms////////////////////////////////////////////////////////////////////////////////////////////////////////////5:

Chapter ))/ +evie of %)(C $andate and %erformance/////////////////////////////////////////////////////////////////////////;-

+eferences //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// ;6


4/58

5

List of Tables

(a0le -/ %rice Comparison of (hree 8elected Drugs in the %hilippines1 )ndia1 and

%akistan1 2..://///////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////9

(a0le 2/ %rice Comparison of Four 8elected Drugs in the %hilippines and )ndia1 2.-.1

2.-.////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////9

(a0le 4/ $edian $edicine %rice +atios for )nnovator Brands and (heir #eneric !=uivalents in the

%hilippines1 in %u0lic and %rivate 8ectors1 2..21 2..;1 and 2..:?.9 ////////////////////////////////////////////////////// -.

(a0le 5/ %ercent of 838 8urveyed Filipino Households 3ho +eported the %urchase of #eneric and

Branded $edicines1 2..4 and 2..:///////////////////////////////////////////////////////////////////////////////////////////////////////--(a0le ;/ Num0er of Days that a &oest@%aid #overnment !mployee Needs to 3ork to %urchase One

Days 3orth of #eneric $edicine1 0y (ype of Condition1 2..9///////////////////////////////////////////////////////////////--

(a0le 6/ 'r0an and +ural %oor Households 3ith and 3ithout Health )nsurance Based on Data Derived

from %ro"y $eans (est//////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////-4

(a0le 7/ alue of %arallel Drug )mports1 in '8 $illion1 2... to $arch 2.-. ///////////////////////////////////////// -7

(a0le :/ BnBs 0y 8ite1 2..9////////////////////////////////////////////////////////////////////////////////////////////////////////////////////2-

(a0le 9/ +egional Distri0ution of BnBs and %opulation?BnB in !ach +egion1 2..9 ///////////////////////////////// 22

(a0le -./ 8elling %rice of 8elected Drugs Beteen BnB and a &eading %rivate Drugstore Chain1 une 2..6

//////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////2;

(a0le --/ %rice Comparison of +etail %rices Beteen the BNB and (he #enerics %harmacy1 as of April2.-.//////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////2;

(a0le -2/ 8elling %rice of 8elected Drugs Among BnB1 %rivate #eneric1 Branded #eneric1 and

)nnovator Drugs1 2..9///////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////27

(a0le -4/ %rice ariations of (hree %rescription and (hree Over@the@Counter Drugs in BnBs1 2..9 /////// 27

(a0le -5/ Num0er of BnBs 0y 8ponsoring Organi,ation or )ndividual1 2..9//////////////////////////////////////////// 2:

(a0le -;/ Functionality of BnBs using Alternative Definitions1 2..9 /////////////////////////////////////////////////////// 29

(a0le -6/ &evel of #ross 8ales of BnBs1 2..9//////////////////////////////////////////////////////////////////////////////////////////4.

(a0le -7/ %roposed Design for an )mpact !valuation of BnB and BNB //////////////////////////////////////////////////// 42

(a0le -:/ Num0er of BNB Outlets 0y +egion and %opulation?BNB1 2.-.////////////////////////////////////////////////4;

(a0le -9/ (ypes of BNB 0y $aor )sland #roup and Num0er of BNB 3hich Have Closed1 as of [email protected](a0le 2./ !stimated Annual %roected $arginal 8tatement of Operations1 in %hp////////////////////////////////// 47

(a0le 2-/ Drugs )ncluded in the %-.. %rogram and %eso 8avings %er (reatment %ack +elative to the

Common Brand1 2.-.////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////49

(a0le 22/ %rice Comparison of %-.. (reatment %ack ith !=uivalent Common Brand in Oriental

$indoro %ilot and Overall DOH1 2..9////////////////////////////////////////////////////////////////////////////////////////////////////5-

(a0le 24/ Funding of (reatment %ack %rogram 0y (ype of +ecipients and Classification of Households/ 55

(a0le 25/ %)(C %rocurement and Distri0ution %rocess for the BnB %rogram ////////////////////////////////////////// 59

(a0le 2;/ %roposed Ne %rocurement 8ystem for the %-.. %rogram//////////////////////////////////////////////////// ;.


5/58

;

(a0le 26/ ariation of Actual %rocurement %rice of #eneric Amo"icillin and +anitidine at !ach

%rocurement !ntity in NC+1 +egion )@A1 and +egion )@B1 2..: //////////////////////////////////////////////////////////// ;2

(a0le 27/ %rice Comparison of a 8ample of !ssential $edicines Among %)(C #eneric1 Branded #eneric1

%rivate@8ector #eneric1 and )nnovator Drugs1 2..9////////////////////////////////////////////////////////////////////////////////;2


6/58

6

List of Figures

Figure -/ +atio of %hilippine %rice to )ndia %rice for 8elected $edicines1 2..5 and 2.-.//////////////////////// -.

Figure 2/ %ercentage of Household Cash 8pending on Drugs to (otal Household 8pending for $edical

Care1 in )ncome Deciles1 2..6////////////////////////////////////////////////////////////////////////////////////////////////////////////////-2

Figure 4/ $a"imum1 Average1 and $inimum %rices of 8elected Fast@$oving Drugs in the %hilippines 1 $ay 261 2.-. ///////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////-;

Figure 5/ +etailing of %arallel Drug )mports in the %hilippines//////////////////////////////////////////////////////////////// -6

Figure ;/ Annual and Cumulative Num0er of BnBs !sta0lished1 2..4 2.-.///////////////////////////////////////// 2.

Figure 6/ %ercentage of Barangays 3ith a BnB1 0y +egion1 as of $ay 2.-.//////////////////////////////////////////// 24

Figure 7/ Annual and Cumulative Num0er of BNBs !sta0lished1 2..; 2.-. //////////////////// 4;

Figure :/ Num0er of BNBs 0y +egion1 in #ross Num0ers1 as of $ay 2.-. /// (rror) Bookmark not defined#

Figure 9/ %ercentage of Cities and $unicipalities 3ith BNB1 0y +egion1 as of $ay 2.-. ////////////////////////46


7/58

7

Chapter I. Introduction

*# %+ectives of the Study

(his study forms part of a0out a do,en assessments of specific policy and programmatic interventions

that the Department of the Budget and $anagement commissioned to the %hilippine )nstitute

for Development 8tudies in Fe0ruary 2.--/ (he analyses are intended to 0e used as 0ackground

papers for the possi0le restructuring and 0udget allocations of these government programs/

(his study aims to assess three discrete government programs designed to loer the cost of medicines

in the %hilippines the Botikang Barangay 1 the Botikang Bayan 1 and the %-.. treatment pack

programs1 and the mandate and role of the %hilippine )nternational (rading Corp/ in these

programs/

(hese interventions form part of a much0roader Cheaper $edicines %rogram of the government

hich consists of a range of policies and regulations designed to loer the cost of medicines and

improve peoples access to them/)n chronological order1 the DOH has formulated the folloing relevant

C$% policies and regulations

(he #enerics Act of -9:: aimed to promote1 re=uire1 and ensure ade=uate supply1distri0ution1 use and acceptance of drugs and medicines identified 0y their genericnames/8u0se=uently1 DOH issued the implementing guidelines for the e"clusive use of generic

terminology in all prescriptions and orders in all DOH hospitals /

!/O/ 591 s/ -994 directed the mandatory use of the %hilippine National Drug Formulary asthe 0asis for the procurement of drug products 0y the government/ A/O/ -:1 s/ 2..61 contained

the implementing guidelines for the %NDF system/

+/A/ 7;:-1 the %rice Act1 mandated the DOH as the lead agency in identifying essential drugs as0asic necessities and in monitoring their corresponding prices/ Folloing this la1 DOH issued

the guidelines for DOH retained hospitals to engage in holesale procurement and distri0ution

of essential drugs Gthe guidelines for drug consignment in governmenthospitals G and the revised policies and guidelines for the institutionali,ation

and decentrali,ation of the DOH drug consignment system/

A/O/ 91 s/ 2..6 provided the guidelines for institutionali,ing and strengthening the !ssential Drug%rice $onitoring 8ystem Gthe use of the Drug %rice +eference )nde" as a guide to

rational drug selection and drug pricesG and the use of the +eference )nde" as the 0asis for

reim0ursing drugs and medicines in hospital claims/


8/58

:

D/$/ 9:1 s/ 2..5 provided the guidelines for enhancing the informational transparency on thetransactional visits of sales and medical representatives in all DOH facilities/

+/A/ 9;.2 of 2..:1 the Cheaper $edicines Act1 is intended to achieve universally accessi0le andcheaper and =uality medicines 0y pursuing an effective competition policy in the

pharmaceutical sector/ (he %resident su0se=uently issued an e"ecutive order re=uiring

ma"imum retail prices for a num0er of drugs/

+/A/ 97-- of 2..:created the Food and Drug Administration from the former Bureau of Foodand Drugs1 and conferred upon it much 0roader regulatory poers/

B# Scope and %rgani'ation of the Report

(his study focuses only on the operations of the BnB1 BNB1 and %-.. treatment pack programs/ )t does

not assess the much larger policies on parallel drug importation and the generics drugs la on

hich these programs depend/ )t also does not assess the impact of the #overnment $ediated +etail

%rice


9/58

9

Chapter II. Pharmaceutical Sector Context

*# %verwhelming Role of the Private Sector

8ales of pharmaceuticals in the %hilippines are conservatively estimated at %hp-.. 0illion annually1 ith

7. percent 0eing accounted for 0y multinational firms / According to %HA% data 1 a0out :. percent of the sales are in drug stores1 -. percent in hospitals1 and -. percent in other

retail outlets/ Out of total sales1 64 percent comes from a maor pharmaceutical chain1 -7 percentcomes

from the com0ined sales of all other small independent pharmacies1 7 percent comes from private

hospitals1 2/; comes from pu0lic hospitals1 -. percentcomes from other private outlets1 and ./; percent

comes from other pu0lic outlets/ (hus1 the private sector as a hole holds an inordinate share of the

market 1 hile the pu0lic sector is a very minor financier and purchaser/

Drugs are a re=uirement for almost all modern health care/ Drugs account for a0out half of household

health spending among Filipinos/ Although pharmaceutical reim0ursements of the social health

insurance program remain small relative to its mem0ers needs1 they already account for 4.

percent of its total payouts/(here remains a large unmet need for drugs hich has not 0een =uantified

/

B# Country of (-pensive Drugs

Drugs in the %hilippines are more e"pensive than in other countries in Asia1 and in countries of similareconomic status/ (his has 0een repeatedly shon in studies1 e/g/1 Business $eridian )nternational1 as

cited in B)*C&)+ in (a0le - and &avado in (a0le 2/ Drug prices of 0rand names in the

%hilippines are anyhere from ; to 4. times more e"pensive than similar 0rand names of similar

manufacturers in )ndia and %akistan/ (his is the strongest factor that impelled the government to

institute a parallel drug importation policy under the Cheaper $edicines %rogram/

"a+le # Price Comparison .in Peso (/uivalent0 of "hree Selected Drugs in the Philippines, India, and

Pakistan, 1!!2

Brand Name $anufacturer %rice in the

%hilippines

%rice in )ndia

%rice in

%akistan

+atio

+atio

Norvasc %fi,er 5;/.. ; n?a 9/. @

entolin #8 4-;/.. -24/.. 62/.. 2/6 ;/-

)mmodium ansen -./.. 4/.. -/:. 4/4 ;/6

8ource Business $eridian )nternational1 as cited in B)*C&)+ /

"a+le 1#Price Comparison .in Peso (/uivalent0 of &our Selected Drugs in the Philippines and India,

1!!, 1!!

Brand Name $anufacturer %rice in the %rice in +atio


10/58

-.

%hilippines

)ndia

Buscopan1 -. mg?ta0 Boehringer -;/:4 -/92 :/2

%onstan1 ;.. mg?ta0 %fi,er 2;/77 2/96 :/7

Adalat +etard1 2. mg?ta0 Bayer 54/5; -/55 4./2

Bactrim1 5.. mg?:. mg ta0 +oche -:/-6 ./;6 42/5

8ource &avado 1 0ased on Online $)$8 %hilippines 2.-.1 http??/mims/com?inde"/asp" G

C)$8 )ndia 2.-.1 http??/mims/com?inde"/asp"

$ore distur0ingly1 the trend is not improvingG in fact1 it is orsening1 at least until after the imposition

of the #overnment $ediated Access %rice in 2.-./ As (a0le 4 shos1 the ratio of local median

prices to international reference prices especially for innovator 0rands1 in 0oth pu0lic and

private sectors1 rose in most of the past decade/ )ndeed1 the ratios of %hilippine price to )ndia price for

all the four 0randed drugs considered in Figure - rose from 2..5 to 2.-./

"a+le 3# Median Medicine Price Ratios for Innovator Brands and "heir $eneric (/uivalents in the

Philippines, in Pu+lic and Private Sectors, 1!!1, 1!!4, and 1!!25!6

(ype 8ector 2..2 2..; 2..; 2..:?.9 2..:?.9

%u0lic -:/25 -;/4- -5/-9 4./24 26/44)nnovator

Brand %rivate -;/9; -7/2: @ 47/-. @

%u0lic @ 6/5. ;/-5 9/7: 7/97#eneric

!=uivalent %rivate :/46 -7/76 ;/65 @ -./76 @

8ource 2..2 data are from Health Action )nformation Netork and 2..; data are from the

)nstitute of %hilippine Culture 1 as cited 0y Batangan and u0an /

&igure # Ratio of Philippine Price to India Price for Selected Medicines, 1!!7 and 1!!

8ource &avado


11/58

--

#ains have 0een achieved in the production and consumption of generic drugs1 folloing the enactment

of the #enerics Act in -9::/ )n the first@ever #enerics 8ummit held in 8eptem0er 2..:1 as many as 2:

generic@drug companies ere given =uality seals for good manufacturing practicesG the num0er of #ood

$anufacturing %ractice compliant firms has since increased to ;41 though a larger num0er offirms continues to operate ithout having yet complied ith #$% standards/ Nonetheless1 the larger

firms manufacturing prescription drugs no meet #$% standards/

(oday1 it is claimed that ;@6 out of -. Filipinos no purchase generic drugs/ As (a0le 5 shos1 an

increasing proportion of Filipinos are no 0uying cheaper generic drugs1 and the proportion of

households ho did not 0uy medicines has declined significantly/DOH has mandated all

government health orkers to use only generic terminologies in drug purchasing1 prescri0ing1

dispensing1 and reim0ursement/ +eports indicate that generic manufacturers no sell at prices ;;@:.

percentloer than their 0randed counterparts/

"a+le 7#Percent of S8S Surveyed &ilipino 9ouseholds 8ho Reported the Purchase of $eneric andBranded Medicines, 1!!3 and 1!!2

(ype of $edicines 2..4 2..:

#eneric medicines 57 ;;

Branded medicines 46 4:

Did not 0uy medicines -7 7

8ource 8ocial 3eather 8tations/

Hoever1 even the cheapest generics in the %hilippines still sell at a high multiple of international

reference prices/ (he case is even orse for originator drugs/ (hus1 afforda0ility of drugs remains a

serious pro0lem/ (he 3HO survey of patients in health facilities in 2..9 defined afforda0ility as the

num0er of days ages that the loest@paid government employee needs to purchase standardtreatments for selected conditions/ (he results1 shon in (a0le ;1 indicate that drugs remain prohi0itive

for the loest@earning householdsG this means that drugs are even more prohi0itive for the unemployed

and indigent/

"a+le 4# :um+er of Days that a ;owest


12/58

-2

(o economi,e on going to the doctor or other health orker1 Filipinos commonly resort to self@

treatment or self@prescription/ )n the 3HO household survey1 over half of the medications taken in

acute illness ere self@prescri0ed or prescri0ed 0y a non@health professional/ Of course1 this practice of

self@treatment creates its on pro0lems1 including possi0le improper medication1 and drug resistance inthe case of use of anti0iotics/

(he household afforda0ility of medicines is particularly acute for sufferers of chronic and de0ilitating

illnesses re=uiring maintenance drugs/ A study on dia0etes care in the country shoed

that there are very fe sustaina0le measures for the maintenance of regular medications of dia0etics

0ecause of personal cost constraints1 hich leads to irregular treatment leading to more e"pensive

complications and hospital admissions later/

C# "he%nus of Payment for Drugs is on 9ouseholds

Households spend a significant percentage of medical care on drugs1 and poorer households tend tospend a larger share of their medical care costs on drugs than richer households do / During

the year1 the poorest households spend on average more than half of their medical care

costs on drugs/ For the richest households1 this proportion is only 5- percent/ (hus1 relative to their

income and medical care costs1 the poor 0ear a heavier load on drug costs than do richer households/

&igure 1# Percentage of 9ousehold Cash Spending on Drugs to "otal 9ousehold Spending for Medical

Care, in Income Deciles, 1!!>

8ource Family )ncome and !"penditures 8urvey 2..61 as cited 0y Ban,on /

3hy do drugs take up a large proportion of household medical care costs1 especially among the poorJ A

primary reason is the a0sence or eakness of risk pooling/ $any of the poor1 especially those in the

informal sector1 are not in any health insurance risk pool1 such as %hilHealth1 private health insurance1 or

community1 '1 or other micro@insurance programs $oreover1 even if they ere in a risk


13/58

-4

pool1 outpatient drug purchases are typically not a covered 0enefit in such risk pools1 including

%hilHealth/

"a+le ># ?r+an and Rural Poor 9ouseholds 8ith and 8ithout 9ealth Insurance Based on Data Derived

from Pro-y Means "est

(ype of Health )nsurance National Capital +egion

'r0an %oor

+ural %oor

%hilhealth or other social health insurance 2;/. 2./;

H$O insurance ./2 ./2

Cooperative health insurance ./2 ./6

Other health insurance 5/. 5/.

No health insurance 7./. 7;/.

8ource Cited 0y Ban,on1 2.-.

As for inpatient %hilHealthdrug 0enefits1 poor purchasing practices

often lead to 0loated costs/ (he a0sence of drugs in many government hospitals also forces households

to 0uy in private pharmacies as out@of@pocket spending/ (hus1 the to long@standing pro0lems related to

this issue are

No capitation for primary care/ (he lack of a capitation system to pay for primary care providersis a severe shortcoming as :9 percent of pharmacy sales are made on outpatient settings/

No case@0ased payment for hospital care/ 'nder fee@for@service system ofpaying providers1 private hospitals and physicians have little incentive to use cheaper drug

alternatives 0ecause the higher their value of claims1 the morereim0ursements they o0tain1 and the 0etter off they ould 0e/

D# &actors *ffecting Drug Prices

$ost drug ingredients in the %hilippines are imported/ $ost local drug manufacturing is through a toll

system1 a version of contract manufacturing here production is outsourced 0y an originating company

to third parties/ A0out :. percent of toll manufacturing 0y multinational companies is done 0y )nterphil

&a0oratories1 a sister company of *uellig%harma1 hich itself accounts for a0out :. percent of holesale

distri0ution /

Another key factor in the local pharmaceutical market is the overhelming share of 0randed medicines/Before the end of the previous decade1 the overhelming demand for drugs is for originator 0rands and

K0randed genericsLG true generics accounted for a very small percentage of sales1

hereas it accounted for as much as ;. percent of the '/8/ market / (his is counter@

intuitive in light of the already off@patent status of many of the essential drugs in the %hilippines/

&ack of household knoledge of drugs1 pervasive marketing and advertising1 the strong role of medical

representation in the sale of drugs1 and the incentives given to prescri0ing doctors have 0een fre=uently

cited as contri0uting to the persistence high drug prices and the high consumption of 0randed drugs in

the country/ But perhaps the most important factor is the sheer lack of supply of generic alternatives to

households anting them1 a situation that persisted until past the middle part of 2...s hen generics


14/58

-5

finally emerged on their on1 thanks in part to the initiatives that ill 0e revieed in this report /

Ball and (isocki undertook a study in three regions of the country to e"amine the pricecomponents for originator 0rands and a generic version of si" medicines1 namely cotrimo"a,ole1

coamo"iclav1 atenolol1 gli0enclamide1 amlodipine1 and atorvastatin/ (he study covered pu0lic hospital

pharmacies1 chain and independent retail pharmacies1 and village pharmacies in

three regions/ (he selling price to patients as determined at each outlet and then the price as traced

0ack through the supply chain through distri0utors to manufacturers or importers1 using invoices and?or

other documents from hich validated data could 0e o0tained/ (he results of the study indicate the

folloing

Highly concentrated market structure and product segmentation +icher Filipinos tend to use

originator 0rands and K0randed genericsL sourced from private drugstores and hospitals1 hile poorer

Filipinos rely to a greater e"tent on loer@priced generics sourced from pu0lic facilities and communityoutlets/ $iddle@class Filipinos tend to follo richer Filipinos use of originator 0rands and K0randed

genericsL 0ut ith greater use of pu0lic facilities/

(he dominance of e"pensive originator 0rands and K0randed genericsL among upper@class Filipinos is

due to a num0er of factors including strong marketing 0y dominant manufacturers and support of their

products 0y prescri0ing physicians incentivi,ed 0y medical representativesG lack of competition from

pu0lic and N#O outlets hich concentrate on provision of loer@priced generics to the poorG

information im0alance among patients relying on physician advice and lacking knoledge of competing

productsG and inade=uate assurance of =uality of generics 0y the Food and Drug Administration leading to popular dou0ts a0out the 0ioe=uivalence of generics to more e"pensive

originator 0rands or K0randed generics/L

High retailer markups For generic products1 markups ranged from ; 4;; percent at the retailer

level1 and -: --7 percent at the distri0utor level/ For originator 0rand products1 markups ere

relatively loer at private retail pharmacies/ Hoever1 a large chain pharmacy had

markups that ranged from 2 6. percent/

Cost@increasing value@added ta" A( is charged at a rate of -2 percent hich the patient has

to pay/ (he original A( is incurred at the first stage of the supply chain1 and distri0utors and retailers

often charge their markup 0ased on the A( inclusive price rather than on the cost e"cluding A(/ (his

practice ratchets up the price paid for 0y the patient/

Adverse effect of senior citi,ens discounts 8enior citi,ens are eligi0le for a 2. percent discount onthe retail price of medicines/ 3hile retailers could offset some of this cost through their A(

returns1 there is no specific 0udgetary provision for this1 so the remaining -4 percent has to 0e recouped

0y retailers through increased prices to all patients/

Discount schemes (o promote their corporate image1 pharmaceutical companies and retailers have

resorted to loyalty cards that provide discounts and there0y incentivi,e customers to purchase a

particular 0rand or to 0uy from a particular store/ (hese programs are often accompanied 0y patient

assistance schemes that in turn channel consumers to the promoted products/ (he discount programs

of %fi,er and $ercury Drug have 0een the most visi0le in this regard/ 3hile there are certain positive


15/58

-;

features in such programs1 they also tend to irrational medicine selection 0y patients or their physicians1

and could discourage them from looking at other alternative drugs/

(hrough a com0ination of the a0ove factors1 there is a noticea0le large variation in the prices of fast@

moving drugs in the %hilippines1 as shon in Figure 4 / 8ome outlets charge as much as 2

or 4 times the price of similar drugs in other outlets/

&igure 3# Ma-imum, *verage, and Minimum Prices of Selected &ast, 1!!

Note Only average prices ere la0elled/

8ource &avado1 2.--1 0ased $)$8 %hilippines data retrieved on $ay 261 2.-./

(# Recent Policies to ;ower the Prices of Medicines

-/ Parallel Drug Importation@ (he Botikang Barangay 1 the Botikang Bayan as ell as the

%-.. program rely crucially on the parallel drug importation / )n 2...1 the DOH initiated %D) as aninnovative strategy to cut costs of medicines/ %D) involves the importation into the country of a

patented drug from a third country ithout the authori,ation of the patent holder


16/58

-6

$anagement 'nit claimed that %D) imports achieved an estimated average of 6./9 percent price

reduction of drugs in 2..51 much higher than the targeted ;. percent reduction 0y 2.-./ (he prices of

essential medicines further decreased 0y an average of 5- percent in 2..; and again in 2..6 /

&igure 7#Retailing of Parallel Drug Imports in the Philippines

's can also directly purchase %D)s/ )ndeed1 in the early 2...s1 the provinces of Capi, and Negros

Oriental placed orders for %D)s/ )n the case of Capi,1 the %rovincial #overnment even 0ecame the market

leader1 forcing private drugstores to reduce their prices /

3hen the BnB and BNB emerged in the [email protected] they 0ecame the primary retailers of %D) drugs/ (he

Cheaper $edicines Act also allos the retailing of %D) drugs to the private sector1 0ut in an assessment

of the 0usiness climate in the health sector1 B)*C&)+ pointed out that %D) drugs are retailed only

in BnB1 BNB 1 not in private outlets/ At that time1 most BNBs ere

still N#O operations/ &ately1 hoever1 there has 0een interest among for@profit 0usinessenterprises to 0ecome BNBs1 and most BNBs are no for@profit private enterprises/

Hoever1 in hindsight1 the overall si,e of %D) procurement has 0een very small relative to the total

pharmaceutical sales in the %hilippines/ )n the decade 0eteen 2... and $arch 2.-.1 the %hilippine

government imported only '8 :/7:9 million of %D) drugs


17/58

-7

"a+le @/ alue of %arallel Drug )mports1 in '8 $illion1 2... to $arch 2.-.

Eear Annual )mports also knon as government mediated

access prices for selected medicines that address some diseases hich are common causes of

mor0idity and mortality in the country/ (he !/O/ covered only five active pharmaceutical ingredients

including some antihypertensive1 anti0iotics1 and anti@neoplastics?anti@cancer/

At the same time1 some manufacturers negotiated ith the government to reduce prices of selected

products voluntarily1 rather than fall under mandatory price regulation/ (he DOH approved voluntary

price reductions of up to ;. percent for -6 molecules in August 2..91 and a

further 97 products in 2.-./ Hoever1 voluntary price reductions apply only to the products of

participating manufacturers1 not to alternative suppliers of generic su0stitutes/ (he DOH hasesta0lished a process for monitoring and evaluation of the impact of these measures/

)nitial feed0ack has identified a num0er of concerns the selection of products for price restraint does

not follo rational selection principles


18/58

-:

medicines 0ecause they apply to specific manufacturers onlyG and in aggregate1 the medicines falling

under the scheme account for a relatively limited share of the market/


19/58

-9

Chapter III.evie! of the "oti#ang "arangay Program

*# Program Description

(he village drug outlethas had a checkered history in the %hilippines/ )t as knon as KBotikasa

BarangayL in the -97.sG faded out of the scene in the -9:.s and -99.s -G selected 0y the

CHD concernedG approved 0y the %harma ;. %roect hich as purposely set up to manage the 8ONA

pledgeG and licensed 0y the Bureau of Food and Drugs 1 no knon as the FDA/All BnB drugs pass

through the =uality control and product registration standards of the FDA/

(he BnBs ere mandated to sell lo@priced generic over@the@counter drugs and1 originally1 2

prescription drugs /&ater1 the num0er of drugs as increased1 ith each

BnB0eing a0le to sell a selection from a list of around 4; O(C generic medicines and household

remedies1 and 7 prescription drugs/ (oday1 BnBs can sell up to 5. essential O(C drugs and :

prescription drugs /

(he rest of the DOH A/O/ defines the general and specific guidelines ith respect to handling

procedure for the initial deliveries of drugs procured through the %)(CG BnB responsi0ilities of

proponent 'sG stocks replenishment orders from the BnBsG BnB supplier eligi0ility and

accreditationG BnB drug price determination for stock replenishmentsG fund management

conditions for the BnBsG rational drug useG and proect monitoring/

B# Program Performance

1. Extent of BnB and the poors access to them Figure ; shos the impressive groth of BnBs since

the program as launched/ )t has 0een estimated that a typical BnB serves around ;.. people per

month / (his means that the -614;.BnBs in e"istence 0y the end of 2.-. serve a0out :/2

million people a month1 or a0out :/7 percent of the countrys population/ )t is difficult to estimate the

-(his as the original intention1 0ut as ill 0e shon 0elo1 the BnBs have evolved such that most of the

sponsoring organi,ations no are actually private entities/


20/58

2.

num0er of Filipinos they serve each year1 0ecause some of the clients certainly ill have repeat

purchases throughout the year/

&igure 4#*nnual and Cumulative :um+er of BnBs (sta+lished, 1!!3A 1!!

Note 2..7 data ere not availa0le/

By the end of 2.-.1 a total of -614;. BnBshad 0een esta0lished nationide1 including those of toN#Os /Official reports sho that the original target of - BnB per 4 0arangays as achieved one year early

/

(he ne target has 0een set at -2 for all 0arangays/ Based on this ne target1 a survey done under the

auspices of the !uropean 'nions

/ An additional half are found in 0arangay health stations1 0arangay halls1 or sari@

sari stores/ $ore than half of them are ithin ; minutes of alking distance to the

nearest health facility hile another 2; percent are ithin 4. minutes

alking distance/ Only around -9 percent of the BnBs are an hour or more of alking distance from an

+H'/ On the 0asis of these findings1 it can 0e concluded that the e"isting BnBs are accessi0le to their

rural clients/


21/58

2-

"a+le 2#BnBs +y Site, 1!!6

8ite No/ of BnBs %ercent

+esidence -2. 44

Barangay health station 6: -9

Barangay hall ;7 -6

8ari@sari store ;- -5

+ural health unit 9 2

$unicipal hall - Negl/

Others ;6 -;

(otal 462 -..

Note (he 462 total represents only the functional BnBs/

8ource reeke1 et al/1 2..9

Although there has 0een nota0le achievement in the groth of BnBs1 their geographic distri0ution

across the country has not 0een as e=ually impressive/ 'sing population?BnB ratio1 (a0le 9and Figure ;

sho that the regions orst served ith BnB also tend to 0e the poorer ones1 e/g/1 A+$$ 1 Bicol 1 8occsksargen 1 and $imaropa /

%rovincial distri0ution is even more striking1 ith the poorest provinces such as Basilan1 8ulu1 &anao del

8ur1 (ai@tai1 Compostela alley1 8u=uior1 Batanes1 and $arindu=ue ithout BnB as late as 2..9/ (he

other poorly served provinces are Nueva i,caya 1

Al0ay 1 8orsogon 1 8i=uior 1 and Catanduanes / 8even years after the program as initiated in 2..-1 -; of the 5. poorest tons still do nothave BnBs /

BnBs ina0ility to penetrate =uickly into the poorest areas1 hich as the original intention of the

program1 is due to the fact that DOH is not directly involved in determining and setting up BnB outlets/

BnBs are largely a local initiative of the 's and community organi,ations ith support from the DOHs

regional Centers for Health Development/

(he a0sence of BnB in a poor locality may also 0e due to the scarcity of supervising pharmacist ho

ants to ork in the area/ According to DOH rules1 only a supervising pharmacist is authori,ed to

dispense prescription drugs/ (he %harmacy &a also re=uires the presence of a pharmacist in a

drugstore or retail outlet/

(he continued supply of drugs after the initial stock has run out has 0een a maor pro0lem/ CHD

intervies indicate that hile the BnBs ere originally conceived to operate as drug revolving funds1

ith the funds managed at their respective CHDs1 this 0usiness format has not 0een folloed/ (hus1

there has 0een a eak reflo of funds/ $oreover1 each BnB has 0een left to itself to locate its on

source of supply/ )n some instances1 the BnBs have sourced their drugs from private distri0utors and

retailers 1 thus increasing their costs1 and the prices faced 0y consumers/ (he

pro0lem seems to 0e of economies of scale1 i/e/1 individually1 each BnB is too small to arrant a regular

visit from a supplier1 especially if the BnB is in a far@flung area/


22/58

22

"a+le 6#Regional Distri+ution of BnBs and Population5BnBin (ach Region, 1!!6

+egion Num0er of

BnBs

Num0er of BnBs

%opulation in

$n

%opulation?BnB

) )locos -1.-9 -17-4 5/6 5156-

CA+ Cordillera A+ 546 7.2 -/; 415::

)) Cagayan alley 52- ;-4 4/- 7125:

))) Central &u,on -162; -1:24 9/7 ;19:2

NC+ $etro $anila ;45 757 --/6 2-164;

)A Cala0ar,on -14.5 -16-5 --/7 9/.

)B $imaropa 7;. :6. 2/6 415-4

Bicol 464 ;42 ;/- -51.77) 3estern isayas -1;5: -1642 6/: 5152-

)) Central isayas ;-9 ;9; 6/5 -21429

)) !astern isayas 674 99; 4/9 ;1:-5

) *am0oanga %eninsula ;4; 745 4/2 61.4:

Northern $indanao :22 -1.74 5/. 51:.:

) Davao 6.7 :69 5/2 61:5:

)) 8occsksargen 4;7 456 4/: -.1726

Caraga 4;5 7-2 2/4 61579

A+$$ 277 4-- 5/- -51:77

8u0total -21-55 -;177- ::/6 71295

a0alikatngBotikaBinhi :92 -.6 @ @National %harmaceutical

Foundation

562 574 @ @

#rand total -4159: -614;. ::/6 61;62

8ource of 0asic data DOH G Depano G last column as calculated 0ased on the ra data of

DOH/

A system of pooling drug re=uirements to achieve economies of scale remains to 0e orked out/

Hoever1 DOH@NC%A$ staff opine that central pooled procurement ill 0e difficult for the reorders

0ecause of the large num0ers of BnB and communication challengesG the different procurement

cycles of BnBs 0ecause of their variations in demand and sale patternsG and the so@far non@e"istent )(

technology needed that is a0le to respond =uickly to the re=uirements of BnBs1 securing orders1 anddelivering the products to them/


23/58

24

&igure ># Percentage of Barangays 8ith a BnB, +y Region, as of May 1!!

Note (his figure does not contain data for 7 regions as they are not availa0le in the level of

disaggregation needed/

8ource &avado1 2.--

. !ational drug use One BnB analyst has raised issue ith the choice of drugs included in the BnB in

relation to the 0urden of disease in the country/ DOH uses the top causes of mortality and mor0idity as

0asis for the choice of drugs/ 3hile this may seem accepta0le at first 0lush1 it does not have sound

technical mooring as disease 0urden should 0e calculated 0ased on disa0ility adusted life years 1

hich is the glo0ally accepted methodology/ DA&Es take account of the num0er of people ho died or

got sick of the disease 1 as ell as the period of time that people

got sick and the severity of the disease/ ery fe DA&E studies have 0een done

in the %hilippines1 mostly as graduate theses/ (he DOH is ust 0eginning to get into this type of analysis/

)n any case1 hile the 0urden of disease averted 0y BnB drugs looks large from a simple mortality and

mor0idity reckoning1 it may not 0e so if reckoned in terms of DA&Es/

Drugs sold 0y BnBs are all approved 0y FDA1 0ut they stock only a small num0er of the list of products

needed for pu0lic health/ (hese include over the counter medications for minor illnesses such as

diarrhea1 dehydration1 stomach acidity1 coughs and di,,iness/ (o anti0iotics ere included hen the

program started / Five prescription drugs for chronic diseases ere

added in 2..; metformin and gli0enclamide for dia0etesG metropolol and captropil for cardiovascular

diseasesG and sal0utamol for respiratory illnesses/

Hoever1 BnBs do not carry drugs for common diseases such as malaria and (B/ (hese conditions are

deemed more complicated and re=uire professional consultationG the non@inclusion in the BnB drug list

implies that self@treatment is not encouraged/


24/58

25

BnBs ought to 0e monitored regularly 0y a licensed pharmacist1 0ut the lack of availa0le pharmacy staff

has turned this into a maor pro0lem /(he !' BnB survey noted that regulatory supervision

0y a supervising pharmacist is hardly taking place / 8ome deem the lack of regular

pharmacist supervision and lack of linkage to primary care facilities as limiting most BnBs potential toprovide access to prescription medicines for chronic conditions/ (he linkage to an +H'1 hoever1 is not

a physical@distance pro0lem as they are close to most BnBs1 0ut rather a coordination pro0lem/

)n any case1 a significant proportion of BnBs


25/58

2;

leading drugstore chain does not2/ (hus1 this ta0le should only 0e used to compare the prices that the

household faces in either BnB or the drugstore chain1 not to compare economic efficiency of the to

sources/ (his issue is discussed in the ne"t section/

"a+le !#Selling Price of Selected Drugs BetweenBnB and a ;eading Private Drugstore Chain, une 1!!>

#eneric Name and Dosage BnB &eading

Drugstore

Chain

%eso 8avings %ercent

%rice

+eduction

Amo"icillin1 2;. mg 24/-5 :./;. ;7/46 7-

Amo"icillen1 ;.. mg 2/.2 7/2; ;/25 72

Cotrmo"a,ole1 :.. mg -/69 -7/;. -;/:- 9.

&operamide1 2 mg -/.; 5/-. 4/.; 75

$efenamic acid1 2;. mg ./:: 4/.. 2/-2 7-

$ultivitamins for adults1 -..?0o" -/7: 5/9; 4/-7 65$ultivitamins for children1 6. m& 27/-- ;:/6; 4-/;; ;5

%aracetamol1 ;.. mg ./56 -/4; ./9. 66

%ovidone iodine -.P sol/1 -; m& 25/4; 49/2; -5/9. 4:

$etformin1 ;.. mg -/6- 4/2; -/65 ;.

#li0enclamide1 ; mg1 -..?0o" ./62 ;/9. ;/2: :9

$etoprolol1 ;. mg -/64 2/6; -/.4 49

Captopril1 2; mg 5/2: :/-; 4/:7 5:

8al0utamol1 2 mg ./46 -/9. -/;5 :-

8al0utamol1 ; m& -9/:4 52/2; 22/54 ;4

8ource +amos

%)(C %harmas on price comparison 0eteen BnB outlets

and (he #enerics %harmacy or (#% in April 2.-. also shos significant cost

advantage of the BnB over (#% in almost all the drugs sold / Note1 hoever1 that this

comparison is 0ased on listed prices1 ith the assumed 4. percentmarkup for BnB outlets an

assumption that often does not hold in reality1 as ill 0e shon in the ne"t section/

"a+le # Price Comparison of Retail Prices Between the B:B and "he $enerics Pharmacy, as of *pril

1!!

%rice Difference#eneric Name Dosage %%)

8elling%rice to

DOH

BnB

+etail%rice4

(he

#enerics%harmacy

%rice

%hp %ercent

Aluminum

Hydro"ide Q

$agnesium

Hydro"ide

22; mg?2.. mg per ; ml

suspension

2./;; 26/72 5;/.. -:/29 5-

2)n the comments provided 0y DOH to the draft report1 DOH staff themselves noted that these comparisons are

not appropriate since the drug outlets already apply a significant margin at retail/4At 4. percent markup/


26/58

26

Amo"icillin

trihydrate

2;. mg?; ml

poder?granules

suspension

24/.. 29/9. 5:/.. -:/-. 4:

Amo"icillin

trihydrate

;.. mg ta0let 24./:. 4/.. 4/.. ./.. .

Ascor0ic Acid ;.. mg ta0let 9;/.. -/25 -/6. ./47 24

Captopril 2; mg ta0let 265/4. 4/55 5/.. ./;6 -5

Cotrimo"a,ole :.. mg sulfametho"a,ole?

-6. mg methoprim ta0let?

capsule

-2;/.. -/64 2/;. ./:: 4;

Ferrous sulfate (a0let e=uiv/ to 6. mg

elemental iron

52/.. ./;; -/.. ./5; 5;

#li0enclamide ; mg ta0let 7./5; ./92 -/-. ./-: -7

&operamide

Hydrochloride

2 mg capsule 7-/5; ./94 -/4. ./47 29

$efenamic Acid 2;. mg capsule?ta0let 66/7. ./:7 -/2. ./44 2:

$etformin ;.. mg ta0let 9./.. -/-7 -/7. ./;4 -

$etoprolol ;. mg ta0let -2./.. -/;6 2/2. ./65 29

$ultivitamins for

children

%er ; ml syrup 2./7; 26/9: 42/.. ;/.4 -6

$ultivitamins for

adults

Capsule -2:/6. -/67 2/-. ./54 2.

%aracetamol 2;. mg?; ml

syrup?suspension

-9/6; 2;/6; 27/.. -/56 ;

%aracetamol ;.. mg ta0let 4;/4; ./56 ./6. ./-5 24

%ovidone iodine -.P solution -7/;. 22/7; n/a/ n/a/ n/a/8al0utamol 2 mg ta0let 44/;. ./55 ./;. ./.6 -4

8al0utamol 2 mg?; ml syrup -5/4. -:/;9 2;/.. 6/5- 26

8ource %)(C %harma1 2.-.

Another analysis compares the selling prices of selected drugs among BnBs and a range of private

suppliers1 namely generic1 0randed generic1 innovator drug e=uivalent1 and discounted innovator drug

e=uivalent / (he results of this relatively more accurate comparison are shon in

(a0le -2/ Of the drugs considered1 only four ere reported for BnBs/ Of these four drugs1 BnBs can claim

to have the loest selling price only for one drug 1 and

even their price advantage over the loest generic is very small/ )n the other three drugs for

hich compara0le data are availa0le1 the BnBs ere outpriced 0y the loest generic supplier/ )ndeed1the innovator drug discount price is even loer than the BnB price for felodipine and amlodipine/ (hese

data suggest that BnBs do not offer the loest price in the market1 even ith the implicit su0sidies they

receive1 e/g/1 parallel drug importation1 logistics support from %)(C and DOH1 and supervision of CHD/


27/58

27

"a+le 1# Selling Price .Php0 of Selected Drugs *mongBnB, Private $eneric, Branded $eneric, and

Innovator Drugs, 1!!6

8elected Drugs BnB &oest

#eneric

Branded

#eneric

)nnovator

Drug

)nnovator

Drug

Discount5

Felodipine -. mg 49/.. 4;/.. 5./.. 77/2; 4:/62

Amlodipine -. mg 47/.. -;/.. -7/;. 77/.. 4./:.

Clindamycin 4.. mg @ :/.. 5-/.. 7-/;. 52/:9

Budenoside @ @ ;6/;. 47./.. @

$ontelukast -. mg @ 5./.. 4:/7; ;-/;. 56/4.

#licla,ide :. mg --/6. ;/:. 5/2; :/2; @

$etformin ;.. mg -/62 -/7. 5/;. --/.. @

(amo"ifen @ @ 4./7; 6-/.. @

8ource DOH

3hy are BnB prices not the loest in the market for compara0le drugsJ A $e(A study conducted 0y HA)

#lo0al in 2..: shoed that BnBs had some of the highest mark@ups even though they

are supposed to have a regulated 4. percentmarkup/ (he authors of this study contend that some of

the high mark@ups ere a result of the BnB having a minimum selling price of %hp - per ta0let?capsule

thus the high markups on medicines costing much less than this and one BnB increased its price of

fast@moving items to recover losses due to e"piry of slo@movers/ )t must 0e noted that BnBs have no

control over the range of products initially supplied and cannot return e"piring products for a

refund/

(he !' survey of BnBs re@affirmed the HA) study findings1 citing operators complaints that the 4.percentmarkup calculation do not seem to have taken into account the actual transport costs 0eteen

the supplier and the BnB/ (he %HOs and CHDs intervieed as key informants also confirmed these

findings/

!ven as some BnB outlets outprice their private competitors1 the ide variation in BnB prices means

that some of them are really pricing ay a0ove the competition/ (he !' survey gathered the prices of

three prescription drugs and the results are shon in (a0le -4/ For amo"icillin1 although the median

price is %hp 4/..1 7. percent of the BnBs surveyed sold it at a price higher than %hp 4/..G indeed1 -.

percent of them sold it as high as %hp 7/.. or more/ 8imilar patterns of pricing occurred for

cotrimo"a,ole and metropolol/

"a+le 3# Price ariations of "hree Prescription and "hree %ver


28/58

2:

%ercent of BnBs ith price 0eteen %hp 4 and 5 2: 2- -2

%ercent of BnBs ith price 0eteen %hp 5 and ; 2- 9 6

%ercent of BnBs ith price 0eteen %hp ; and 6 : 5 6

%ercent of BnBs ith price 0eteen %hp 6 and 7 4 - .

%ercent of BnBs ith price 0eteen %hp 7 and : -. -4 -5


(o 0e fair1 #loor notes that the competition that BnBs?BNBs has 0rought to the domestic

pharmaceutical market aside from the $+%?#$A%@mandated price reduction has 0rought don the

local prices of drugs/ (hus1 the prices of innovator medicines have gone don through their generic

counterparts in BnB?BNB1 or sold 0y the private drugstores throughout the country/ )t is as if the

BnBs?BNBs and private pharmacies selling generics have 0rought don the once@dominant sellers of

innovator drugs1 causing them to loer their prices dramatically/ No1 the ta0le is 0eing turned1 ith

discounted innovator drugs outpricing the BnB?BNBs/ )t must 0e noted at this point that the period

2..9?2.-. as marked 0y high insta0ility in drug prices 0ecause of the com0ined effect of %D)1 thesudden emergence of generic pharmaceutical franchising;1 and the implementation of the $+%?#$A%/

(hus1 the data in (a0le -4 must 0e treated ith caution/

(he BnBs and BNBs role in increasing the contesta0ility of the local drug market is an important role

that the government plays1 even if BnBs?BNBs no have prices that may 0e a 0it higher than alternative

private suppliers/ 8ome =uarters fear that if BnBs?BNBs ithdra completely from supplying the local

market1 private suppliers may raise their prices again to Kpre@contestedL levels/ (his is a strategic

consideration that should 0e taken into account a0out the future of BnBs?BNBs/

C# Program Sustaina+ility

1. &ponsoring organi'ations and functionalit# Although the BnB as originally conceived as an 'initiative1 the !' survey has shon that most of BnBs seen are

actually sponsored 0y private entities or individuals G an additional -- percent are sponsored

0y the 0arangay health orker/ (he minority are sponsored 0y government entities/ )t

appears that BnBs continue to receive support from the ' after a change in administration1 mainly

0ecause they are politically popular/

"a+le 7# :um+er of BnBs +y Sponsoring %rgani'ation or Individual, 1!!6

8ponsor Num0er %ercent

%rivate -52 57

Barangay council ;7 -9

Other 's 4; -2Barangay health orker 45 --

Other government related interests 45 --

(otal 4.2 -..

8ource reeke1 2..9/

Ho many BnBs are functionalJ (he !' survey defined functionality in terms of alternative

indicators1 and these are shon in (a0le -;

;8uch as (he #enerics %harmacy/


29/58

29

(he BnB as open and the operator as present at the time of the survey/ A high :7 percent of the

4.2 BnBs actually visited ere still functional/Of the 45 BnBs that ere no longer functional as of the

date of the survey1 the reasons for closure included no demand for productsG resupply pro0lemsG and

financial difficulties in keeping the 0usiness up/ %olitical interference as cited 0y ust one BnB operator/

Data from NC%A$@DOH sho that since 2..4 hen the BnB program started1 a total of -192. have

closed 1 representing --/7 percent of all BnBs that have 0een esta0lished/ (he regions

ith the highest rates of BnB closure ere A+$$ 1 !astern isayas 1

Cala0ar,on 1 and Central isayas /

8ales are over %hp -:1... per year1 hich is related to the use of the seed capital of %hp 2;1...

over -: months/ &ess than a third meet this functionality definition/

8ales are over %hp -2?person?year/Only a =uarter meet this functionality definition/

(he main management tools of sales 0ook1 inventory register1 and prescription register areavaila0le/Only 7 percent of the BnBs meet this functionality definition1 and only 2 percent are up to date

in their 0usiness data/

"a+le 4# &unctionality of BnBs using *lternative Definitions, 1!!6

)ndicator Num0er %ercent

Open BnB and present operator

@ Functional BnBs 297 :7@ NonfunctionalBnBs 45 -4@ (otal BnBs actually visited 4.2 -..

#ross sales level

@ BnBs ith annual sales I%hp -:1... -.5 27@ BNBs ith annual sales S%hp -:1... -46 4;@ Not reported -59 4:@ (otal BnBs in the original Q su0stituted sample 4:9 -..

%er capita sales level

@ BnBs ith annual per person sales I%hp -2 97 2;@ BnBs ith annual per person sales S%hp -2 -4. 44@ Not reported -62 52@ (otal BnBs in the original and su0stituted sample 4:9 -..

Operational management system

@ BnBs ith annual sales I%hp -:1... Q 4 registers present 26 7@ BnBs ith annual sales I%hp -:1... Q 4 registers present Q up@

to@date data

: 2

@ (otal BnBsin the original and su0stituted sample 4:9 @8ource reeke1 2..9

. (inancial condition(he NC%A$ reports that the BNBs are earning1 and some of the 0est@

practice BnBs have %hp -..1... in their 0ank accounts/ (he typical BnB1 hoever1 is ust struggling

along 1 and a0out half of them reported undesira0le sales figures/

Out of the 25. BnBs ith financial data analysed in the 2..9 !' study1 ;5 percent are deemed

accepta0le or desira0le1 i/e/1 ith sales of at least %hp 251... per annum / Hoever1 almost

half of the BnBs have annual sales figures of %hp 251... hich is deemed undesira0le/


30/58

4.

(hus1 economic via0ility remains precarious for many of the BnBs/ Because of the large variance in

sales1 it has 0een suggested that the package of seed capital given to BnBs 0e customi,ed to the market

and catchment area of the BnB/

"a+le ># ;evel of $ross Sales of BnBs, 1!!6

8ales &evel Num0er %ercent

Desira0le @ 8ales %hp 5:1... and a0ove 44 -5

Accepta0le 8ales 0eteen %hp 251... and 5:1... 97 5.

'ndesira0le 8ales less than %hp251... --. 56

(otal 25. -..


)t is not clear hether the BnB sponsors had any training in financial management and related skills/

8ome o0servers note that the program should not e"pect Barangay Health 3orkers 1 ho manage

most BnBs1 to 0e conversant ith financial management1 since admittedly their training has 0een on

other skills/ For this reason1 it has 0een suggested that BnBs increasingly 0e focused on those ith

entrepreneurial skills and adept at financial management1 such as sari@sari oners/

'nlike BnBs hich are supplied solely 0y %)(C and must pay for every delivery they receive1 (he #enerics

%harmacy does consignment for its franchisees1 hich can also get medicines from other sources/ 'nder

consignment1 the supplier provides an inventory of drugs to a retailer hich pays only the

items that it is a0le to sell/ (his is an important distinction 0eteen BnBs and for@profit franchisees

hich confers on the latter a distinct advantage/ (he #enerics %harmacy also tends to advertise more1

thus attracting more customers/

(he discount given to senior citi,ens is a key factor in the financial conditionof BnBs/ 8enior customers are entitled to a 2. percent discount1 0ut the markup enoyed 0y BnB outlets

is only 7@: percent of the catalogue price of %)(C/ (hus1 for each senior customer purchase1 the BnB

suffers an outright loss of -2@-4 percent/ (he total loss can 0e considera0le1 especially at the startup

period of the BnB1 and more so if it is ust a small or medium@si,ed outlet/

O0servers claim that it is not profita0le to run a BnB on a stand@alone 0asis/ )ts smallness orks against

efforts to make it sustaina0le/ )ndeed1 sales are too lo for many of them/ (o address this issue1 it has

0een suggested that non@economical BnBs should 0e alloed to fold up1 and an alternative approach

utili,ing already@e"isting structures as drug outlets should 0e pursued/

". Mar)et competition@ (he BnBs have had important demonstration effects/ +eali,ing that lo@cost

retail of drugs can 0e profita0le 1 for@profit drug franchise operations havemushroomed =uickly1 most nota0ly (he #enerics %harmacy1 the first generics retail pharmacy to

franchise in the %hilippines/ )t is no reputed to have -1-.. franchisees nationide

and is the fastest groing drugstore in the country/ For@profit franchise upstarts that folloed in its

ake include 2 Drugs1 %harma=uick 251 !mmaflor1 and ohnston Drugs/ (he 3atsons Drugstore chain

has also 0ranched out rapidly1 ith 257 pharmacies nationide/ (he BnB idea itself 0ranched out to

larger Botikang Bayan hich operates on the same franchise format as its private sector

counterparts/ Despite the still@precarious situation of BnBs1 the Drugstore Association of the %hilippines

no vies them as undue competition/


31/58

4-

D# %verall *ssessment and %perational Recommendations

(he BnB program has rapidly gron in terms of num0er1 0ut the systems re=uirements to make them

effective1 efficient and sustaina0le operations have lagged 0ehind/ )n anuary 2.--1 the DOH has placeda moratorium on additional BnBs 0eing esta0lished1 until the systems pro0lems are fi"ed/ (he folloing

pro0lem areas need particular attention

(o sta0ili,e the supply and prices of drugs in BnBs1 the DOH is considering alternative options to pool

procurements1 impose order1 and monitor drug =uality/ NC%A$1 orking in tandem ith the CHDs1

plans to identify and formulate a list of legitimate drug suppliers that ill 0e alloed to supply =uality

drugs to BnBs at the prices set 0y DOH/ BnB operators ill not 0e alloed to o0tain supplies outside of

those in the list/

Ne location strategies need to 0e formulated on account of emerging competition from the private

sector/ (he BnBs should focus on really poor 0ut via0le areas1 and the 0udget re=uest for additional

BnBs should reflect these concerns/ $oreover1 a ne set of criteria should 0e set to determine thelocation of ne BnBs1 including the distance of the closest BnB1 the location of other retail

outlets1 population si,e in the catchment area of the BnB1 and economic and poverty conditions in the

area/

Capacity 0uilding of BnB operators need to 0e given more prominence/ 8kills in 0asic drug retail

management1 pharmaceutical operations1 stock and inventory management1 and accounting and

record@keeping should 0e given priority/ DOH is partnering ith the %hilippine %harmacists Association

to provide training on Kpharma@preneurshipL and good pharmaceutical practices/ NC%A$ plans to come

up ith a standard training manual for BnB operators/

CHD supervision is key in ensuring the via0ility of BnBs/ (oards this end1 the supervising

pharmacists shall 0e re=uired to monitor the income of the BnBs to help the regional CHDs target their

assistance/

(he Administrative Order esta0lishing the BnB program has to 0e revamped/ NC%A$ is no

finali,ing the revised guidelines for the BnB program1 addressing such issues as drug re@supply1 the need

for pharmacist services1 and other operational issues/ NC%A$ also needs to re@think the overall strategy

for the BnBs given the changed market for pharmaceuticals ith the recent entry of private local

suppliers1 the via0ility and long@term sustaina0ility of BnBs1 the cost@effectiveness of the traditional

village pharmacy model1 and alternative models that could 0e considered/

For BnBs that have matured 0eyond their original mandate1 and have good financial and operational

management practices1 NC%A$ intends to assist them 0ecome licensed as regular pharmacies/ (he

0enchmark is that they should reach an income level close to the average income of a small private

retail outlet/

Despite the current pro0lems1 the BnB program provides a strong signal from government of its

commitment to pursue afforda0le and =uality drugs/ (he role of BnBs and BNBs in reducing prices

through competition is an important consideration/ (hese outlets have helped ease the contesta0ility of

the local drug market1 hich used to 0e dominated 0y one large dominant chain store/ (here are ell@

founded fears that the drastic reduction1 if not complete stoppage1 of the BnB program could signal to

the private sector to resume their high@price regimes since there is no longer competition/


32/58

42

(he smallness of the BnB as an economic enterprise can 0e addressed if it is alloed to operate also as a

sari@sari store/ $ore to the point1 the rural drug distri0ution should 0e re@strategi,ed to tap

already@e"isting rural stores1 hich can then sell over@the@counter drugs on the side/ Along this thrust1 a

pooling or aggregator mechanism can 0e more easily employed to oin together the resupplymechanisms of a group of sari@sari stores1 folloing the logistics mechanism of the other products that

they sell/

(# Proposal for Program Impact (valuation

3ith e"isting data1 it is impossi0le to isolate the impact of the parallel drug importation and the

involvement of %)(C in logistics on BnB operations1 costs1 and effectiveness/ Current comparisons

0eteen BnBand alternative retail sources of drugs are erroneous 0ecause they are comparing

different drug importation modes1 institutional structures1 and su0sidi,ed and unsu0sidi,ed logistics and

distri0ution systems/ )t is necessary to isolate the individual effects of these factors1 and (a0le -7

proposes a method to do this/

"a+le @# Proposed Design for an Impact (valuation of BnB and B:B

)mportation $ode )nstitutional 8tructure Oner Dependent on DOH?CHD

Distri0ution &ogistics

BnB #overnment Ees

BnB %rivate Ees

BNB Non@profit Ees

BNB For@profit Ees

#enerics sourced via

%D)

%rivate retail pharmacy For@profit Ees

+ural pharmacy #overnment Ees

(on pharmacy N#O No


33/58

44

Chapter I$.evie! of the "oti#ang "ayan%Program


(he Botikang Bayan program aims to esta0lish - BNB outlet per municipality1 using the franchising

0usiness format/ BNBs are flagship outlets of the Cheaper $edicines %rogram of the government/ (he

eligi0le applicants are N#Os and cooperativesG trade and la0or unions or employees associationsG

corporate foundations and religious groupsG senior citi,ens and omens groupsG and sole

proprietorships1 partnerships and corporations/

&ike the BnBs1 BNBs rely on parallel drug importation1 mainly from )ndia and %akistan1 though they also

carry local 0randed generic drugs/ $ost of the medicines 0eing imported under this program are for

asthma1 hypertension1 and dia0etes/

8ome special outlets under the BNB netork are

Botikasa%arokya1 hich are operated 0y the 8ocial Action Centers of parishes/ Funding for theinitial stocks is provided 0y the Office of +eligious Affairs of the Catholic Church through the

%hilippine Charity 8eepstakes Office/ : as of [email protected]/

Coops for Christ/ -5 as of [email protected]/ $ilitary and %olice outlets1 hich are operated respectively 0y the Armed Forces of the%hilippines Commissary and the %hilippine National %olice 8ervice 8tores/ 6 as of [email protected]/ %hilippine #overnment !mployees Association outlets/ 9 as of [email protected]/ 8tate Colleges and 'niversities outlet/ - in Cavite as of [email protected]/ ' outlets/ 6 as of [email protected] in the provinces of Cavite1 $indoro Oriental1 *am0oanga8i0ugay1

and 8uluG and in the cities of $alolos 1 O,amis /

(he re=uirements for pre=ualification are valid and current registration as an institution


34/58

45

(he BNB proponent signs a memorandum of agreement ith the %)(C stipulating the folloing key

terms and conditions

%)(C ill supply all drugs and medicines and other consumer products hich ill 0e sold in theBNB outlet/ No other products ill 0e sold 0y the BNB/ (he BNB outlet must maintain the

folloing monthly purchase of drugs from %)(C

o %hp -.1... for BNBs in -st@;thclass city or -stclass municipalityGo %hp 71;.. for BNBs in 6thclass city or 2nd@5thclass municipalityG ando %hp ;1... for BNBs in ;th@6thclass municipality/

(he BNB ill sell the drugs at no more than the prescri0ed $a"imum +etail %rices / iolation of this condition ill entitle %)(C to revoke its

accreditation of the BNB as participant in the program/ BNB outlets ill 0e re=uired to provide

=ualified senior citi,ens ith the standard price discount in accordance ith e"isting las/

%)(C ill arrange to provide training support to the supervising pharmacist and other BNBpersonnel/

%)(C ill arrange to make standard signages1 collaterals1 and product lists availa0le for use in theretail outlets/

%)(C ill provide BNB outlets ith certificates of product registration as ell as BFAD?FDAreports of analysis for all 0atches of drug supplies delivered/

For all deliveries from %)(C or its designated distri0utor1 the BNB ill pay in full through a thirty@day post@dated check/ &ate payments are su0ect to an interest rate of 2 percent per month/

Failure to remit payments for previous deliveries entitles %)(C to ithhold processing of follo@

up orders/

+eturns or e"changes of products delivered 0y %)(C are alloed only ithin 7 orking days fromthe date of the delivery/ +eturns are accepted only for defective or tampered packagingG

ina0ility of %)(C to provide the re=uired certificate or product registration or report of analysis

of the 0atches or lots deliveredG and the remaining shelf or usa0le life of the product is less than

6 months/

)n turn1 the BNB operator agrees to provide the initial capitali,ation of the outlet and the inventory of

medicines to 0e soldG shoulder the overhead1 manpoer1 legal and other e"penses re=uired tooperate the outletG purchase the standard program signage and other collaterals from %)(C for use in

the outletG display1 in a prominent location and ithin sight of consumers1 the product list and $+%s1

the license to operate1 and the certificate of accreditationG hen re=uested1 and su0ect to further

negotiation1 share in the e"penses for marketing and advertising support for the programG and

comply ith the reporting and monitoring re=uirements hich may 0e instituted 0y %)(C and DOH?FDA

in connection ith the program/ Folloing the issuance of BFAD?FDA of the license to operate1 the

operator posts a surety 0ond of %hp ;..1... in favor of %)(C to guarantee faithful compliance ith the

terms and conditions of the program/


35/58

4;

(he BNB idea itself has evolved into a derivative format called BNB !"press1 hich re=uires a smaller

investment for the initial set of medical stocks/ BNB !"presses are also privately run

outlets/ (hey are supervised 0y an institutional pharmacist or a territorial one ho goes around simila

BNBs/


1. Extent of B*Bs 8ince the program started in 2..;1 the cumulative num0er of BNBs has continued to

rise1 peaking at 212;6 in 2.-. / Hoever1 the annual addition to BNBs has declined from a peak

of 457 in 2..7 to only 6- in 2.-./

&igure @#*nnual and Cumulative :um+er of B:Bs (sta+lished, 1!!4 A 1!! .(nd of ear0

8ource Botikang Bayan 8ecretariat1 %)(C/ /0otikang0ayan/com/ph

Do BNBs improve accessJ (a0le -: shos the regional distri0ution of BNBs and the population?BNB 0y

region/ As e"pected1 the regions ith the densest concentration of BNBs are the National Capital +egion

and the surrounding areas of +egion ))) and )@A 1 hich are also the

most affluent regions/ (he regions ith the ne"t level of concentration are ) 1 CA+1 )) 1 )@B 1and / (he poorest regions have e"pectedly the least concentration of BNBs/

"a+le 2# :um+er of B:B %utlets +y Region and Population5B:B, 1!!

+egion No/ of BNB

+egional %opulation in $n

%opulation?BNB

) )locos -52 5/6 421495

CA+ Cordillera A+ 52 -/; 4;17-5

)) Cagayan alley 77 4/- 5.126.


36/58

46

))) Central &u,on 2;- 9/7 4:165;

NC+ $etro $anila 212;6 --/6 ;1-52

)@A Cala0ar,on 4.9 --/7 471:65

)@B $imaropa 77 2/6 441766

Bicol :: ;/- ;719;;

) 3estern isayas -59 6/: 5;164:

)) Central isayas -.- 6/5 641466

))) !astern isayas 52 4/9 921:;7

) *am0oanga

%eninsula

5- 4/2 7:1.59

Northern $indanao 4; 5/. --512:6

) Davao ;4 5/2 79125;

)) 8occsksargen 55 4/: :61465

Caraga 22 2/4 -.51;5;

A+$$ -. 5/- 5-.1...

(otal 212;6 ::/6 491274

8ource of 0asic data BNB 8ecretariatG %hilippine 8tatistical Eear0ook1 2.-.

(he BNB target is to have - BNB for each city or municipality/ #iven this program target1 Figure : shos

the percentage of cities and municipalities in each region that has a BNB/ As of end 2.-.1 it is estimated

that around -1... municipalities are not yet served 0y a BNB/

&igure 2# Percentage of Cities and Municipalities 8ith B:B, +y Region, as of May 1!!

8ource &avado

+. !ational drug use (he BNB drugs ere also selected 0ased on the most prevalent causes of

mortality and mor0idity1 not on DA&Es1 hich are the more accurate and appropriate 0asis for drug


37/58

47

selection/ Nevertheless1 0ecause BNBs offer a ider selection of drugs 1 they seem more a0le to address the health conditions of their catchment

populations far more than BnBs are capa0le of doing/

(here are no data on the prescri0ing and dispensing 0ehaviour of BNBs1 0ut one can surmise the lack of

supervising pharmacists is also a pro0lem1 especially for municipalities further out/

,. Cost efficienc# $is%a%$is the pri$ate sector No study has 0een done on the pricing of BNBs relative to

other pharmaceutical suppliers/


1. Mortalit# rate (a0le -9 shos the types of BNB and the num0er that have 0een closed/ Out of the

212;6 BNBs that have 0een esta0lished1 -47 have closed as of [email protected] for a total mortality or closure

rate of 6 percent/ Note1 hoever1 that BNBs are private 0usinesses hich can 0e sold/ )ndeed1 cursory

search in the )nternet shos BNBs for sale in Bulacan and Davao/ One is reported 0eing sold for %hp-4.1... /

"a+le 6# "ypes of B:B +y Maor Island $roup and :um+er of B:B 8hich 9ave Closed, as of (nd


38/58

4:

8alaries and ages 2-61...

8881 %H)C1 H$DF 2-16..

)nsurance e"pense -41;..

-4thmonth pay -:1...

8ecurity e"pense 961...

&ease e"pense -2.1...

)nterest e"pense 6.1... ;5;1...

%rofit 4.515..

8ource %)(C %harma1 )nc/

D# %verall *ssessment

(he BNB format is far more structured than the BnB/ )ts for@profit nature has 0uilt@in

incentives for the oner to perform 0etterG the oner can also sell the 0usiness1 and there is a domestic

market for such 0usiness sale/ (he BNB ur0an market is also more sta0le than the BnB rural market/

(he supply replenishment of the BNB has 0een less of a pro0lem than the BnB there is an agreed@

upon resupply of drugs under the franchise agreement ith %)(C %harma1 hich the BnB

agreement ith CHD does not have/

Competition from the private sector is getting more keenG the future of the BNB ill depend on

ho ell %)(C %harma manages its franchise netork/

BNBs are less of a 0udget concern since they are the responsi0ility of %)(C %harma as a

government oned and controlled corporation/


39/58

49

Chapter $.evie! of the P&'' Treatment Pac# Program


(he %-.. treatment pack program solves to constraints in pharmacy prescription at the same time/

On the one hand1 compliance packaging helps address the need for patients to adhere to their

medication schedule/ (his is a practice that has 0een in place in long@term care pharmacies in

developed countries for years/ On the other hand1 KtipidL packs have increasingly 0een used in

the %hilippines for the marketing of products such as shampoo1 detergents1 cooking oil1 cell phone load1

cigarettes1 and alcoholic drinks/ (hus1 the %-.. treatment pack com0ines these to concepts in aninnovative marketing approach that takes into cogni,ance 0oth the medical necessity of drug

compliance as ell as households a0ility to pay for drugs/

(he %-.. treatment pack as patterned after the 3almart '85 %rescription %rogram for Americans

ithout health insurance/ (his program no has 4.. drugs/

(he DOH initiated the %hp -.. (reatment %ack9 %rogram in Decem0er 2..: to iden peoples access to prepackaged generic drugs ith an

afforda0ility limit of -.. pesos or loer/ (he intention is to encourage patients to take the full course of

their drug treatment regimen 1 instead of patients 0uying them in individual

ta0lets or capsules hich end up 0eing more e"pensive and often leads to discontinuance once the

patient feels ell enough/ (he drugs are packaged in a full set/ (hus1 the program meets to keypharmaceutical o0ectives at once improving the availa0ility of =uality@assured drugs at afforda0le

prices1 and promoting the rational use of medicines/ (he program as piloted in 72 DOH retained

hospitals and 2: ' hospitals/

(he program includes 25drugs most commonly used1 including anti0iotics1 antihypercholesterolemia1

antiarthritis1 antiasthma1 antidia0etes1 and itamin C/ (a0le 2- shos these medicines1 their dosages

and treatment course1 and the common 0rand/ Of the -7 0rands in the %-.. list1 five are in the !ssential

Drug &ist1 the prices of hich have gone don dramatically folloing the implementation of the

$+%?#$A%/ )n addition1 7 other drugs have since 0een included in the %-.. list after the $+%?#$A%

as implemented/

"a+le 1# Drugs Included in the P!! Programand Peso Savings Per "reatment Pack Relative to theCommon Brand, 1!!

#roup Drugs Common Brand (reatment

Course

uantity %er

%ack

Anti@infectives Amo"icillin ;.. mg cap Amo"il 4" a day for 7

days

2-

9)t is no re0randed as the DOH Complete (reatment %ack %rogram1 to take account of some drug packages that

are priced higher or loer than %hp -.. per pack/


40/58

5.

Co@amo"iclav-. 62; mg

ta0let

Augmentin 2" a day for 7

days

-5

Cefale"in ;.. mg cap efle" 4" a day for 7

days

2-

Ciproflo"acin ;.. mg

ta0

@ 2" a day for 7

days

-5

Clindamycin -;. mg

cap

Dalacin C 5" a day for 7

days

2:

Cotrimo"a,ole -6. mg

ta0

Bactrim 2" a day for 7

days

-5

$etronida,ole ;.. mg

ta0

Flagyl 4" a day for 7

days

4.

Anti@asthma 8al0utamol 2 mg?2/;

m& ne0ules

entolin 4@5" a day or as

needed

9

Amlodipine -. mg ta0 Norvasc - ta0 once a day 6Felodopine !+ -. mg

ta0

%lendil !+ - ta0 once a day 4

Felodipine !+ 2/; mg

ta0

%lendil !+ - ta0 once a day 7

Anti@hypertensive

Felodipine !+ ; mg ta0 %lendil !+ - ta0 once a day ;

8imvastatin -. mg ta0 *ocor - ta0 once a day -;

8imvastatin 2. mg ta0 *ocor - ta0 once a day -:

Anti@

hyperlipidemic

8imvastatin *ocor - ta0 once a day 5

#out preparation

Allopurinol -.. mg ta0 *yloprim - ta0 once a day 4.

$elformin ;.. mg ta0 #lucophage 4" a day 9.Oralhypoglycemic #li0enclamide ; mg ta0 Daonil - ta0 once a day 4.

Omepra,ole 2. mg

capsule

&osec - ta0 once a day -;Antacids and anti@

ulcerants

+anitidine -;. mg ta0 *antac - ta0 once a day 2:

Amlodopine ; mg ta0 Norvasc - ta0 once a day -2

Atenolol ;. mg ta0 (enormin - ta0 once a day -5

$etropolol -.. mg ta0 Betaloc - ta0 once a day 4.

Anti@hypertensive

$etropolol ;. mg ta0 Betaloc 2" a day 9.

itamins Ascor0ic Acid ;.. mg

ta0

Cecon - ta0 once a day 4.

8ource DOH


1. Potential program -enefits )n health care settings in developed countries here compliance

packaging has 0een the norm for some time1 the 0enefits of treatment packs include effective

treatment of a conditionG esta0lishing optimal dosingG incorporation of all medications G more effective communications 0eteen health professionals and patientsG

providing clarity and transparency of treatment e"pectations and o0ectives of the programG ma"imi,ing

-.8pecial 0onus package


41/58

5-

drug utili,ation hile minimi,ing asteG simplifying compliance ith la0elling and record keeping

re=uirementsG minimi,ing need to consult a physician for routine administrative mattersG and

appropriate handling and disposal of confidential material /No impact evaluation of the %-..

program has 0een undertaken1 and it ould 0e useful to assess ho far these potential 0enefits have0een reali,ed so far/

. Cost comparison and sa$ings to the patient (a0le 22 shos the selling price of the common 0rand

vis@a@vis the %-.. for a complete treatment1 and the associated savings for the purchase of the latter/

(o data sets are availa0le for analysis1 and they sho the folloing

"a+le 11# Price Comparison of P!! "reatment Pack with (/uivalent Common Brand in %riental

Mindoro Pilot and %verall D%9, 1!!6

DOH1 2..9 Oriental $indoro1 2..9Drugs

8elling %riceof Common

Brand

%hp

%-..8elling

%rice

%hp

DOH%hp

8avings

8elling %riceof Common

Brand

%hp

%-..8elling

%rice

%hp

8avings%hp

Allopurinol -.. mg

ta0

2.5/9. ;./.. -;5/9. 2.5/9. 27/.. -77/9.

Amlodipine -. mg

ta0

55:/;. -../.. 45:/;. @ @ @

Amlodopine ; mg

ta0

;.7/.. -../.. 5.7/.. 644/7; 95/:. ;4:/9;

Amo"icillin ;.. mg

cap

2-5/2. 7./.. -55/2. @ @ @

Ascor0ic Acid ;.. mg

ta0

-69/;. ;./.. --9/;. @ @ @

Atenolol ;. mg ta0 5.4/9. 7./.. 444/9. @ @ @

Cefale"in ;.. mg cap ;6-/7; -../.. 56-/7; @ @ @

Ciprofla"acin ;.. mg

ta0

@ @ @ -1.22/.. 2;/2. 996/:.

Clindamycin -;. mg

cap

-1-2./.. -../.. -1.2./.. @ @ @

Cotrimo"a,ole -6.

mg ta0

4:2/2. 2;/.. 4;7/2. @ @ @

Felodopine !+ -. mgta0 -96/-- -../.. 96/-- @ @ @

Felodipine !+ 2/; mg

ta0

-9:/:. -../.. 9:/:. -9:/:. :./;. --:/4.

Felodipine !+ ; mg

ta0

2.-/:; -../.. -.-/:; @ @ @

#li0enclamide ; mg

ta0

4.6/.. 2;/.. 2:-/.. 4.6/.. -6/;. 2:9/;.

$elformin ;.. mg

ta0

744/;. -../.. 644/;. 744/;. :-/.. 6;2/;.

$etropolol -.. mg 7:6/.. -../.. 6:6/.. @ @ @


42/58

52

ta0

$etropolol ;. mg

ta0

-1477/.. -../.. -1277/.. @ @ @

$etronida,ole ;..

mg ta0

;9-/.. ;./.. ;5-/.. ;9-/.. 2:/;. ;62/;.

Omepra,ole 2. mg

capsule

-19.5/2; 7;/.. -1:29/2; 2;4/9. 9./.. -64/9.

+anitidine -;. mg

ta0

:96/.. 7;/.. :2-/.. :96/.. 65/5. 99;/;.

8al0utamol 2 mg?2/;

m& ne0ules

24./:; -../.. -4./:; 2;5/7. 9;/:; -;:/:;

8imvastatin -. mg

ta0

6-;/.. 7;/.. ;5./.. 6-;/.. 75/2; ;5./7;

8imvastatin 2. mg

ta0

74:/.. -../.. 64:/.. @ @ @

8imvastatin -65/.. -../.. 65/.. @ @ @

Co@amo"iclav-- 62;

mg ta0let

-1-9. ;../.. 69./.. @ @ @

8ource DOH

(he ider DOH 2..9 price comparison shos that the savings range from %hp 65/.. to %hp-1:29/ For instance1 ranitidine costs %hp 42 each/ )f needed for 2: days1

the cost ould 0e %hp :96/ But ith the %-.. pack1 the regimen ould only cost %hp -..1

saving for the patient %hp :2-/

(he 2..9 price comparison for Oriental $indoro1 here the program as pilot@tested under the%rovincial Health Office1 shos that that the savings range from %hp -;:/:; to %hp 99;/;./

8ince the %-.. program as initiated1 the market for generics drugs in the %hilippines has 0oomed1 ith

the rapid groth of the private@for@profit (he #enerics %harmacy as ell as similar generic compliance@

pack initiatives of the private pharmacy chain 3atson


43/58

54

+. !ational drug use (he %-.. treatment pack program as intended to improve adherence to

medication/ 3ith its re0randing and re@launch as the DOH Complete (reatment %ack program1 it is

envisioned to 0e offered more idely to indigent Filipinos/ (hus1 medications for common acute

infections and maintenance drugs for hypertension1 dia0etes1 and high cholesterol ill 0e provided forfree to the poor CC( recipients1 on the folloing conditions the patient consults ith the +H'

physicianG the patient has a D83D )D num0er and?or %hilHealth num0er as 0eing covered under the

%H)C 8ponsored %rogramG and the patient adheres to the regimen prescri0ed 0y the +H' doctor and

constantly does follo@up/

,. Deli$er# challenges A maor criticism of this program is its limited num0er of access points/ 8o far1

only DOH hospitals and a limited num0er of ' hospitals are dispensing ith %-.. packs/ +egion )) is

considering e"pansion of this program 0eyond the current access pointsG other regions may follo suit/

Hoever1 ith the e"pansion of the delivery netork1 stock availa0ility needs to 0e improved/ DOH and

regional %-.. coordinators ill also 0e necessary/ 8tock inventory and delivery remain as maor

pro0lems for this program/

#ood %-.. practices have 0een culled from the e"perience of Oriental $indoro1 and these may 0e

orth disseminating/ )n this province1 the %-.. stocks are delivered through the +egional 8tore1 using

the %rovincial Hospital Depot/ (he distri0ution outlets include all the government hospitalsG the +H's

and BnBs are 0eing eyed as potential outlets/ %romotion is done through trimedia /

8upport is o0tained from all government health personnel in hospitals1 +H's1 and the interlocal health

,ones/

Finally1 the drug list in the %-..1 so far1 has 0een very limited/ (here is certainly scope to adding more

drugs to this list/

DOH is re0randing and relaunching the program in late 2.-- to deal ith these delivery challenges/ As

has 0een mentioned1 the intention is to scale up the program in three ays

%roviding the treatment packs for free to poor1 CC(@receiving families and?or families deemedindigent and enrolled under the %hilHealth 8ponsored %rogram/ DOH ill provide these as a

grant to the D83D@identified -1.2- poor municipalities as part of the 5%?CC(

%rogram/ (he municipalities rural

health units ill 0e the programs access points/

8elling the treatment packs in participating DOH and ' hospitals1 at alloed margins inclusiveof all applica0le discounts/ (his ill ensure the availa0ility of these drugs for non@poor patients/

#overnment hospitals may stock these treatment packs in their pharmacies on a consignment

0asis/ (he program could 0e run as drug revolving funds at the respective governmenthospitals/

8elling the treatment packs in private retail outlets/ (he NC%A$ shall secure approval from theDepartment of Finance to allo these sales1 e"empting the treatment packs from special

discounts and value added ta" / %rivate hospitals may also stock these treatment packs in

their pharmacies on a consignment 0asis/

. Procurement of treatment pac)s (he initial supply system as limited to %)(C %harma/ +estocking

the hospitals as difficult 0ecause of variationsin demand?consumption patterns/ %)(C %harma as also

0eset ith operational issues and financial lia0ilities hich affected its performance as a procuring


44/58

55

agency/3ith the relaunched treatment pack program1 procurement ill 0e done centrally at DOH@

COBAC through one@time 0idding/


1. (unding DOH initially funded the program ith %hp ;. million/ Additional technical and other

support as initially provided 0y 3HO1 !' and #(*/)n Oriental $indoro1 the %-.. 0udget is included in

the annual procurement 0udget for medicines in the different satellite hospitals /

(he payment is done through fund transfers/(he %-.. proect of Oriental $indoro indicates that the

treatment pack program can 0e sustaina0le/ Data for the month of Decem0er 2..: a

i-cheaper medicines program review

Documents