Unfortunately, not even the implementation of the Generics Act of 1988, also known as Republic Act No. 6675, or a law that aims to produce affordable but effective medicines available to the public, has since substantially reduced the prices of drugs in the country.
Since lowering the cost of medicines in the country is a top priority of the administration of President Ferdinand Marcos Jr., he has taken steps to enhance the availability and affordability of medicines and proposed measures to improve healthcare accessibility, particularly in rural areas.
To achieve this goal, President Marcos Jr. aimed to manufacture these generic drugs in the Philippines to increase local supply and reduce prices to a “true generic level similar to India.”
“Halimbawa, kung mas marami ang mas murang generic o hindi branded na gamot sa merkado, mas mababa rin ang presyo dahil sa kumpetisyon. Ang Department of Trade and Industry ang makikipag-usap sa mga interesadong manufacturer ng generic drugs na papasok sa ating bansa (For example, if there are more cheap generic medicines in the market, prices will be lower because of competition. The Department of Trade and Industry will speak with interested manufacturers of generic drugs that will enter the country),” the President said.
In February 2024, during a sectoral meeting in Malacanang, President Marcos Jr. has directed health officials to study the establishment of so-called pharmaceutical economic zones or “pharma-zones” to bring down the prices of medicines and ensure efficient regulatory process.
“Pharma-zones should reduce prices. For the moment, ‘yung mga critical sa atin ngayon, we are hoping to follow the one that has been introduced in India, for example, naibaba talaga nila ‘yung presyo ng kanilang drugs at saka nakapag-export pa sila,” the President said during the meeting.
India is the world’s largest manufacturer of generic drugs which are 30 to 80 percent cheaper than branded medicines.
“[W]e want to be in the same place [with India]… Kailangan natin maibaba ang presyo to true generic. So, if we produce it locally, we are going to bring [it] down, but we have to get the accreditation. We have to get the authority to be able to produce those drugs and to be able to distribute them as quickly as possible,” he said.
To make this possible, the President said government should encourage both foreign and local investors to invest in the Philippine pharmaceutical sector by putting up pharma-zones similar to the ecozones being monitored and evaluated by the Philippine Economic Zone Authority (PEZA) where investors get certain tax and other financial incentives in order to bring down the cost of manufacturing.
Dr. Joahnna Esguerra, a resident physician at the Pacific Global in Quezon City is supports President Marcos Jr.’s move to come up with locally-produced medicines to make it cheaper and affordable.
“Cheaper medicines would result in healthier community and equally-viable economy,” Esquerra noted, saying the government should ensure adequate supply of generic drugs at a low cost.
In line with this, PEZA engaged industry stakeholders to help in its promotion of pharma-zones as locations for companies engaged in all aspects of medical device and drug manufacturing-related activities, including research and development (R&D), clinical testing and trials.
The country currently hosts 27 companies involved in pharmaceutical and medical device manufacturing, in PEZA-administered economic zones. The said firms manufacture products from these ecozones with combined export values projected to reach US$299.93 Million this year. It also employs about 19,000 Filipino workers.
PEZA Director General Tereso Panga is optimistic that more locators and investments can be brought into pharma zones.
“We are excited and more than encouraged to be facilitating the establishment of pharma ecozones in the Philippines which will become instrumental in the Administration’s efforts to enhance accessibility to medicines and lower drug prices,” the Director-General said.
Last October 2024, PEZA pitched its plans for pharma-zones in a meeting with top executives of industry giants AstraZeneca, GSK Philippines, I.E Medica, NephroPlus, Transmedic Healthcare, Unilab Laboratories, and Viatris.
The agenda also covered the current business landscape for the industry, drivers for its growth, key challenges, and the sector’s outlook.
The executives, on the other hand, noted the importance of funding for research and development, and of undertaking projects that particularly focus on preventive measures for chronic diseases including cancer, pulmonary disorders, and kidney ailment, which are amongst the top ten illnesses in the Philippines. According to them, these efforts are crucial to reduce mortality rates and improve the quality of life for Filipinos.
Panga welcomed their insights and added that these highlight the need to establish facilities in the Philippines for the manufacture of healthcare products and medicines, which will help reduce the country’s dependence on imports. He then highlighted the investment and incentive opportunities available at PEZA’s pharma ecozones.
Sandeep Uppal, President and CEO of the Philippine arm of global worldwide banking network HSBC said the healthcare sector in the Philippines is full of opportunities and it is the second-largest market for pharmaceuticals in Southeast Asia.
“As a healthy population is a fundamental pillar of economic productivity, HSBC is committed to support the government efforts to grow this sector using our global connectivity. This sustainable growth in the pharmaceutical industry requires strong collaboration across government and private sector where HSBC is delighted to play our part,” he said.
“On the level of the value addition which can take place on import substitution, I strongly encourage investing because when you’re inside the base or ecozone, it really does help with their ease of doing business because PEZA has its own rules, which you can benefit from once you’re inside.” he added.
The FDA’s Full Support
The Food and Drug Administration (FDA) expressed full support for the said pharma-zones. FDA Director-General Samuel Zacate said that pharma-zones established in PEZA-controlled areas will serve as places where the agency can immediately test and register medicines upon entry to the Philippines.
PEZA and the FDA – which is tasked with ensuring the safety, efficacy, or quality of health products – started working with the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) led by Secretary Frederick D. Go – toward improving the nation’s drug and medical device manufacturing ecosystems in the pharmaceutical economic zones.
The three government offices have been collaborating to enhance the ease of doing business for both domestic and export-oriented drug and medical device manufacturers by addressing certain non-tariff barriers, particularly in permitting and licensing.
The group also agreed to study the provision of a green lane for PEZA locators and update the PEZA-FDA Memorandum of Agreement, initially established in 2014, to improve licensing and registration for prospective and existing PEZA Registered Business Enterprises (RBEs). The update is intended to institutionalize the reduction in the turnaround time through pre-assessment activities that may be transferred to PEZA.
“We are committed to working in unison with the OSAPIEA and PEZA to simplify business operations in our country. By refining our policies and collaborating with PEZA, we aim to gain a better understanding of the concerns of locators. These initiatives are expected to elevate the local drug supply and reduce costs to competitive generic levels, akin to those in India,” Zacate said.
Apart from the FDA, PEZA is also collaborating with the Department of Trade and Industry (DTI), the Department of Health (DOH), the Anti-Red Tape Authority (ARTA), the Bureau of Customs (BOC), and the Bureau of Internal Revenue (BIR) to strictly regulate and monitor pharmaceutical-related activities in the country. This initiative is in line with President Marcos’s push for more efficient governance, which aims to streamline processes and make the Philippines an even more attractive investment destination. Under President Marcos’s leadership, such partnerships and reforms are expected to create a more conducive environment for businesses, particularly in critical industries like pharmaceuticals.
