A recent reader, Nonoy Oplas, who heads a think tank in the Philippines called Minimal Government alerted our attention today (see comments under DR. ARROYO AND THE ‘LAW OF INTENDED CONSEQUENCES’ and DEAR DR. ARROYO, JUST WHAT MEDICINE ARE YOU PRESCRIBING?) to yet another apparently unintended consequence of political interference in the Philippines healthcare industry as they persist with their populist measures attempting to play Robin Hood in endorsing the now legal theft of Peter to pay Paul (Cheaper Medicines Act) , especially since the politician’s cover story is that Paul supposedly represents the poor Philippino in need of cheap medications, whereas I believe the “real” Paul is the local Philippino Pharma company UniLab. Why would politicians pursue such measures under the guise of altruism? Probably related to the fact that presidential elections, legislative elections and local elections in the Philippines will be held on Monday, May 10, 2010. It must be politically expedient to assist friends at the leading domestic pharmaceutical firm grow some market share, while at the same time pulling a fast one on the native soon-to-vote electorate. Dr. Arroyo, who signed the Cheaper Medications Act into law despite being a distinguished student of economics is constitutionally prohibited from running for the president role but ….
Arroyo announces bid for Congress seat in Pampanga
11/30/2009 | 02:26 PMEnding months of speculation, President Gloria Macapagal Arroyo formally announced on Monday that she will be running for congresswoman of Pampanga’s second district.
In a recorded interview aired over the government-run dzRB radio station, Arroyo said: “Gaya ng alam ninyo, hiniling rin ako ng mga mamayan ng aking tahanang distrito sa Pampanga na manatili sa buhay publiko (As you all know, the residents of Pampanga’s second district have urged me to remain in public service).”
“After much soul-searching, I have decided to respond affirmatively to their call. To that end, I will file my (certificate of) candidacy for Congress in order to serve the hardworking people of my home province,” she said.
Mrs. Arroyo added: “I am not ready to step down completely from public service.”
And…
Administration critics allege that once she is elected into office, her colleagues in Congress would push for a shift into a parliamentary system of government and subsequently elect her as prime minister.
Answering a question from a government broadcaster about the issue, Mrs. Arroyo said: “The situation is so hypothetical. I won’t even bother to speculate about it.”
Robin Hood is a hero in English folklore, a highly skilled archer, marksman, swordsman, and outlaw. In particular, he is known for “robbing from the rich and giving to the poor,” assisted by a group of fellow outlaws known as his “Merry Men” (Wikipedia).
It appears finally that one of the players is standing on principal. Mercury Drug Store, the largest chain of drugstores in the Philippines refuses to play the “Merry Man” and I enclose the following article below to explain:
CTALK By Cito Beltran (The Philippine Star) Updated December 18, 2009 12:00 AM
Mercury Drug Store is without doubt the country’s biggest chain of drugstores in the Philippines. To their credit, the company has a long history of professionalism, integrity, as well as dedication to the public they serve.
So when some politicians and interest groups start accusing Mercury of unfair trade practice or not complying with the law, you have to wonder what the accusers are talking about.
The issue stems from Mercury’s decision not to sell a new generic medicine because the product and its manufacturers are currently in court facing charges of patent infringement or making a product whose formula belongs to someone else.
In essence, Mercury does not want to get involved in the mess. Being the largest drugstore chain in the Philippines, people at Mercury are aware that the magnitude or size of their nationwide operations can have serious consequences especially on the companies they do business with.
Because they know there is a case in court, they would be willfully causing injury to one company with a legitimate claim. What some people don’t realize is that the business decision of a giant company can influence or be used to influence even court cases. By selling the contested product, Mercury would lend legitimacy to something that has yet to be determined by the courts.
Mercury is known as a company that values long term relationships and has clearly decided not to take sides and chose to let the courts decide on the issue.
In business terms, Mercury being the giant in the industry could have simply decided to sell both competing products and earn profits which is what most of the other drugstores have done. Instead Mercury chose to be corporately responsible realizing that their profit would come at the disadvantage or would disenfranchise the patent holder.
Not only would Mercury ruin a relationship, prematurely selling a contested product would cause losses to the patent holder that will run into millions of pesos.
Unfortunately some lawmakers and companies treat our laws on Intellectual Property as a subjective matter and something subject to interpretation. In a recent Senate hearing, legislators essentially took the position that ‘the end justifies the means’.
One legislator suggested that Mercury should carry or sell the contested generic medicine because it was in keeping with their role as providers of good.
Are they now suggesting that we should sell fake DVDs, fake audio CDs, fake computer games and programs, fake fashion accessories and jewelry simply because it will make Filipinos happy?
And what happens if Mercury ends up in a situation like that of several companies who are now paying for advertisements to express their sincere apologies for illegally using or violating the intellectual property rights of another company? Will legislators foot the bill and share the embarrassment. I doubt it.
Another insisted that Mercury ‘must carry’ said medicine in compliance with the Cheaper Medicines Act. To begin with, from what I heard, the ‘must carry’ provision of this law referred to imported medicines.
I personally find the ‘must carry’ provision intrusive because it places an unfair burden on business establishments who have to give space and personnel for a product they may have nothing to gain from because it’s so cheap. This also takes away the right of a company such as Mercury to make business decisions without interference.
And what about the other laws on Intellectual Property? What about the legal and Intellectual property rights of people and companies? Are some legislators so blinded by their legislative agenda and desire for the public good, that they are insisting that Mercury violate intellectual property claims and professional courtesy?
Unfortunately, the accusation of “unfair trade” is far from the truth. Accusing Mercury of wrong doing or not doing the right thing is plain and simple “Unfair Trade”.
What we are dealing with here is commercial interest that has crossed over from the boardroom to the backroom, the halls of Congress, all the way to the marketplace. Corporate competitiveness has crossed the line of ethics and law requiring the courts to judge matters. What is at stake here is not mere compliance with legislation but potential profits for the taking.
The reason why Mercury is being punished is because they chose to be the gatekeepers. They chose to keep the status quo. Mercury chose to follow the law. For all their inconvenience Mercury deserves praise.
Mercury’s predicament should also call everyone’s attention to the fact that as far as the Cheaper Medicines Act is concerned, we now have living proof that “The road to hell is paved with good intentions”.
First let’s all agree that all the stakeholders have good intentions. Senator Mar Roxas did. The pharmaceutical industry did, the generics and local manufacturers did. And finally the health sector and consumers did. President Arroyo equally had good intentions.
Sadly we are now in a situation where much of what was dubiously achieved was done so through intimidation, force of law or manipulation, where competing or contradicting interests come into conflict. What was supposed to bring out the best for all of us has brought out the worst in “us”.
Legislators attack stakeholders and politicize hearings and statements. Manufacturers are engaged in a low level conflict that might as well be a shooting war. Businesses hate legislators. Health professionals hate politicians and companies. At the end of it all yes we have cheaper medicines, but at what economic and social costs?
Does this social agenda truly make an over-all difference that benefitted both our people and our economy? Or does it remain nothing more than a mirage that some people are selling as a “dream come true”?
Perhaps it is time to change our ways and mend fences or there may be a higher price to pay.
I disagree with the author’s claim that “all the stakeholders have good intentions”. I would phrase it differently; all stakeholders will do what’s in their OWN best interests. At least it is nice to see Mercury rising and standing on principal.
This is probably the last piece I do on this Philippino “Cheaper Medicine” saga (unless something really rockin happens) as Asia is a big place.
Tej Deol, M.D.
Thanks for the update, Dr. Tej. While the Pfizer-Unilab row is still in the courts, the pharma industry, both multinationals and domestic companies, are preparing for what they hear, is another round of drug price control. The current policy is now 5 months old, no assessment has been made by the DOH yet, but looks like it will be extended and more drugs may even be added under the price control list.
This is the evil of populism in politics. Damn the business players, damn the innovators, so long as certain policitians will get electoral votes on their populism.