2014 Philippines Pharmaceutical Market Update

2014 Philippines Pharmaceutical Market UpdateThe Philippines, a Southeast Asian country made up of more than 7,000 islands, has a population of over 100 million people — making it the 12th most populous country.  2013 Philippine GDP growth was among the fastest in Asia, at almost 7%.  Household consumption also rose more than 5%.  Increasing household wealth has translated into rising healthcare spending, with per-capita expenditures growing from $32 in 2003 to over $100 in 2013.

In the Philippines, foreign drug firms are the primary players, accounting for approximately 75% of the pharmaceutical market.  Sanofi, GlaxoSmithKline (GSK) and Novartis are some of the biggest foreign drug firms in the Philippines.  Large domestic pharmaceutical firms include Natrapharm, United Laboratories, Pascual Laboratories and GV International.

Recently, the greatest gains made by domestic pharmaceutical firms have been in the generics market. In the past, few Filipinos trusted generic pharmaceuticals.  Furthermore, doctors mostly prescribed branded drugs, in part because of the incentives offered by major drug companies.  However, new legislation has made it mandatory for public hospitals to use generic drugs.  As these drugs are increasingly prescribed, Filipinos are becoming more accepting of generics.

For both foreign and local manufacturers, the segment with the most rapid growth in the Philippines is the generics market.  Companies like Orient Europharma of Taiwan and Getz Pharma of Pakistan have been expanding their in-country operations.  So has Sandoz, Novartis’ generic arm.  To compete with these generics, many foreign companies are significantly reducing the prices of their branded pharmaceuticals, in some cases by up to 60%.

Healthcare in the Philippines

At the end of June 2013, President Benigno Aquino III signed the National Health Insurance Act of 2013, a law that expands the national health insurance scheme, PhilHealth.  National healthcare coverage will now be available to all Filipinos.  In fact, the Act includes provisions to prioritize the needs of the disabled, elderly, women and children, underprivileged and sick.  Furthermore, free healthcare will be provided to indigents.

Currently, 80% of the Philippine’s 106 million people are covered under PhilHealth, a percentage that has grown rapidly over the past decade.  The original bill establishing PhilHealth did not allow local governments to enroll patient groups until there was “reasonable access to adequate and acceptable health care services.”  The 2013 law cancels that provision.

To pay for increased coverage, the central government has poured nearly $300 million in subsidies into PhilHealth since January 2013.  In addition, it has doubled the 2013 budget for the Department of Health, which oversees the program.  However, PhilHealth will need still more money in order to increase individual benefits.  Currently, only about one third of healthcare expenses are covered under the plan, and almost no outpatient medications are eligible for reimbursement.

The expansion of national coverage offers mixed opportunities for foreign firms, which dominate the country’s $4 billion pharmaceutical market.  Increased coverage should expand the number of Filipinos who are eligible for reimbursements, enhancing opportunities for global drug companies.  At the same time, the expansion of PhilHealth could also increase the pressure on the central government to reduce reimbursement pricing further.

Two Common Diseases in the Philippines


In the Philippines, pneumonia is the principal cause of vaccine-preventable death.  Among Filipinos aged 50 and older, studies have shown that pneumonia is the foremost cause of illness as well as the fourth most common cause of death overall.  In July 2011, the Philippine Food and Drug Administration (FDA) approved Pfizer’s Prevnar 13 vaccine (Pneumococcal conjugate vaccine) for use in adults over the age of 50.  Prevnar 13 is both the first and only vaccine approved in the country that works to prevent pneumonia.

Over 2013, Pfizer’s subsidiary has further increased its fight against pneumococcal illnesses in the Philippines by promoting an anti-pneumonia vaccination campaign, working with local partners.  Prevnar 13 is Pfizer’s best-selling pharmaceutical product for pneumonia.  The vaccine is currently used in over 100 countries.

Hepatitis B

Hepatitis B has an especially high incidence rate in the Philippines, affecting almost 8 million Filipinos — approximately 1 out of every 13 people.  It is also the most common serious liver infection worldwide and one of the most challenging infectious diseases to manage.  It places people at high risk of death from cirrhosis of the liver and liver cancer.  The vaccine for hepatitis B is 95% effective in preventing an infection by the hepatitis B Virus and its subsequent chronic consequences.  In the Philippines, the prevalence of hepatitis B can in part be attributed to the inability of many patients to afford the expensive treatments.

Pharmaceutical giant Roche Inc.’s Philippine subsidiary partnered with the Hepatology Society of the Philippines to launch a new program in July 2011 that assists hepatitis B patients in getting treatment at reduced rates.  Called the “PEGASSIST Easy Access Plan,” the program helps patients receive peg-interferon alfa-2a medication at a discount of up to 52%.  Furthermore, patients can receive free access to certain laboratory tests — which would otherwise be extremely costly.  In order to know if they qualify for the program, hepatitis B patients can see their gastroenterologist and also check with a financial assessment agency.

Regulatory Information for Pharmaceuticals

The FDA is the main body for Philippine pharmaceutical regulations.  The FDA handles the registration of processed foods, drugs, medical devices, in-vitro diagnostic reagents, cosmetics and household hazardous substances.

For companies that want to know whether their product falls under the food, drug, or cosmetic category, they may apply for product classification.  Application documents with sample and complete product information and proof of payment can be submitted to the Policy, Planning, and Advocacy Division of the FDA.

Product Registration for Pharmaceuticals

In the Philippines, companies involved in the import, manufacture, packaging, distribution, retail and export of drugs need to have a License to Operate (LTO) prior to product registration with the FDA.  The timeframe for approval of LTO applications is usually one to two months.

For pharmaceutical product registration with the Philippine FDA, the following information must be submitted:

  • LTOs for the importer, distributor and/or manufacturer
  • Certificates of Agreement between the Filipino importer and/or distributor and the manufacturer
  • Certificates of Analysis and Specifications for each raw material used in the manufacture of the drug
  • Information on the drug’s dosage and product formulation
  • Labeling materials
  • Stability studies
  • Specifications of the manufacturing process, including production procedures, production equipment, packaging procedures and in-process controls
  • Product samples — which should include English-language labels with the brand and generic names, name of the product license holder, product registration number, dosage, precautions, indications for use, date of expiration and batch number