Philippines: New Drug Store Chain to Sell Local and Imported Drugs at Reduced Prices

One of the largest industries in the Philippines is its pharmaceutical market, which earns an estimated P70 billion (US$1.2 billion) per year. The market is dominated by brand name medicines, comprising about 97% of the market. Thus, generic drugs make up only 3% of the market, providing citizens with very few options for affordable medicine. In order to offer more affordable drug options for Filipinos, on October 22, 2004, the Philippines government announced the “Botika ng Bayan” project. This project, to be organized by the Department of Health (DOH), will establish a new chain of outlet drug stores, which will offer commonly used drugs for a fraction of their current commercial rates.

Presently, the sale of pharmaceuticals in the Philippines is controlled by drug stores and hospitals, though drug stores are responsible for nearly 90% of all pharmaceutical sales. Additionally, pharmaceutical prices in the Philippines are some of the highest in Asia. For instance, a 20 milligram tablet of a particular anti-hypertension drug currently sells for P39.75 (US$0.71) in the Philippines, but the same drug sells for P4.40 (US$0.08) in India. The Philippines DOH feels that a new chain of discount drug stores will help improve accessibility and affordability of drugs in the Philippines.

The new chain of stores will be run by the Philippine International Trading Company (PITC) and will operate as a franchise, where companies or entrepreneurs may apply for a license. The owners and staff of each store will receive training from the government on the objectives and operations of the program. All franchise staff will be advised on the rules set by the PITC, designating specific drugs to be available at certain set prices. At the onset of the program, all Botika ng Bayan stores will be required to sell four specific drug types: (1) antibiotics, (2) anti-hypertension drugs, (3) anti-asthma drugs and, (4) anti-diabetes drugs. The PITC will source these drugs mostly from India and China, as well as from some local Filipino drug companies. The PITC will supply these drugs to the individual stores.

The DOH and Bureau of Food and Drugs (BFAD) will also assist with the establishment of the new Botika ng Bayan stores. They will facilitate with the registration of new drug products by implementing measures to expedite the shipping of these medicines, which will help to maximize shelf-life. Additionally, “express lanes” will be available for obtaining a Botika ng Bayan franchise license. These measures should help the PITC meet its goals of opening around 900 Botika ng Bayan stores during the course of 2005 and an additional 900 stores by the end of 2006.