Kathryn Joanne M.

Moscoso
BS Pharmacy 4B February 2, 2019
Philippines Pharmaceutical Market in 2018

Republic of the Philippines is a sovereign island country in Southeast Asia situated in the western Pacific
Ocean. It consists of 7,107 islands that are categorized broadly under three main geographical divisions: Luzon,
Visayas, and Mindanao. Its capital city is Manila while its most populous city is Quezon City; both are part of Metro
Manila. To the north of the Philippines across the Luzon Strait lies Taiwan; Vietnam sits west across the South
China Sea; southwest lies Malaysia in the island of Borneo across the Sulu Sea, and to the south the Celebes
Seaseparates it from other islands of Indonesia; while to the east it is bounded by the Philippine Sea and the island-
nation of Palau. Its location on the Pacific Ring of Fire and close to the equator makes the Philippines prone to
earthquakes and typhoons, but also endows it with abundant natural resources and some of the world's greatest
biodiversity. At approximately 300,000 square kilometers (115,831 sq mi), the Philippines is the 64th-largest country
in the world.

The country’s pharmaceutical industry is projected to grow by 4.5% annually over the next five years reaching
P164 billion in 2018 from P146 billion in 2014, according to a report. A report entitled “Partnering for Nation Building:
The Contributions of the Philippine Pharmaceutical Industry to Health and Economy,” prepared by IMS Consulting for
the Pharmaceutical Healthcare Association of the Philippines (PHAP), said the projected amount represents the value
output or production of industry, including research based pharmaceutical companies and generic companies.

Citing various data and studies, IMS Health forecasts the pharmaceutical market to grow by 4.5% year-on-year
over the next five years, reaching P164 billion by 2018. The pharmaceutical manufacturing sector (defined as
pharmaceuticals, medicinal chemicals, and botanical products) ranked in the top 22% of the 240 sectors in the Philippines
when measured by total output. In particular, IMS Health noted that based on a 2009 report by the European Medicines
Agency, the Philippines is number 8 among the top 10 countries worldwide with an annual growth in clinical trials of
30.9%. The report also cited the growing acceptance of generic drugs as more branded medicines become off-patent.

“While the pharmaceutical sector’s contribution to innovation is often associated with the launch of new
molecules, it is also reflected in the path paved by off-patent molecules that open the market for a wide range of generics,
making medicines accessible to the Filipino patients,” it added. Between 80% and 90% of essential medicines, as defined
by the World Health Organization, are already off-patent, thereby giving consumers more affordable options. Generics
account for 65% of the total pharmaceutical market, with an annual growth of 6% since 2010. Originator products account
for only 35% of the pharmaceutical market in the Philippines.

The Philippines has a higher utilization rate of lower-cost generics than other Asia-Pacific countries with
comparable GDPs. Generic medicine prescriptions by physicians has also increased by 7 percentage points since 2011
(from 66% in June 2011 to 73% in June 2014) enhancing patient access to medicines, the report said. With the leadership of
PHAP, the pharmaceutical industry provides Filipino patients with a wide range of high-quality, affordable essential
medicines and vaccines to choose from, including innovative drugs, branded generics and generics. The government’s
bulk procurement of pharmaceutical products has also helped bring down prices of medicines to Filipino patients.
Research-based pharmaceutical companies in the country have introduced more than 55 vaccines that prevent
unnecessary deaths among the most vulnerable children, women and the elderly.

Over the last three years, pharmaceutical firms have launched more than 76 new molecules or combinations for
the treatment of cardiovascular diseases, cancer, chronic respiratory diseases and diabetes helping ease the burden of
communicable and non-communicable diseases in the country. To date, research-based pharmaceutical companies have
made available to the market more than 55 vaccines against measles, pneumonia, diarrhea and rubella. In cancer alone,
Kathryn Joanne M. Moscoso
BS Pharmacy 4B February 2, 2019
the industry launched five new molecules or combination products in 2014. In term of employment, the report said that
pharmaceutical companies, distributors and retailers employ more than 60,000 Filipinos and support close to 100 other
industries, including the chemical industry. The report also cited a report by the National Tax Research Center (NTRC)
which showed that as of 2012, there were close to 50,000 retail outlets and more than 6,000 drug distributors nationwide.

From 2006-2012, the NTRC reported that the Bureau of Internal Revenue (BIR) collected a total of P119 billion in
taxes from the broader pharmaceutical industry, comprised of pharmaceutical companies, distributors and retailers. In
2012 alone, manufacturers, wholesalers and retailers paid P20 billion in taxes. For every peso that pharmaceutical
manufacturers spend generates 2.5 of output in other local industries, the report noted. “Filipinos today are living longer,
healthier and more productive lives—thanks in large part to the government’s commitment to implement crucial health
reforms, particularly the adoption of Universal Health Care as a flagship social agenda,” stated the report.