Boston, MA -- (SBWIRE) -- 12/13/2012 -- BMI View: Access to healthcare will continue to be limited by poor drug-pricing legislation in the Philippines. Although this has negative implications for patients, there remain short-term revenue growth opportunities for pharmaceutical firms, distributors and retailers, given the higher mark-ups achieved on medicines. Importantly, we caution that such ineffectiveness will also prevent the country from implementing universal healthcare coverage by 2016, unless it can properly address the issue of drug affordability. Over the longer term, we anticipate improvements to the regulatory environment and, as a consequence, the potential for cost-containment in relation to drug prices. This may ultimately improve patients' access to drugs, generating greater sales volumes for pharmaceutical firms.

Headline Expenditure Projections

- Pharmaceuticals: PHP126.04bn (US$2.91bn) in 2011 to PHP129.33bn (US$2.89bn) in 2012; +2.6% in local currency terms and -0.8% in US dollar terms. Forecast unchanged from Q312.
- Healthcare: PHP364.95bn (US$8.43bn) in 2011 to PHP407.67bn (US$9.10bn) in 2012; +11.7% in local currency terms and +8.0% in US dollar terms. Forecast unchanged from Q312.
- Medical devices: PHP14.12bn (US$297mn) in 2011 to PHP14.99bn (US$335mn) in 2012; +6.1% in local currency terms and +12.6% in US dollar terms. Forecast unchanged from Q312.

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Risk/Reward Rating: At 45.7 out of the maximum 100 points, the Philippines' score in Q412's Pharmaceutical Risk/Reward Ratings (RRRs) is unchanged since the previous quarter. The country, however, now ranks 14th out of the 18 markets surveyed in the Asia and Pacific region, having previously been 13th. Both the Philippines' risk and rewards components remain below the regional average, indicating subdued longer term prospects for research-based multinationals, despite the already larger and still fast-growing population.

Key Trends And Developments

- In June 2012, licensed drug stores in the Philippines were found to have been breaking the Special Law on Counterfeit Drugs (Republic Act 8203), according to the head of Regulation Division 1 of the country's regulatory agency. A large number of licensed community drug outlets buy counterfeit drugs from peddlers - as well as from licensed distributors - at lower prices. These stores will face administrative and criminal sanctions, including a maximum prison sentence of 10 years and damages of up to PHP500,000 (US$11,802), Getes said.
- In the same month, the Philippine house of representatives approved the PINOY Health Insurance Act to provide comprehensive and universal healthcare services to the citizens. Retirees and pensioners using the Social Security System and the Government Service Insurance System, as well as life-time members and enrolled people in need, will not be required to pay monthly contributions to be entitled to programme's benefits.

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