Not even a whimper

It began with a huge bang 17 years ago but not much has been heard of it since.

The Generics Law exploded like a Daisy Cutter bomb onto the Philippine pharmaceutical scene in 1987. At the time, it threatened to blow away expensive branded pharmaceuticals and their makers and replace them with cheaper (but equally effective) generic medicines the masses could well afford.

It also ignited a painful debate on the pros and cons of generic medicine that saw the medical profession come down on the side of branded medicines, while the government of President Cory Aquino led by contentious health secretary Alran Bengzon championed generics. The public was caught somewhere in-between.

The government won. Generics today account for over 80% of total pharma industry revenues. The pharma companies won, too. Branded medicines, now more expensive than ever, are still with us.

And the public doesn’t seem to care that much about branded or generic medicine. Just as long as the medicines they buy make them well.

Eufe Tantia, assistant vice president of the Pharmaceutical and Healthcare Association of the Philippines (PHAP), noted the government used to mark Generics Month in September with lavish activities aimed at drumming up the advantages of generics against branded drugs.

“I can’t remember the last time the government celebrated Generics Month,” he said.

He’s certain the government did make a big deal out of promoting generics before. As national sales manager of pharma firm Eli Lilly Philippines, Tantia recalls being invited by the Department of Health to heavily promoted Generics Month activities in the late 1980s and early 90s.

Now, only Mercury Drug Corporation apparently bothers to celebrate Generics Month big time. This year, Mercury had a Generics Awareness Month 30-day Sale at all its branches nationwide. From the government, not even a whimper.

But the government’s apparent lack of interest in aggressively pushing generics doesn’t unduly worry Tantia.

“The Generics Law has been successful in providing access to a wider range of medicines,” he pointed out. “What is important is that the public knows it has a choice.”

Tantia, however, bemoans the dearth of public information about generics. But this is probably more a question of priorities as President Arroyo’s cash strapped government struggles with a dangerous fiscal crisis.

The bold decision of the Aquino administration to introduce generic alternatives to branded drugs, however, is widely seen as being a healthy shot in the arm for consumers and the pharma industry.

That industry today is dominated by generics. In 2003, the total pharmaceutical market was worth from P75 to P80 billion and grew 9% over 2002.

Tantia estimates that branded generics accounted for some 80% of the total while pure generic products made up only 3% of total market. Prescription medicines took care of the remaining market share. Another source said branded generics had an 18-20% compound annual growth rate over the last five years.

Branded generics are medicines whose patents have expired and are sold under the name of the company making them (RiteMed Paracetamol and Pharex Ciprofloxacin, for example). There is no brand name in this case (such as Biogesic or Ciprobay).

Tantia said that industry projections show revenues in 2004 exceeding 2003. This growth, however, is being driven by price increases. Volumes are expected to remain flat.

“Pharma industry growth is being driven by branded generics and new products such as Lipitor, Viagra and Cialis,” according to Tantia.

Tomas Agana, president of Pharex Health Corporation, one of the two leading generics manufacturers, concurs that branded generics is the leading growth driver for the pharma industry.

“We’re experiencing double digit growth over last year,” said Agana. “Growth is still very positive for the entire year despite recent economic news.”

The other generics leader is RiteMed, a division of United Laboratories, the country’s largest pharma firm. Pharex is a wholly owned subsidiary of Pascual Laboratories. Both firms control about 60-70% of the market for branded generics.

Pharex is particularly strong in Metro Manila and Mindanao. Agana revealed that much of Pharex’s growth came from its antibiotic products such as amoxicillin, erythromycin and cloxacillin.

Revenue growth is being helped along by a growing awareness about generics by the public and the increasing number of prescriptions from doctors. Agana said Pharex is helping increase public awareness of generics by conducting plant tours and explaining their products’ quality efficacy profiles.

Because of its cheapness, generics are more ubiquitous than branded pharmaceuticals. This price advantage has led to an increasing number of generics such as paracetamol, loperamide and carbocisteine becoming available in sari-sari stores alongside soft drinks and instant noodles.

Some enterprising entrepreneurs are doing big business supplying sari-sari stores and small drug stores with a broad range of generics. It’s a lucrative small-scale business at the barangay level.

Paracetamol, used for slight fever and minor body pains, is available from P0.40 to P0.60 per 500mg pill wholesale. Barangay generics businessmen sell these pills to sari-sari stores at about P1.00 each, and these stores retail them at anywhere from P1.50 to P2.00. Considering that Biogesic, the popular branded paracetamol, retails at P3.50 and up in sari-sari stores, it’s small wonder that generic medicines are running away with business at the barangay.

More bothersome, however, are reports that some sari-sari stores now retail amoxicillin, an antibiotic that should be available only through prescription at registered pharmacies. Some doctors are concerned that the cheapness of generics might well lead to other, more potent generic antibiotics such as cefalexin or diabetes control drugs such as metformin becoming available at sari-sari stores without a doctor’s prescription.

Combating this looming proliferation of generic antibiotics and other prescription drugs with generic equivalents is not helped any by the worsening brain drain among doctors.

Recent reports that the Armed Forces of the Philippines is finding it difficult replacing doctors and nurses lost to foreign countries is yet another painful manifestation of a brain drain now so severe that hospitals are unable to open more floors because they lack qualified medical personnel.

“It’s the economy,” said Dr. Perla Santos-Ocampo, who for six years was Chancellor of the UP College of Medicine in Manila. She was also past president of the Philippine Medical Association and is now president of the National Academy of Science and Technology (NAST).

“It’s getting tougher (for doctors) because patients are not coming unless they are very sick,” she explained. “For the middle class and lower middle class, the salaries they have go to food and the schooling of children.”

This clear link between the health of the economy and that of the medical profession means that the tough times battering the medical practice will persist as long as the economy remains in trouble.

“Long-term we (doctors) can’t do a thing about the economy. Short-term, we can increase the stipends of residents but many hospitals are in the red. Something has to be done,” she said.

Her concern for residents is understandable: residents are frontliners in the healthcare system. They’re usually the first doctors patients come into contact with at hospitals, hence their key role in diagnosis and treatment.

The problems are tougher on new doctors who have to contend with expensive rents and equipment should they open their practice in Metro Manila. It’s somewhat easier in the provinces, especially if a doctor decides to set up practice in his community.

Dr. Marisa Sarreal, a general pediatrician in the practice for 24 years, echoes Dr. Santos-Ocampo’s observation about the economy being the crux of the problem facing the medical profession.

“It’s really tougher now because of the economy,” she stated. “Nobody’s saying I’m not affected by the present economic situation. It’s gradually becoming tougher because even with the same volume of patients, expenses are becoming bigger.”

She copes by belt tightening (no easy task for a mother of six) and by smart business sense. She works out of her home in residential Baclaran and hasn’t increased her consultation fee.

“Maintaining my fee is one way to keep patients. It’s give and take. I tell them I’ll help them by not increasing my fee but ask them to help me by consulting with me when their children get sick. My patients keep coming back to me.”

But the more serious problem facing practicing physicians is what doctors call “The Nursing Phenomenon.” It’s that tragic scenario where practicing doctors choose to take up Nursing to get out of the country and earn more.

“In the Philippine setting, it’s really something,” said Dr. Santos-Ocampo. “Even doctors with good practices are taking up Nursing. Their main purpose is to get out of the country.”

Although it’s still studying the phenomenon, NAST estimates that about one-third of those who passed last year’s Nursing board exam were graduates of other courses. Not all of these two-course graduates finished medicine, but NAST believes medical graduates accounted for a good portion of the total.

The Philippine Nurses Association, however, estimates that some 2,000 doctors enrolled in nursing schools nationwide while the National Institute of Health Policy Development says the number is close to 3,000, or twice the number of licensed medical practitioners produced each year. Some 100 physicians took the nursing board exam in June 2002.

For her part, Dr. Sarreal mourns more the loss of highly skilled specialists to Nursing. She tells of Pediatric Surgeons and OB-Gynecologists who gave up their practice and are now taking up Nursing to land sure jobs abroad.

Dr. Sarreal isn’t opting for foreign work, even for the higher pay a nursing career offers abroad. “I began my practice here and I’m going to end it here. It’s my country and it needs me,” she said.

The large-scale shift to Nursing means fewer applicants in medical schools, which means that medical schools have less money to spend on good teachers and equipment. Data from the Commission on Higher Education (CHED) show that medical enrollments have been dropping since 1994. CHED records reveal that there were only 27,000 medical graduates in 2001, 30,000 in 2000 and 34,000 in 1998 and 1999.

The United States and Europe, however, are sucking the Philippines dry of this dwindling supply of medical talent at a time when domestic demand for healthcare workers is surging.

There were 348,000 domestic vacancies for healthcare workers in 2002 compared to 314,000 in 2001. In contrast, the USA will have over 700,000 vacancies for registered nurses from 2002 to 2012. And far better pay scales. Japan now needs over one million nurses while 17,000 Filipino nurses migrated to the United Kingdom in 2003.

Despite the manifold problems besetting the medical profession, Dr. Santos-Ocampo says the quality of Filipino doctors remains high.

“Our doctors are OK. We have maintained the high quality of medical training by being very strict in the board exams.”

The high failure rate testifies to the success of this unyielding emphasis on quality. Last year’s board exam saw 1,183 examinees pass out of 2,301 candidates, a success rate of 51%.

And it is in this consistently high quality of Filipino doctors that rests the only certain hope that the medical profession will emerge stronger from the fearful crises facing it.