Consulting firm GlobalData projects the growth of the Philippines pharmaceutical market to be around $4 billion by 2020. Factors that will drive the market’s growth include strong patent and trademark laws, as well as the government’s support of generic alternatives in both the public and private sectors.
In terms of investment opportunities, GlobalData believes the pharmaceutical market in the Philippines is ripe for the picking. Aside from the country’s open economic system, it also supports a BOT or build-operate-transfer investment scheme, which allows private companies to recoup their initial investment in a reasonable amount of time.
Here are four more things to know about the pharmaceutical market in the Philippines if you are currently considering the country for investment opportunities.
1.Generics Dominate the Market
Paulyn Jeal Ubial, the current Department of Health (DOH) secretary, confirmed that generics enjoy 65 percent of the total pharmaceutical market when it comes to volume sales. This is mostly due to the passing of the Cheaper Medicines Act of 2008, as well as the efforts of the current administration to promote generics use.
Local and foreign manufacturers have both taken advantage of this fact, with the latter accounting for more than 75 percent of the Philippines’ pharmaceutical market. Big players include GSK (GlaxoSmithKline), Sanofi, and Pfizer, while the largest domestic drug companies are Natrapharm, United Laboratories, Pascual Laboratories, and GC International.
2.High Demand for Medicinal and Pharmaceutical Products
According to http://investphilippines.gov.ph, the Philippines pharmaceutical market is comparable to Pakistan and Thailand when considering the overall market. Where per capita is
concerned though, it is more similar to China and Iran. As for market size in the Asia-Pacific region, the Philippines closely follows Indonesia and Thailand.
Products are classified as either drug or non-drug, with the former further classified as either prescription or OTC (over-the-counter). For a clearer distinction, drugs are used in the diagnosis, cure, mitigation, treatment or prevention of diseases, while nutritionals (health food), infant formulas, baby care, cosmetics, diagnostic and other medical devices are considered non-drugs.
70 percent of total sales in the Philippines can be attributed to prescription drugs. OTC items, on the other hand, take up 24 percent of the market share. The rest accounts for the remaining share of the pie. Distribution is either through drug stores (about 85 percent) or hospitals and doctors’ clinics (15 percent).
Among the top 20 pharmaceutical companies globally, 14 have manufacturing facilities in the country. Local manufacturers are also on the rise with multinational drug companies growing at a steady rate year to year.
Patents and trademarks are heavily protected under the Intellectual Property Code of the Philippines, which metes out harsh penalties for violations thereof. It is said that the approval of the Universally Accessible Cheaper and Quality Medicines Act of 2008 has allowed for increased consumption of much-needed pharmaceuticals, regardless of socio-economic status.
Other quick facts to consider:
● There is an increase in importation of pharmaceuticals, averaging at 11.34 percent from 2005 to 2010.
● Increase in population will also drive the demand for pharmaceutical products.
● Total family expenditures for drugs and medicines continue to grow annually.
● Steady increase of government and private hospitals will also push the demand for pharmaceuticals.
● The same can be said of medical practitioners, particularly medical doctors.
3. Business Requirements
Only a select number of foreign pharmaceutical companies do their own manufacturing in the country. Mostly they import and distribute products and outsource production to local manufacturers.
Both local and foreign manufacturers should meet GMP (Good Manufacturing Practice) standards, aside from completing requirements including but not limited to:
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Legal entity registration
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Business permits from local municipality
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Income tax registration Import license
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Market authorization as Importer and/or Distributor
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Registration to Department of Labor and Employment (DOLE); and
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Product license approval
prior to marketing and sale of pharmaceuticals. Foreign manufacturers may opt to establish business partnerships with local Market authorization holder to import, distribute, and obtain product license approval on their behalf. This will save time and operational costs for foreign manufacturers. Getting the aid of local experts is also very much recommended as the process of completing business requirements is one of the most crucial stage of doing business in the Philippines.
4. Philippine Pharmaceutical Regulations
Certain commodities including pharmaceuticals are regulated or prohibited in the Philippines. The main regulatory body for pharmaceutical regulations in the country is the FDA or Food and Drug Administration.
The FDA is the Philippines’ regulatory authority responsible for the implementation and enforcement of all regulations pertaining to pharmaceuticals, medical devices, cosmetics, food, household hazardous substances, and diagnostic reagents. Operation of manufacturers, importers, exports, distributors, wholesalers, and other facilities related to health products are also under the jurisdiction of the FDA.
Prior to license approval, the FDA requires all foreign manufacturers to submit their respective manufacturing facilities to site inspection. If they pass the inspection, a cGMP clearance certificate shall be issued and apply for new application of certificate of pharmaceutical product.
Pharmaceutical dossier submission must be in Asean Common Technical Document format which includes administrative data & product information, quality document-study reports, nonclinical document, and summary of clinical study.
For product labeling of pharmaceuticals including herbal medicines, FDA strictly implements generic labeling guidelines for human use as the labeling materials are the primary source of information for consumers. Noncompliance can result in fines, suspension, cancellation or revocation of any license, permit or registration issued by FDA.
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