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News&Updates » Philippines Pharmaceutical Market in 2020
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 Philippines' pharmaceutical market is expanding at its fastest pace in decades. Its market has been growing at a rate of 12–14 percent annually. The Filipino drug market is set to reach $4.3 billion by 2014. This would put the country on par with Taiwan and Indonesia, in terms of size.

The population of the Philippines amounted to approximately 99.2 million in 2013, making it the 12th most populated country in the world. Population growth has primarily been due to a high birth rate and rising life expectancy. An increased elderly population is however a matter of concern for policy planners. The value of the pharmaceutical market in the country amounted to $4 billion in 2013, and it is expected to increase at a CAGR of 9.4% to reach approximately $8 billion in 2020. The positive trend in the healthcare market of the Philippines can be attributed primarily to the following factors


Generic substitution in both the public and private sectors, which has been a driver for the manufacture of generic drugs - Increased expenditure on medicines by Local Government Units (LGUs) - Government initiatives for the prevention and management of chronic diseases - An improved and updated regulatory environment. In 2012, foreign pharmaceutical companies captured 70 percent of the Filipino market. That is less than in previous years, when market share was 80 percent. GlaxoSmithKline, Novartis and Sanofi are among the largest foreign pharmaceutical companies doing business in the Philippines. Among domestic drug companies, United Laboratories, Pascual Laboratories, GC International and Natrapharm are the largest.


The generics segment is increasingly important in the Philippines. In addition to local manufacturers, many foreign manufacturers are entering the market. Some of the fastest growing companies include Novartis' generic arm Sandoz, Taiwan's Orient Europharma (OEP) and Getz Pharma of Pakistan. To compete with these generic and off-brand products, many multinational companies are reducing the prices of some brand name drugs by as much as 50 percent. Drug pricing levels are higher in the Philippines than in almost any other Asian country. Poor purchasing practices by Filipino hospitals, high retail markups and the prohibitive cost of importing pharmaceutical ingredients are just a few reasons for this. Other reasons include low rates of health insurance and low rates of coverage for outpatient drugs. To increase healthcare access, the Filipino government has mandated price controls on certain essential drugs. In 2008, it passed the Universally Accessible Cheaper and Quality Medicines Act. This act granted the president and the secretary of health the power to impose maximum retail prices on drugs included in the Philippines' Essential Drug List (last released in 2008).


President Arroyo did so for the first time in August 2009. Under the new act, she mandated a 50 percent price reduction on 21 molecules and their preparations. This affected drugs including Pfizer's hypertension drug Norvasc and GlaxoSmithKline's antibiotic Augmentin. Fearing further cuts, foreign drug companies voluntarily cut prices on an additional 16 drugs.


Product registration
Companies that are involved in the manufacture, import, export, distribution, retailing, packaging and re-packaging of pharmaceuticals in the Philippines must obtain a License to Operate (LTO) before they can register their product with the Philippines Food and Drug Administration (FDA). An LTO takes one to two months to process.
Pharmaceutical product registration requires the following information:
• LTOs from the manufacturer, distributor and / or importer
• A Certificate of Agreement between the manufacturer and distributor or the manufacturer and importer for the product being registered
• The Application for Registration of Pharmaceutical form
• Information on product formulation and dosage
• A Certificate of Analysis and Specifications for all raw materials
• Information on the manufacturing process, including procedure, in-process controls, production equipment and packaging procedure
• Labeling materials
• Stability studies
• A product sample (which should include English labels for the product registration number, the generic and brand names, the name of the product license holder, indications for use, dosage, warnings and precautions, the batch number and the expiration date).

Manufacturing and distribution

Very few foreign pharmaceutical companies do their own manufacturing in the Philippines. Instead, they import and distribute finished pharmaceutical products, or they import drug ingredients and outsource production to local manufacturers.
One domestic manufacturer dominates production for most foreign pharmaceutical companies in the Philippines. Interphil Laboratories handles contracts from 15 of the 20 biggest foreign pharmaceutical companies doing business in the Philippines. In 2009, it managed 90 percent of Wyeth's local drug manufacturing. In the same year, it managed all local manufacturing for Pfizer.
Aside from Interphil, there are few other major manufacturers that meet international standards. Other firms that service foreign pharmaceutical companies include Hizon Laboratories, Swiss Pharma and Euro-Med Laboratories. All domestic and international manufacturing facilities producing drugs for the Philippines' market are required to meet Filipino Good Manufacturing Practice (GMP) standards.


Foreign companies in the Philippines
Altogether, there are more than 500 drug traders, 700 drug importers, and 5,000 drug distributors in the Philippines. However, three quarters of the top 20 pharmaceutical companies are foreign. In addition to GlaxoSmithKline, Novartis and Sanofi, they include Pfizer, Wyeth, Abbott Laboratories, AstraZeneca, Johnson & Jonson and Bristol Myers Squibb.
Unlike most foreign pharmaceutical companies, GlaxoSmithKline conducts its own manufacturing in country. It has the largest MNC manufacturing facility in the Philippines, which it uses to produce drugs for both the Philippines and other Southeast Asian markets.
Other foreign pharmaceutical companies are using the Philippines as a base for expansion into the rest of Southeast Asia. In 2009, for example, Novartis established its Southeast Asian headquarters just south of Manila. The company also plans to conduct clinical trials in the Philippines for many of its future key products, especially vaccines.



    
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