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THIRTEENTH CONGRESS OF THE REPUBLIC ) OF THE PHILIPPINES 1 *s a”jl$& ”“.2 p 5 :
Second Regular Session )
S E N A T E ~~~~~~~~ 8V : -+&izL-
COMMITTEE REPORT NO. %
Submitted b Finance on
on Health and Demography, Trade and Commerce, and
Re : Proposed Senate Resolution Nos. 40 and 122
Recommending the adoption of this Report and the implementation of its recommendations
Sponsors : Senators Cayetano, Ejercito Estrada (L.) and Revilla Jr.
Mr. President:
The Committees on Health and Demography, Trade and Commerce, and
Finance, to which were referred P. S. Res. No. 40, introduced by Sen. Ejercito-Estrada
(L.), entitled:
“RESOLUTION DIRECTING THE SENATE COMMITTEE ON ’HEALTH AND DEMOGRAPHY TO INVESTIGATE, IN AID OF LEGISLATION, THE ALLEGED PROLIFERATION OF COUNTERFEIT MEDICINE IN THE MARKET”
and P. S. Res. No. 122, introduced by Sen. Revilla Jr., entitled:
“RESOLUTION URGING THE APPROPRIATE SENATE COMMITTEE TO CONDUCT AN INVESTIGATION, IN AID OF LEGISLATION, INTO THE PROLIFERATION OF FAKE DRUGS IN THE COUNTRY IN ORDER TO COME UP WITH CORRECTIVE LEGISLATION IN RESPONSE TO THE SAID PROBLEM”
have considered the same and have the honor to submit this Report to the Senate wirh
the following findings and recommendations:
I. FINDINGS
A. PROLIFERATION OF COUNTERFEIT DRUGS
2 COMMITTEE REPORT on P.S. Res. Nos. 40 and 12;’
1. The proliferation of counterfeit medicines’ is a global problem. A World Health
Organization (WHO) survey (Jan. 1998 - Oct. 2000) on counterfeit drugs containing
reports from 20 countries showed that 60% of the reported cases of counterfeit drugs
came from developing countries and the remaining 40% from industrialized countries
The World Health Organization (WHO) noted that the actual extent of the problem on
counterfeit drugs may not be established because of the lack of surveillance mechanism
at the international and country level. Only a few countries report cases of counterfeit
drugs to WHO.
2. In the Philippines, the data provided by the Bureau of Food and Drugs, the
country’s drug regulatory agency, revealed that a total of 63 drug products they seized
in 2005 are medicines with less than 80% of active ingredients. The commonly
counterfeited drugs include among others paracetamol, mefenamic acid, antibiotics (Le.
cotrimoxazole, ciprofloxacin) and vitamins (Le. Enervon C and Ceelin).
The Pharmaceutical Healthcare Association of the Philippines (PHAP), an
umbrella organization of multinational drug companies in the Philippines cited higher
figures culled from various news reports:
Eight percent of drugs bought were fake based on recent survey of
pharmacies in the Philippines (Philippine Star, May 27, 2002)
The Bureau of Food and Drugs (BFAD) reported that 80% of counterfeit
drugs are actually imported drugs, which are not registered with BFAD.
These drugs are smuggled in Mindanao and North Luzon (Philippine Daily
Inquirer, January 26, 2002).
The former BFAD Director William Torres and legal officer Atty. lreneo
Galicia were quoted in newspapers and radio interviews stating the 30%
of the drug outlets visited by BFAD sold counterfeit drugs.
Counterfeit medicines, as used in this Committee Report, may refer to medicinal products which contain incorrect andlor substandard ingredients or unregistered imported drug products. The complete definition of counterfeit medicines, as stated in Section 3 (b) of Republic Act No. 8203, is enumerated on pages 4 and 5 of this report.
1
3 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
According to the Health Secretary Manuel Dayrit an estimated 10% of the
pharmaceutical market in the country are counterfeit drugs.
In 2004, twenty percent (20%) of the medicines confiscated by the Bureau
of Food and Drugs were substandard, the rest or 80% were unregistered
imported drug products (Manila Bulletin, February 6, 2002).
0
It must be noted however, that these news reports failed to distinguish whether
the alleged "fake" or "counterfeit" drugs were substandard or unregistered with BFAD,
based on the definition of "counterfeit drugs" under Republic Act No. 8203 (R.A. 8203)'
8. RELEVANT LAWS ON COUNTERFEIT DRUGS
There are four laws that aim to protect consumers and guarantee the safety and
efficacy of drugs:
1, Republic Act No. 3720, "Food, Drug and Cosmetics Act" - gives the mandate to
the Bureau of, Food and Drugs as the government's regulatory body to ensure the
safety, efficacy and quality of food, drugs and cosmetics. Chapter VI, Sections 11 and
12 prohibit the adulteration, mislabeling or misbranding of any drug, device, food and
cosmetic and prescribe corresponding penalties. Under Chapter VIII, Section 18, a drug
is deemed adulterated if its strength differs from or its quality falls below the standard
set by the BFAD.
2. Executive Order No. 775, Series of 1987 - amends Republic Act No. 3720 (R.A.
3720). Section 7 amends the definition of prohibited acts under Section 11 of R.A. 3720
to include importation, exportation and distribution of adulterated or misbranded food,
drug, device or cosmetic, while Section 8 further expands the list of prohibited acts to
include the manufacture, importation, exportation, sale, offering for sale, distribution or
transfer of any drug or device which is not registered or has no license from the BFAD,
and the sale of any drug beyond its expiry date. Furthermore, Section 15 provides that
no person shall manufacture, sell, offer for sale, import, export, distribute or transfer any
' . The complete definition of counterfeit medicines, as stated in Section 3 (b) of Republic Act No. 8203, is enumerated on pages 4 and 5 of this report
4 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
drug or device without first securing a license to operate from BFAD. It also specifies
that new drugs must be registered before it is manufactured, sold, imported, exported,
distributed or transferred.
3. Republic Act No. 7394, “Consumer Act of fhe Philippines” - provides the same
definition of adulterated drugs in R.A. 3720. Article 31 requires the registration of drugs
or devices with BFAD before these can be manufactured, sold, offered for sale,
imported, exported, distributed or transferred.
4.
drugs as:
Republic Act No. 8203, “Special Law on Counterfeit Drugs”- Defines counterfeit
e Medicinal products with the correct ingredients but not in the amounts as
provided, wrong ingredients, without active ingredients, with insufficient
quantity of active ingredient, which results in the reduction of the drug’s
safety, efficacy, quality, strength or purity.
A drug that is deliberately and fraudulently mislabeled with respect to
identity and lor source or with fake packaging and can apply to both
branded and generic products. ,
The drug itself, or the container or labeling thereof or any part of such
drug, container or labeling bearing without authorization the trademark,
trade name or other identification mark or imprint or any likeness to that
which is owned or registered in the Bureau of Patent, Trademark and
Technology Transfer (BPTT) in the name of another natural or juridical
person:
e
e A drug product refilled in containers by unauthorized persons if the
legitimate labels or marks are used;
. An unregistered imported drug product, except drugs brought in the
country for personal use as confirmed and justified by accompanying
medical records; ;
5 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
C.
I .
0 A drug which contains no amount of, or a different active ingredient, or
less than 80% of the active ingredient it purports to possess, as
distinguished from an adulterated drug including reduction or loss of
efficacy due to expiration.
Factors Encouraging the Proliferation of Counterfeit Drugs
Weak Regulatory Agencies
a. Bureau of Food and Drugs
BFAD does not have the necessary financial and human resources to
carry out its mandate effectively. In terms of manpower complement, BFAD has
only 393 personnel, less than half of which are doing technical work. There are
150 food and drug regulation officers, 40 in Metro Manila and 114 in 15 regions
(or about 7 per region) to inspect and monitor 39,000 establishments and 55,000
food, drug and cosmetic products. The ratio therefore of regulation officer to
establishments and products is 1 is to 39,367.
Moreover, its legal division, which is responsible for processing
administrative cases like counterfeit drugs, has only one lawyer. To address this
situation, a lawyer from the Department of Health central office was reassigned
to the Bureau to handle some of the cases. The legal division has actually six
plantilla positions, but only one is filled up probably because the low salary
offered does not entice lawyers to work in BFAD, as testified to by BFAD Dir.
Leticia Barbara Gutierrez. Currently, the lone lawyer of BFAD, who is the Officer
in Charge of the Legal Compliance and Information Division, occupies a position
with corresponding salary grade 23 (P20,020.00), which is lower compared to the
Officers in Charge of other government agencies who occupy positions with
corresponding salary grade 25. The other plantilla positions available for lawyers
in the BFAD have corresponding salary grades ranging from Attorney 111 - Salary
Grade 21 (P18,510.00) to Attorney V - Salary Grade 25 (P21,655.00)
6 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
Aside from monitoring food, drug and cosmetic products, BFAD js also
tasked to implement provisions of several laws on food fortification, salt
iodization, and tobacco regulation, among others. Despite the many tasks and
functions assigned to BFAD, there is no corresponding increase in its budget
appropriations to enable the agency to hire more personnel and offer competitive
salaries. The table below shows that the appropriations for BFAD have not
increased since 2002. In fact, the 2005 budget is lower than the budget in 2003.
Moreover, the budget for personnel services had significantly decreased from
P84.1 million in 2002 to P79.9 in 2005.
Table 1. BFAD Appropriations CY 2002-2005
Personnel
services
Maintenance
and Other
Operating
Expenses
Capital Outlay
Total
CY 2002
P84, 171 :OOO
P I 11, 765,000
P195, 936,000
CY 2003
P79,766,000
P40,455,000
P1,000,000
P121,221,000
CY 2004
P79,766,000
P40, 455,000
P120,221,000
-,
CY 2005
P79.983,OOO __
__ P40,455,000
-
PI 20,438,000
Source: Bureau of Food and Drugs
To solve the problem of inadequate funds and lack of personnel, BFAD
has submitted a proposal to the Department of Budget and Management (DBM)
increasing its budget to P237 million and creating 240 new positions. Under the
proposal, which is pursuant to Executive Order No. 366, "Directing a Strategic
Review of the Operations and Organization of the Executive Branch," there will
be an additional 135 food and drug regulation officer^.^
The budget allotted for BFAD in the 2006 Budget Proposal remains at P120M. According to the DOH Legislative Liaison Officer, new positions have yet to be created as the DOH and other agencies under the Executive are still undergoing re-organization pursuant to EO 366.
7 COMMITTEE REPORT on P.S. Res. Nos 40 and 122
To augment its insufficien,t budg,et, the BFAD had also requested the DBM
to allow a hundred percent utilization of their income from registration and other
fees. In the previous years, the DBM allowed BFAD to utilize only a portion of
their income. However, under the 2005 General Appropriations Act, BFAD has
finally been allowed to utilize 100% of its income,4 which however, cannot be
released without a special a l l~cat ion.~
b. Bureau of Customs , ,
R.A. 8203 classifies imported drugs which are not registered with BFAD
as counterfeit drugs except for medicines declared for personal use. As
mentioned earlier, BFAD acknowledged that 80% of the counterfeit drugs in the
country are unregistered imported drugs smuggled into the country. An importer
must have a license to operate and certificate of product registration.
The Bureau of Customs (BOC) is the government agency that is in-charge
of apprehending smuggled goods entering the Philippine ports. If the volume of
fake drugs that BFAD claims to be imported is accurate, then the BOC has not
been effective in curbing the entry of counterfeit imported drug products into the
country as evidenced by the insignificant number of apprehensions they made
last year. In 2004, the BOC only managed to seize several packages of
undeclared medicines usually brought in by airline passengers despite reports of
many large shipments of unregistered imported medicines that came in.
Part of the problem is the selective system used by the BOC in examining
the shipments passing through the ports of entry. To prevent congestion in the
pier, the BOC does not examine all the shipments that come in unless it is
marked red in the computer system, indicating that examination must be done. A
green mark indicates that the shipment can be released without examination and
Based on data from the Bureau’s finance department, in 2005, BFAD was able to generate an income of approximately PI26 M.
The Department of Health is currently negotiating with DBM for the inclusion of the income retention provision in succeeding GAAs until such time that a law granting BFAD income retention capacity has been passed.
4
8 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
a yellow mark means it only requires documentary check. Even for the shipments
marked red, it is not feasible. for the BOC to conduct a hundred percent
examination of a 20 or 40 feet container van. For instance, if the shipment has
four containers vans, they only examine about 10% of the contents of the two
container vans. On top of this constraint, the BOC personnel do not have the
necessary skills to identify whether a particular shipment of medicines is
counterfeit or not. At the time of the initial hearing, BFAD had not yet trained
BOC personnel on the proper procedure for the detection and confiscation of
counterfeit drugs.6
The BOC points out that there are other modes of entry for imported
medicines such as parcels sent through air express consignments like Federal
Express or United Postal Service, which oftentimes are not declared. Moreover,
there are no clear rules and regulations regarding shipments of medicines
consigned to the Subic Bay Metropolitan Authority which is outside of their
jurisdiction and those used for medical missions.
Weak Enforcement of the Law
Under R.A. 8203, any or all of the administrative sanctions can be imposed: (1)
permanent closure of the establishment concerned and the revocation of its business
license; (2) fine of not less than P100,OOO.OO but not more than P500,OOO.OO and; (3)
forfeiture, confiscation, and destruction of products found to be counterfeit and the
equipment, instruments, and other articles used upon order of the Court.
2.
However, since the passage of RA 8203 in 1996, no person has been convicted
and no business entity has been closed for selling counterfeit drugs.
Based on the BFAD report submitted to the Committees, 330 administrative
cases in violation of RA 8203 were docketed in BFAD from 2000-2005. Of this number,
96 cases have been resolved, 9 cases are with motions for reconsideration and 225 are
According to Atty. Emil Polig, Officer in Charge of the Legal, Information and Compliance Division of BFAD, they have drafted a MOA with the Bureau of Customs to coordinate their efforts in solving the problem of counterfeit drugs.' However, it has yet been finalized. Currently, the draft MOA is with the Bureau of Customs for review.
6
9 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
still pending resolution. The erring pharmacies found guilty of violating the law were
meted out with fines but were not ordered permanently closed by BFAD.
Under the law, the process of apprehending suspected Counterfeit drugs and
filing of administrative cases is as follows:
A duly authorized BFAD officer can seize the drug product and take them
into custody, 1) only upon verified information on the existence of
suspected counterfeit drugs, and 2) after obtaining a search warrant.
If the drug is determined to be counterfeit after appropriate examination of
the samples, BFAD shall issue within 15 days from their seizure an order
of preventive closure of the business establishment for a period not
exceeding 30 days.
Administrative proceedings shall be initiated by the Bureau against the
offending parties to give them the opportunity to present evidence on their
behalf.
*
The implication of the abovementioned provisions is as follows: (i) despite strong
suspicion that a drug is counterfeit, an inspector still has to secure a search warrant to
seize this counterfeit drug as he has no power to immediately confiscate without prior
authentication and without the said warrant.; (ii) that pharmacies where the counterfeit
drugs were found may reopen their business while the administrative proceeding is on-
going, after the order of a 30-day preventive closure has lapsed. Because of the lack of
personnel in the legal department of BFAD, it takes several months to one year to
resolve the cases.
The law also expressly provides that administrative and criminal cases can be
filed separately provided that dismissal of the criminal case shall not lift the closure
order, except when it is a dismissal for lack of basis and that the withdrawal of the
criminal case shall not be a ground for the dismissal of the administrative proceedings.
The penalties include imprisonment ranging from 6 months to 10 years and a fine PIOO,
000 to P500, 000 for manufacturing and selling fake drugs. If the counterfeit drugs result
10 - COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
in death of a person, the penalty of life imprisonment and a fine of P500,OOO to P5
million shall be imposed.
BFAD has filed 13 cases in Court for violation of RA 8203, all of which have not
been decided. Two of these cases are subject to the Supreme Court's determination on
the constitutionality of RA 82037. However, an indefinite number of cases have been
filed by the different pharmaceutical companies for violations of both RA 8203 and the
Intellectual Property Code. BFAD entrusts these companies to pursue their own cases
because admittedly, they have the resources and technical knowledge io prosecute
counterfeiters. An example is the recently reported conviction of two individuals by
Branch 41 of the Regional Trial Court of San Fernando, Pampanga for selling
counterfeit versions of medicines manufactured by Glaxo Smith-Kline, Pfizer and Roche
and Wyeth.
3. High Cost of Medicines
The high cost of medicines in the country is one of the major problems affecting
the health sector. The World Health Organization (WHO) and the Drugstores
Association of the Philippines have acknowledged thaf the high price of medicines is a
contributory factor to the proliferation'of fake drugs.
Medicines are distributed to drugstores nationwide through a network of accredited
distributors, wholesalers and suppliers. Small drugstores have resorted to buying
medicines outside of the legitimate supply system (e.g. peddlers) because of the high
cost of drugs and the small margin of profit they get from purchasing from the
accredited distributors and suppliers. Unsuspecting consumers opt to buy the cheap
medicines sold in small drugstores, which may turn out to be counterfeit.
In 2000, under Administrative Order No. 85, the government undertook a parallel
importation program in an effort to make essential drugs accessible and affordable to
Filipinos and to bring down the prices of drugs in the market. The Philippine
According to Atty. Glenda Baysa, DOH Legal Officer who has temporarily been assigned to BFAD, these cases question Section 3 (b) of RA 8203 which declares unregistered imported drug products as counterfeit.
7
11 - COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
International Trading Corporation (PITC), the government's tralding arm, imports cheap
but quality medicines from other countries such as India and sell these in government
outlets at a much lower price than the medicines of the same brand sold in commercial
drugstores.
The PlTC is required to get a special license to operate and a certificate of product
registration from BFAD. To safeguard the quality of drugs under the program, PlTC
testified that the medicines it purchases'are of acceptable and good quality before these
are shipped into the country. Currently, BFAD conducts sampling of PITC products prior
to registration. After registration and before PlTC can start importing such drugs, BFAD
conducts another test of the samples. Upon arrival in the Philippines, BFAD randomly
tests some of the drugs before distribution to authorized and accredited outlets, such as
government hospital pharmacies, Botika ng Bayan outlets of PITC, and Botika ng
Barangay outlets of DOH. Furthermore, the field inspectors of BFAD conducts another
random sampling of the drugs which are being sold by the accredited retailers. In
addition, special label stickers are also placed on the boxes of medicines before these
are released.8
The parallel importation program is laudable, provided that the quality of imported
drugs is assured. However, its reach is limited as there are only a few Botika ng Bayan
outlets nationwide. Furthermore, the quantity of the imported medicines has gone down
from PI20 million in 2002 to about P40 million in 2005. The government needs to import
medicines equivalent to five or ten percent of the market or about P8 billion to make a
dent in the P80 billion local pharmaceutical industry and bring down the prices of drugs.
This means that the current importation is only one-half percent (1/2%) of the total
importation needed to make an impact and bring the prices of drugs lower.
, ,
Moreover, the Botika ng Barangay program of the Office of the President, through
the Department of Health, which is likewise aimed at bringing cheap but quality drugs to
the grassroots level sell only limited drugs and are subject to the limitation of having one
Per Atty. Emil Polig of BFAD, 8
12 ~ _ _ _ _ _ _ _ _ COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
pharmacist supervise several outlets. As such, these outlets, which are spread to the
barangay level, sell only over-the-counter drugs and eight kinds of prescription drugs,
i.e. 2 kinds each of hypertension, diabetes, asthma, and first-line antibiotics drugs, all of
which are sourced from PITC.
D. Multisectoral Cooperation
I . BFAD's efforts
Pursuant to its mandate under different laws and realizing the need to work with
other agencies, BFAD has pursued the following actions to stop the counterfeiting of
drugs in the market:
a. During all these years, BFAD has failed to conduct training for BOC
personnel for the proper determination and confiscation of counterfeit medicines.
As a result of the first hearing conducted by the Committees on October 6, 2004
however, the BFAD and the Bureau of Customs have agreed to draft a
memorandum of agreement (MOA) to coordinate their efforts in effectively
enforcing Section 30 of RA 3720, which mandates the BOC to randomly select
samples of incoming shipment of food, drugs and cosmetics for testing by BFAD.
Towards this end, the two agencies will issue rules and regulations on matters
relating to every incoming 'shipment of drugs, devices, foods, cosmetics and
household hazardous substances. Moreover, plans of conducting fora for
importers of drug, food, cosmetics, and household hazardous substances are in
the pipeline.
b. As a member of the Intellectual Property Rights Enforcement Action Panel
(IPREAP), organized by the Intellectual Property Office, BFAD has actively
participated in the formulation of a template ordinance that will punish the buying
and selling of counterfeit drugs.g BFAD has entered into an agreement with some
local government units such as Makati, Quezon City and Baguio City, so that
Based on data from the Intellectual Property Office, which serves as the IPREAP secretariat, the following cities and municipalities have passed ordinances on counterfeit drugs: Quezon City, Cebu City, Muntinlupa City, lloilo City, Naga City, Municipality of Tuba, and Baguio City.
9
13 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
they can implement such mecasure. The help of provincial governors have
already been sought in monito,ring the possible presence of counterfeit drugs in
their respective areas.
c. Being a member of the National Law Enforcement Coordinating
Committee (NALECC), BFAD, in April 2005, forged a MOA with the National
Bureau of Investigation and the Philippine National Police, which was recently
signed. The MOA mandates the assistance of the NBI and PNP to BFAD food
and drug regulation officers in the conduct of invesfigafion, surveillance,
application and execution of search and seizure warrants, and the apprehension
of manufacturers and other persons found dealing with counterfeit drugs and
other drugs regulated by BFAD, as well as the preparation and filing of
appropriate criminal actions against the perpetrators.
d. The formation of a BFAD and Philippine Pharmaceutical Association of the
Philippines (PHAP) Technical Working Group for counterfeit drugs. The Group
provides necessary information, such as suspected retail outlets selling
counterfeit drugs, to aid BFAD in effectively conducting its surveillance and
monitoring activities and in the execution of search and seizure warrants. Just
recently, counterfeit drugs were seized from a drugstore because of the tip
provided by PHAP to BFAD.
e. BFAD has started training its field inspectors to employ thin-layer
chromatography, which b a process of determining whether the samples
collected in the field contain the active ingredients they purport to possess. This
helps minimize the clogging of samples for laboratory analysis at the Laboratory
Services Division at the BFAD main office.
2. Coalition Against Fake Medicines
To show a concerted effort in dealing with the problem, the Coalition Against
Fake Medicines was formed in November 2004. It aims to address general concerns
14 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
about the proliferation of counterfeit medicines in the market, which pose a great danger
to the health and safety of Filipino consumers.
The Coalition has the following objectives:
a. To develop a public awareness campaign to help consumers to be vigilant
against counterfeit medicines;
To encourage drugstores to sell legitimate medicines;
To encourage government agencies to enforce the laws; and
To propose and assist legislators in causing amendments to existing laws
on counterfeit drugs
b.
c.
d.
The members of the coalition are the Department of Health (which includes
BFAD), Department of Trade and Industry, Department of Justice, Pfizer, Philippine
Medical Association, GMA 7, Philippine Daily Inquirer, Zuellig Pharma Corporation,
Drugstores Association of the Philippines and Mercury Drug Corporation. The Coalition
has started a public awareness program on counterfeit drugs and distributed information
and education materials in drugstores and other outlets. In addition, the member
organizations have pledged to undertake their respective organization’s commitment to
the Coalition. For instance, Zuellig Pharma has set-up the hotline 1-800-10-FAKEMED
where consumers can report Counterfeit drugs, GMA 7 and the Philippine Daily Inquirer
has provided the necessary media publicity, and the Department of Trade and Industry
has allowed the use of Consumer Welfare Desks for reporting counterfeit drugs.
I I . RECOMMENDATIONS
Based on the foregoing facts, the Committees recommend the following:
1. Strengthen BFAD by:
a. Increasing its budget to enable it to augment its manpower complement,
to upgrade its facilities and increase the number of testing laboratories all
over the country, and to purchase samples of drugs from different
pharmacies for random testing of suspected counterfeit drugs. The BFAD
15 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
budget has been pegged at P120M since 2003 and has thus affected the
operations of the Bureau and its various regional offices;
6. Allowing retention of the Bureau's income to be constituted as a Trust
Fund which the Bureau can utilize without need of a special allocation;
c. Increasing its personnel, particularly its prosecution arm, the legal
department, and the food and drug regulation officers. In order to attract
lawyers and other personnel to work with BFAD, an increase in the
compensation must be considered. The BFAD should also explore
alternative ways of complementing its personnel such as deputizing local
governments through their health units and the Philippine Drug
Enforcement Agency to conduct monitoring and surveillance. On the other
hand, DOH must support BFAD's initiative in addressing the problem. The
Regional Centers for Health and Development should assist BFAD
Regional Offices in its campaign against fake drugs.
d. Considering two measures referred to the Committee on Health: SB No.
1394 and SB No. 1093 both of 'which seek to establish BFAD testing
laboratories and field offices in all provinces and cities, which shall have
state-of-the-art testing equipment and adequate personnel complement.
e. Increasing the registration fee of a product to augment BFAD's income
and to do away with fly-by-night generics companies. At present,
registration fee is only P5,OOO for all products, which is ridiculously low
considering the tedious process involved and the income generated by the
pharmaceutical companies for each product.
2. For BFAD to pursue an agreement with various law schools for them to provide
assistance to BFAD's legal department in the resolution of administrative cases and
prosecution of criminal cases through their legal aid clinic.
3. Pursue the agreements reached under the Intellectual Property Rights
Enforcement Action Panel, particularly the passage of the template ordinance by local
16 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
government units (LGUs) accepting authority to execute BFAD powers against
counterfeit drugs. It is also suggested that a provision to permanently revoke the
licenses issued to establishments caught producing and selling counterfeit medicines be
included in the said ordinance.
4. For W A D and the BOG to tighten the procedures for the entry and release of
drugs from other countries in order to abate smuggling. Moreover, appropriate training
must be given to BOC personnel for the proper inspection and detection of counterfeit
medicines. Section 30 of RA 3720 as amended by EO 175 must be strictly enforced by
the BOC, especially on cases of suspected counterfeit drugs.
5. The enforcement of the full strength of the law, RA 8203, by meting out the
maximum penalties of fines, permanent closure of business and imprisonment to
violators to discourage drugstores from selling counterfeit medicines. This implies faster
resolution of both administrative and criminal cases, which is dependent upon the
strengthening of BFAD's capability.
6. The amendment of R.A. 8203 to:
a. Amend the definition of counterfeit to exclude unregistered imported
drugs to provide a distinction between unregistered imported drugs but are not
counterfeit and drugs which are counterfeit, i.e. containing less than 80% of the
active ingredients.
The abovementioned definition has also muddled the issue on the extent
of the problem of counterfeit drugs in the country. It is difficult to know the
magnitude of the problem because as reported in news articles, 80% of the
counterfeit medicines coming into the country are actually imported medicines
without the proper BFAD registration. To clarify the issue, it will be better to label
the said products as "smuggled drugs." Moreover, distinction must be made if the
smuggled drug is counterfeit or not imposing a stricter penalty for counterfeit
smuggled drugs. Under Articles 31 ad 40 of RA 7394, "The Consumer Act of the
I / COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
Philippines,” the importation of medicines without BFAD registration is a
prohibited act with correspondirig penalties.
Clarifying the definition of counterfeit drugs is also in line with the World
Health Organization’s (WHO) recommendation to adopt a universal definition of
counterfeit drugs to facilitate the exchange of information between countries, to
be able to establish the extent of the problem at the global level and to formulate
global strategies to address it. The WHO encourages countries to adopt the
following definition of counterfeit drugs:
“A medicine which is deliberately and fraudulently mislabeled with
respect to the identity and/or source. Counferfeifing can apply to
both branded and generic products and counterfeit products may
include products with fhe correct ingredients or with the wrong
ingredients, without active ingredients, with insufficient active
ingredients or with fake packaging.”
b. Allow the outright confiscation of drugs found to be counterfeit upon
the determination of probable cause by any authorized officer of the Bureau,
pending administrative investigation where the persons concerned are given
the opportunity to be heard.
7. For DOH and PlTC to implement strategies to lower the prices of medicines.
There is a need to look into expanding the parallel importation program of PlTC to
develop a bigger market for cheap but quality medicines. However, given concerns
raised on the efficacy and authenticity of the drugs, both PlTC and DOH, through BFAD,
should ensure the quality of the drugs brought in through parallel importation. PlTC
should ascertain that the sources of its products abroad are legitimate manufacturers.
BFAD, as the testing and screening arm of the government, should likewise guarantee
that the quality of the drugs brought in through parallel importation are at par with
international standards. Thorough testing and sampling of all batches of drugs imported
by PlTC should be conducted. Both PlTC and DOH must adhere to the strictest
18 - COMMITTEE REPORT on P.S. Res. Nos. 40 and 122
compliance of the laws and rules in the implementation of the parallel importation
program.
Considering that the importation of raw materials make up the bulk of the cost of
production of drugs, DOH or PlTC should consider importing raw materials and reselling
them to local manufacturers at a lower price to be able to bring down the cost of
production. Together with the Research Institute for Tropical Medicine (RITM), they
should also look into the possibility of bulk importation of finished products, the quality of
which have been assured. These finished products may be repacked locally and sold in
Botika ng Bayan and Botika ng Barangay outlets.
To make an impact on the market, PITC and DOH must also warrant the steady
supply of its products and exert efforts to make the public aware of the availability of
cheap but good quality drugs through the Botika ng Bayan of PITC and Botika ng
Barangay of DOH.
8 . Consider other measures aimed at lowering the prices of medicines to dissuade
consumers from buying counterfeit drugs, often sold at cheap prices and to abate the
smuggling of drugs from other countries.
Anent to this, Republic Act No. 6675 or the Genetics Act of 1988, should be
strengthened to encourage the establishment of local generic companies. The local
market should be developed to establish an environment where local pharmaceutical
companies can thrive. Currently, the Generics Act requires the DOH to publish annually
the generic names and corresponding brand names of all drugs and medicines
available in the Philippines.lo An amendment of this provision to allow the private sector
to publish price comparison of drugs in accordance with Republic Act No. 7394 or the
Consumer Act of the Philippines, 11 . ’ IS in order.
Io SECTION 5. Posting and Publication - The Department of Health shall publish annually in at least two (2) newspapers of general circulation in the Philippines the generic names, and the corresponding brand names under which they are marketed, of all drugs and medicines available in the Philippines. ” ARTICLE 11 1. Price Comparisons - Comparative price advertising by sellers of consumer products or services shall conform to the following conditions:
19 COMMITTEE REPORT on P.S. Res. Nos. 40 and 122 ~ ~ _ _ _ _
Currently, generic drugs are not being patronized much by Filipinos, Part of the
problem stems from lack of proper information such that the public's perceived notion is
that branded medicines are of higher quality than their generic counterparts. This may
also be due to the fact that multinational pharmaceutical companies have a greater
advantage over local generic manufacturers due to their aggressive marketing
campaigns. Section 11, which requires the conduct of an information/educational
campaign on the use of generic names not only for the public, but more so for the health
professionals, should be fully implemented."
a) Where the comparison relates to a former price of the seller, the item compared shall either have been sold at that price within the ninety (90) days immediately preceding the date of the advertisement, or it shall have been offered for sale at least four (4) weeks during such ninety day period, If the comparison does not relate to an item sold or offered for sale during the ninety-day period, the date, time or seasonal period of such sale or offer shall be disclosed in the advertisement.
b) Where the comparison relates to the seller's future price, the future price shall take effect on the date disclosed in the advertisement or within ninety (90) days after the price comparison is stated in the advertisement. The stated future price shall be maintain ed by the seller for a period of at least four (4) weeks after its effective date: Provided, That compliance thereof may be dispensed with in case of circumstances beyond the seller's control.
c) Where the comparison relates to a competitor's price, the competitor's price shall relate to the consumer products or services advertised or sold in the ninety-day period and shall be representative of the prices similar consumer products or services are sold or advertised in the locality where the price comparison was made.
Section 11. Education Drive - The Department of Health jointly with t he Department of Education, Culture and Sports, Philippine Information Agency and the Department of Local Government shall conduct a continuous information campaign for the public and a continuing education and training for the medical and allied medical professions on drugs with generic names as an alternative of equal efficacy to the more expensive brand name drugs. Such educational campaign shall include information on the illnesses or symptoms which each generically named drug is supposed to cure or alleviate, as well as its contraindications. The Department of Health with the assistance of the Department of Local Government and the Philippine Information Agency shall monitor the progress of the education drive, and shall ubmit regular reports to Congress.
L U COMMITTEE REPORT on P.S. Res. Nos. 40 and 122 ________
Respectfully submitted:
C Chairperson, Commi Chairperson, Committee on Trade
Member, Committees on Health an Member, Committee on Trade and Commerce and Finance
MA R Chairperson, Committee bn Finance
MAF(I.6EL “LITO” M. LAPlD Committees on Health and Demography; and
Finance
Comi tt& on Health and Demography; Trade ? and Commerce; and Finance
LUISA iiLoi” P. ~JERCITO ESTRADA Committees on Health and Demography; and
Finance
Committees on Health and Demography; and Finance
Commitfees on Health and Demography; and Finance
EDGARDO 3. ANGARA Committees on Health and Demography; Trade
and Commerce; and Finance
Commitfees on Health and Demography; Trade and Commerce; and Finance
G REVlLLA JR. and Commerce; and Finance
21 COMMITTEE REPORT on P.S. Res Nos. 40 and 122
Finance Committees Commerce; and Finance
+d&$%RROVO Committee on Finance U Co&ittee on Finance
EX-OFFICIO MEMBERS:
r
Minority Leader
The Honorable FRANKLIN M. DRILON Senate President
THIRTEENTH CONGRESS OF TI% IlEPUBLIC ) OF THE PHILPPINES 1 ’OW iiijf7 ‘i 1 ;,, ;i &:
First Regular Session 1
P.S. Resolution No. -
Introduced by Senator LUISA “LOI” P. EJERCITO ESTRADA
RESOLUTION DIRECTING THE SENATE COMMITTEE ON HEALTI3 AND DEMOGRAPHY TO INVESTIGATE, IN AID OF LEGISLATION, THE ALLEGED PROLIFERATION OF
COUNTERFEIT MEDICINE IN THE MARKET
WHEREAS, the Constitution, Article 2, Section 15 expressly mandates the State to
“protect and promote the right to health of the people and instill health consciousness among
them.”
WHEREAS, various newspapers recently reported the alarming proliferation of
counterfeit medicine in the market, as part of an illegal trade which allegedly generates an
average profit of P7.2 billion a year;
W E R E A S , the Bureau of Food and Drugs (BFAD) has a very limited power and even
resources to go after those responsible for said illegal acts because of the inadequacy of
appi-opriate laws;
WHEREAS, the proliferation of fake drugs will remain unabated, unless stricter
measures are imposed and the government takes necessary actions, since not a single supplier or
manufacturer of fake medicines has ever been apprehended, let alone imprisoned, while most
cases involving these fake products have more often than not been dismissed for lack of
evidence;
WHEREAS, there is a need to criticcally address this problem since the poor are the ones
most vulnerable to offer of fake drugs at a. lower price; heme, prejudicing their health and safety;
WHEREFORE, BE IT RESOL'VED AS IT IS HEREBY RESOLED, by the Senate to
direct the Senate Committee oil Health and Demography to investigate, in aid of legislation, the
alleged proliferation of counterfeit medicines in the market.
Adopted
ESTFUDA Senator
THIRTEENTH CONGRESS OF THE WKJBLIC ) OF THE PHILPPINES )
First Regular Session 1
S E N A T E
Resolution No ___ * q I"& 6
Introduced by Senator Ramon Bong Revilla, Jr
RESOLUTION URGING THE APPROPRIATE SENATE COMMITTEE TO CONDUCT AN INVESTIGATION, IN AID OF LEGISLATION, INTO THE PROLEERATION OF FAKE DRUGS IN THE COUNTRY W ORDER TO COME UP WITH CORRECTIVE: LEGISLATION IN RESPONSE TO THE S A D PROBLEM
WHEREAS, the proliferation of counterfeit and fake drugs is becoming a huge threat to the drug manufacturing industry in the country and pose unexplainable dangers to the health of all Filipinos;
, .
WHEREAS, the government considers the proliferation of fake and counterfeit drugs a major concern and must be urgently addressed, as reports revealed that at least P7 billion is lost from the government coffers every year due to smuggling and unabated selling by unscrupulous traders and distributors;
WHEREAS, poor Filipinos are most likely to purchase fake medicines considering their cheap prices without being mindful that fake drugs can cause their untimely death, which places these consumers in harms way because one cannot easily distinguish real medicines from the counterfeits;
WHEREAS, existing laws must be strongly implemented to protect the health of the public and the local pharmaceutical industry as well, while several government agencies particularly the Bureau of Customs (BOC) and the Bureau of Food and Drugs @FAD) have failed to adopt strong counter-measures to contain, counteract and eventually stop the propagation of fake medicines in the country;
WHEREAS, there is a need to strengthen the powers and functions of the BFAD and increase the penalties against individuals, groups, drug establishments and manufacturers engaged in the production, sale and distribution of fake drugs in the country. Now, therefore he it
Resolved by the Senate of the Philippines, To Urge The Appropriate Senate Conmiittee
To Conduct An Investigation, In Aid of Legislation, Into The Proliferation of Fake Drugs In The
Country In Order To Come Up With Corrective Legislation In Response To The Said Problem.
Adopted,
, JR.
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