Philippines pharmaceutical market update, 2013


Ames Gross
Pacific Bridge Medical

In our market access themed month Ames Gross of Pacific Bridge Medical discusses the pharmaceutical environment in the Philippines.

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 billion by 2014. This would put the country on par with Taiwan and Indonesia, in terms of size.

Much of the growth has been driven by rising wealth among Filipinos. In 2012, the economy expanded by 6.6 percent, faster than any country in Asia except China. Household consumption increased by 6.1 percent during the same year. As Filipinos get richer, they are spending more and more of their wealth on healthcare. In 2001, the average Filipino spent just $29 per year on healthcare. By 2011, that number had increased to $97.

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.


“…recent laws mandating the use of generics in public settings have led to a gradual acceptance among Filipinos.”


Domestic drug companies are making their greatest gains in generics. Traditionally, even poor Filipinos looked down on generic drugs. Doctors – enticed by incentives from pharmaceutical companies – rarely prescribe generics, and patients oftentimes do not trust non-branded drugs. However, recent laws mandating the use of generics in public settings have led to a gradual acceptance among Filipinos.

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.

National pricing policy

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.


“This affected drugs including Pfizer’s hypertension drug Norvasc and GlaxoSmithKline’s antibiotic, Augmentin.”


National health insurance

To further increase healthcare access, the Philippines Department of Health (DOH) has set a goal of providing healthcare coverage to all citizens by 2016.

Currently, 78 million Filipinos are enrolled in the national health insurance program, PhilHealth. This is an increase of more than 100 percent since 2008.

However, PhilHealth is not comprehensive in its coverage. Only about one third of healthcare expenses are covered under the plan, and virtually no outpatient medications are covered. But with the doubling of its 2013 budget, the DOH plans to increase coverage of medical products and procedures. It has not yet announced a detailed plan to do so.

The expansion of national coverage presents mixed opportunities for foreign pharmaceutical companies. On the one hand, it should increase the number of Filipinos eligible for drug reimbursement. On the other hand, it may lead the government to further reducing some drug prices.

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)


“The expansion of national coverage presents mixed opportunities for foreign pharmaceutical companies.”


Fees for pharmaceutical products with new chemical entities are $464 each, and registration is good for three years. Fees for generic pharmaceutical products are $175 each, and registration is good for five years. Renewal licenses are good for two or five years. It typically takes 180 days for the FDA to review and issue a pharmaceutical product approval.
Starting July 1, 2013, the Philippine FDA will adopt the ASEAN Common Technical Dossier (CTD) and the Common Technical Requirements (CTR) for the registration of pharmaceutical products.


In the Philippines, direct-to-consumer ads for prescription drugs are banned, but they are permitted for OTC drugs. Advertisements including promotional brochures do not need prior approval from the FDA. Nevertheless, samples of promotional materials must be submitted to the FDA for reference. Such materials include:

• The product brand name and generic name
• A product description
• Dosage quantities and forms
• Clinical information, including warnings and precautions
• The name and address of the manufacturer
• The conditions for storage

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.

“Very few foreign pharmaceutical companies do their own manufacturing in the Philippines.”


Most distribution takes place through two major local companies – Zuellig Pharma and Metro Drug. Together, these two companies control 85 percent of distribution channels in the Philippines. Unlike manufacturers, wholesalers and distributors do not have to comply with Good Distributing Practice (GDP) 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.


About the author:

Ames Gross is president and founder of Pacific Bridge Medical, a Bethesda, Md.-based consulting firm that helps medical companies doing business in the Asian market ( A recognized national and international leader in the Asian medical markets, he founded Pacific Bridge Medical in 1988, which has helped hundreds of medical companies with business development and regulatory issues in Asia.

How do you see the Filipino pharmaceutical market developing?