The unappreciated pharmaceutical business

Published February 25, 2020, 12:00 AM

by manilabulletin_admin

Dr. Beaver R. Tamesis President Pharmaceutical and Healthcare Association of the Philippines President and Managing Director MSD Philippines
Dr. Beaver R. Tamesis
President
Pharmaceutical and Healthcare Association of the Philippines
President and Managing Director
MSD Philippines

 

 

By BERNIE CAHILES-MAGKILAT

The country’s healthcare system is so convoluted an environment that this very basic need has become more of a battle between opposing heads – the government and the pharmaceutical industry – with the patients at the end of the line.

Dr. BEAVER R. TAMESIS is on his fifth year as head of the Pharmaceutical and Healthcare Association of the Philippines (PHAP), a group of innovators and research-based MNC drug companies in the country. The industry is at the crossroads as the government implements the second phase of the maximum retail price (MRP) program or price control on essential medicines.

MRP

President Rodrigo Duterte, known for being a populist leader, really took time to weigh the pros and cons of the MRP.

Tamesis cautioned the government that such price control mechanism is a bad idea that would only make pharma companies deprioritize the Philippines and end up depriving Filipinos of access to innovator drugs for critical illnesses at affordable prices while scaring investors away. Tamesis even stressed that with an approval rating of more than 80 percent, the President does not need another populist measure.

The Department of Health though claimed that some branded innovator medicines are 22 times more expensive than in other countries while the generic drugs are still four times higher than international reference prices.

“I can swear on a stack of Bibles that our prices are very comparable with the rest of Asia and even with the developing world, we have studies to prove that. I don’t know what are they exactly comparing. I don’t know where in the world they got those numbers,” rebuts Tamesis.

To their dismay, Duterte approved the expanded MRP under EO 104. It covers prescription drugs for critical illnesses such as hypertension, diabetes, cardiovascular diseases, chronic lung diseases, neonatal diseases, and major cancers. It also includes high-cost treatments for chronic renal disease, psoriasis, and rheumatoid arthritis.

“We will follow the law, we will comply whatever the conditions are,” says Tamesis, who also heads the world’s the Philippine operation of MSD, the world’s leading innovator drug company.

“We will adapt, that is how businesses respond if rules change in the middle of the game,” says Tamesis.

PHARMA IS A BUSINESS

While PHAP vowed their full compliance, Tamesis also stressed that pharma is a business. The MRP will cut prices of the listed medicines anywhere from 80 to 97 percent.

“Will I sell at a loss? Why I am still here, will I have to let people go? This makes us question what kind of investments we’re doing,” says Tamesis. “Price control is a bad idea, it removes business predictability. Why destroy the business?”

According to Tamesis, other countries like China and India have stepped back from price controls. There are 166 molecules registered in the EU and US in the past five years that potentially affect Filipinos but only 5 have been launched here.

When the first MRP was imposed in 2009-2010, the industry suffered a drastic 5-10 percent decline. It took 10 years later for the industry to get back on its feet again.

At that time, his company MSD dropped one particular drug by half but its generic competitor was selling at ₱1 higher than its innovator drug.

Instead of price control, PHAP would have loved the government the DOH to expand its proven medical access program through negotiated price procurement, tender or bulk buying to be able to bring down prices of medicines and ensure predictability of business. Under these schemes, medicines can go as low as 75 percent from the actual price list of pharma companies.

The DOH will buy in bulk where pharmaceutical firms can bid or enter into negotiation. With that huge discounts, he said, government can pass on the medicines to patients at lower prices, if not for free.

DOH program has been successful and can readily be replicated into other diseases.

With its huge budget, the DOH is the biggest single buyer of medicines accounting for 30 to 40 percent of the estimated ₱212-billion annual industry sales.

INVESTMENT

Tamesis explained that developing a drug is costly but that is poorly understood by most. Many people think pharma companies are a bunch of wealthy conglomerates which strangle patients with high priced medicines.

According to Tamesis, a pharma company spends $2.6 billion to discover one molecule out of so many over a long period of time. Because of the huge cost, pharma companies invest in locations that have good demand to compensate for the huge investment and deprioritize countries with less favorable market condition.

Today, PHAP member companies are focusing on Alzheimer’s and other more difficult conditions that affect human life, including the threat of COVID-19 global epidemic.

Among countries in the region, Tamesis said, Singapore has the most pharma manufacturing operations because they have the Singapore Development Board that think 50 years beyond. This has encouraged MNCs to locate there because that is the kind of horizon companies look for: Stability and predictability.
In contrast, the instability of the industry in the Philippines has forced pharma companies to leave the country.

“Price control destroys the landscape as predictability of business condition becomes very unstable. It makes predictability very hard, business conditions unstable and makes us think what kind of investments we’re doing. Pharma business has different dynamics, it is not just mixing things in the laboratory. Unlike a supermarket where prices of products are low because it does not take a long time and so much investments to produce these products.
That is why no generic drug companies are investing in innovator drugs. Generic drugs or the small players thrive in making copies of medicines that are already off patent,” says Tamesis.

With the MRP, Tamesis said certain pharma companies will think twice about the Philippine condition. “Maybe some will choose to stay or dramatically reduce size of companies by letting go of employees,” says Tamesis, who cited Illy Lilly, which sells insulin and cancer products, but already left the country last year. “Perhaps, they make more money in other countries that they did not even bother to defend their patents as they sell to local distributor now, it’s a dramatic reduction,” he says.

COLLABORATION

Tamesis looks forward to government and the private sector start working on a roadmap for the manufacturing of bio pharma like insulins. Given the right environment and talents, who have been pirated by Singapore right after graduation with high-paying jobs, MNCs will come in.

“At the end of the day, we are a business we do need to make money,” add Tamesis, who described its relationship with the government as “very vigorous and lively because at the end of the day we have the same goal: to uplift the lives of Filipinos.”

There are many approaches to attack this goal, but Tamesis said PHAP is espousing more sustainable way of doing things.

Tamesis explained that pharma is a business while do a great service to humanity but if there is the inability to generate cash to fund research nothing will be happening in the future.

“So, we need constant collaboration to be able to develop sustainable solution,” says Tamesis as he emphasized that government must acknowledge that pharma companies should be able to work in an environment where they can thrive because if they cannot make any business, they cannot also meet the objectives of the government to bring access to medicines to as many people as possible.

Prices of medicines in the country have already gone down considerably with the implementation of the Generic Drugs Law and the Cheaper Medicines Act. Now, generic drugs already account for the bulk of 76 percent of total industry from 80-90 percent original branded innovator drugs.

“There is no failure in the market where generic drugs come in with a big big bang as they now account for three-fourths of the market and only one-fourth is left to innovator drugs,” he adds.

HEALTHCARE

Healthcare must be focused on how to make actual care accessible and affordable. “Even if prices are reduced 80 percent do you think this is the answer to poor patients. No amount of price cuts will solve that issue of high cost of healthcare in the country,” he adds.

“It is not price control, it is systems that ensure patients are cared for, access to care and best available molecules when they need it,” he says.
Tamesis suggested for the government to widen the data base stressing the MDRP only benefits the A and B of the pyramid.

“There should be more programs for primary care, reproductive, disease prevention. We need a program that cater to targeted diseases. This way, more people will be included in the system,” he adds.

FAMILY OF DOCTORS

Aside from running PHAP, Tamesis also spearheads MSD Philippines, the local subsidiary of the global pharma giant.

“We are doing okay, were growing healthily, we have vaccines and reproductive health commodities,” says Tamesis. The challenge is how to make its products relevant to the Philippine environment especially on the most social issue on how to encourage family planning.

Tamesis, a cardiologist, comes from a family of doctors. His father the late Jesus V. Tamesis MD was the country’s premier ophthalmologist. All of the 8 siblings are into the medical field with six physicians, an optometrist and a nurse.

“Strange” is the term used by Tamesis when asked to describe his family. “Conversations at dinner table revolve around all the medical stuff.” Her mother Gloria Reyes, an anesthesiologist, thought he would make a good lawyer because he excelled in debating, but he followed his parents’ footsteps.

Tamesis looks up to his parents. His father passed away at the age of 95. He also loves reading about John F. Kennedy, who inspired him so much with his “I have a dream” speech that he read in high school. “If you have a dream go for it,” adds Tamesis, who earned his degree from the University of the Philippines, completing his cardiology and internal medicine residency at the Philippine General Hospital and a fellow at the St. Louis University in Missouri, US. He is widely published in the areas of stress testing, nuclear imaging and structured treatment approaches for diabetes mellitus.

He eventually went into the commercial side of the pharmaceutical industry when he joined MSD in 1995 as medical director and became MSD Managing Head for the Philippines in 2013. He is still a practicing physician, dividing his time between patients and as MSD head.

His love for the medical profession stemmed from the fact that it is a big fulfillment to see a patient getting better, but Tamesis has realized he could do more impact at MSD.

As a doctor, every encounter is one to one so how to make a wider and broader impact is through his MSD job where medical information is up to speed that can help a doctor’s practice. Such role in MSD has enabled him to magnify the effect to a larger community.

“I feel that MSD has a multiplier effect because it can help reshape the industry,” he adds.

CHEERLEADER

“I like being a cheerleader,” he adds. At MSD, he manages a very competent team and well experienced, equipped with the core principles and values to ensure they are doing the right thing for patients and business. There are 200 people at the MSD office and 150 medical representatives on the ground.
At MSD, Tamesis emphasizes ethics with the welfare of patients being the top of mind.

“It is not enough for me to win a government tender that after delivering the vaccines I am done and I collect my check. I want my team to deliver and ensure that the medicines reach the Lolos and Lolas and the schoolgirls,” he adds noting they partner with the local government units by events organizing event for people to come for mass vaccinations.

“This is the kind of work we are doing not just selling and after pulling out from the warehouse, we work with the DOH to ensure they recognize how much they actually need, that is where the rubber hits the road,” he adds.

Tamesis has learned that his job is all about making sure that people benefit from their product and making them appreciate that it is more complicated than mere selling a detergent brand. They have to uplift the communication that they are giving to doctors so people appreciate how science help with the best of research and bring it to the end consumer and for business to bloom.

“It is not the special trade deals or smooching with procurement officer but ensuring demand is there. It is always about how patients benefit from this fantastic product and help change their outlook in life. It is heartwarming,” he adds.

Thus, it is in their interest to have a healthy nation because that translates to healthy business. It is a win for government, patient, nation and business.

 
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