Price regulation: Success story of the Duterte administration

Credit should be given to the Duterte administration which pushed to reality the imposition of maximum drug prices for medicines. The policy benefits all consumers and sectors whether poor and rich. In legal parlance, the price regulation is a valid exercise of the State’s police power, parens patriae and the public trust doctrine.

The process and consultation took almost three to four years and it was by no means easy and smooth. The economic power and threat of the pharmaceutical industry was felt across all sectors and some what aided by some agencies of the State.

Our consumer group was one of those who vehemently debated and argued with the stakeholders. I was not awed by the industry threat that price regulation is anti innovation to research and development for new drugs, including an amateurish threat that medicines will disappear in the market. How can that happen with a solid 110 million Filipinos as the market base of the medicine industry. The price regulation was implemented in two tranches thru Executive Orders 104 and 155 which were both signed by President Duterte.

Later, Congress passed the CREATE law and removed the Value Added Tax on medicines like hypertension, diabetes, hyperlipidemia, TB, HIV and COVID 19. The removal of the VAT had no added inputs from the pharmaceutical industry unlike the Maximum Drug Retail Price (MDRP) in lowering retail prices of medicines. The CREATE is wholly a State action.

For the 19th Congress, we strongly propose the repeal of the Oil Deregulation Law.

The economic power of the oil industry is as much powerful as that of the pharmaceutical industry. We had a regime of oil regulation in the past that Congress can revisit. It is utterly anomalous that the State tolerates price adjustments via a pricing formula that is entirely implemented at the hands of the oil industry and with no scintilla of State prior audit.

Our group submitted the same proposal of oil regulation in the recently concluded Energy Plan. The bill on oil regulation should be certified as urgent by the next President. Other issues such as an oil reserve, return of the oil company Petron to the State, the state of the oil refineries in the country, the removal of VAT and excise taxes on fuel products and others are subsidiary issues that can cause distraction to the main agenda of oil regulation. Let this be the legacy of the next President.

Third, strengthen the regime of Suggested Retail Prices (SRP) in the retail market that shall allow competition for access to supply, choices and prices for any and all basic necessities and prime commodities. The State shall solely and exclusively act and perform the mandate of enforcer against cartel, profiteering and hoarding at all times and situations. Consistent with the ASEAN agenda, the State should allow consumer associations to work in synergy with the State.

The State should expand the items under basic necessities and prime commodities as are necessary. The State shall develop the criteria and standards in the exercise its police power against cartel, profiteering and hoarding with the basic tenets of due process. The proposed paradigm shift in the SRP should not be abused by the industry as the strong arm of the law as well as consumer associations will perform their role as watchdogs.

It is about time that the next Congress enacts the Spouses Recto bill that will allow representation of Consumer associations in public utilities as well as in the boards and commissions of State regulators. This development augurs well for the Philippines as an ASEAN member pursuing the ASEAN vision of consumer welfare and protection for the 600 million ASEAN consumers enhancing the increasing role of consumer associations in synergy with the State regulator.

Atty. Vic Dimagiba, AB, LLB, LLM

President ,Laban KonsyumerInc.

Email at [email protected]