Singapore, Dec 30 (ANI): A new study recently published by GlobalData suggests that the Philippines's newly enacted Universal Health Care (UHC) Act presents exciting opportunities for the Indian pharmaceutical industry.
In its research, the London-headquartered multi-industry intelligence firm estimates that with the implementation of the UHC Act, the Philippine pharmaceutical market will grow to reach USD 4.76 billion (PHP 214.9 billion) by the year 2025. The Philippines drug market is estimated to be worth between USD 3.7 billion to USD 4 billion at the moment.
The Philippines UHC Act which was signed into law by President Duterte in February this year was the culmination of health reform efforts spanning over 50 years under different names and administrations, years of slow tedious progress and the past two years of concerted political and technical work to finally realise. The passage of the Act was hailed as a ground-breaking achievement that will set the direction of the health care sector in the Philippines for years to come.
The UHC Act promises all Philippine citizens access to the full spectrum of health services while ensuring there is a means to pay for it. Every Filipino is automatically enrolled in the newly created National Health Insurance Program (NHIP).
Universal health care, however, will cost the government some USD 5 billion in the first year alone. The full impact of its implementation will be gradually felt over a few years as it transitions to the new system, but Filipinos can already expect to benefit from some of the law's provisions almost immediately.
More From This Section
Sasmitha Sahu, a pharma analyst at GlobalData, commented in the report that the introduction of the UHC Act has increased the outlook on healthcare spending. She added that "while the innovator pharmaceutical space in the country is dominated by the subsidiaries of key US and EU companies, India can look to maintain its dominance in the generic pharmaceuticals space against this backdrop."
The Philippines with a population of close to 110 million people is the 13th most populous nation in the world.
Based on the IMF data, the Philippines is the fifth-largest economy in ASEAN in nominal terms, behind Indonesia, Thailand, Malaysia and Singapore in that order. However, among the large economies in ASEAN, its 6.2 per cent projected 2019 GDP growth rate (based on Asian Development Bank outlook published in August 2019) is significantly higher than that of Indonesia at 5.2 per cent, Thailand at 3.5 per cent, Malaysia 4.5 per cent and Singapore 2.4 per cent.
According to an article published by Pacific Bridge Medical, the Philippines is the third-largest pharmaceutical market in ASEAN and was worth USD 3.6 billion in 2016. The Filipino pharmaceutical market is predicted to exceed USD 4 billion by 2020, expanding at a compound annual growth rate of over 3.5 percent.
India was found by the data analytics company to be the top import partner of the Philippines in 2018, contributing 12.6 percent of the total pharmaceutical imports into the country. In 2018, generics accounted for 76 percent by volume of the total pharmaceutical market in the country mostly sold through government-owned pharmaceutical outlets which are increasing in number. The Philippine pharmaceutical market is dominated by US and European companies which control over 70 percent of the market by value, mostly selling branded drugs. It is estimated that there are over 4,800 drug distributors and 650 drug importers in the country.
According to the Embassy of India in Manila, India's pharmaceutical exports to the Philippines increased from USD 197.32 million in the Fiscal Year 2017-18 to USD 220.98 million in FY 2018-19. They account for some 12 percent of total Philippine imports from India and about 90 percent is purchased by the government.
Just in October this year, during Philippine-India trade consultations between the Federation of Indian Chamber of Commerce Philippines Inc. and Federation of Indian Chambers of Commerce and Industry, Philippine Trade Secretary Ramon Lopez invited Indian drug manufacturers to set-up manufacturing plants in the Philippines to produce generic medicines. He said that medicines manufactured in the country could be sold at lower prices since they are not subject to tariffs and other trade costs. He sees demand for specialised medicines currently considered expensive which can be made and sold at a lower cost in the country.
With the passage of the UHC Act, the government would be a major buyer of services, drugs and supplies.
He also added that the Department of Trade and Industry (DTI) has committed to help fast-track the registration of medicines in the country in response to concerns raised by Indian pharmaceutical companies that it takes Philippine regulators a long time to release permits.
GlobalData's Sahu concludes: "Apparently this is a mutualistic scenario. Indian generic companies can leverage the current favourable investment and economic conditions to gain greater market share by setting up local units. At the same time, the Philippines can provide a uniform standard of healthcare services to the entire population at an affordable cost.