CHAPTER 3
DRUGS AND MEDICINES PRICE REGULATION
SEC. 17. Drugs and Medicines Price Regulation Authority of the President of the Philippines. – The President of the Philippines, upon recommendation of the Secretary of the Department of Health, shall have the power to impose maximum retail prices over any or all drugs and medicines as enumerated in Section 23.
The power to impose maximum retail prices over drugs and medicines shall be exercised within such period of time as the situation may warrant as determined by the President of the Philippines. No court, except the Supreme Court of the Philippines, shall issue any temporary restraining order or preliminary injunction or preliminary mandatory injunction that will prevent the immediate execution of the exercise of this power of the President of the Philippines.
SEC. 18. Drugs and Medicines Price Monitoring and Regulation Authority of the Secretary of the Department of Health. – To implement the policies of this Act under this Chapter, the Secretary of the Department of Health is hereby authorized to establish and initiate a price monitoring and regulation system for drugs and medicines within one hundred twenty (120) days after the enactment of this Act. The Secretary of the Department of Health may also create such bodies, consultative councils, from which advice may be sought in the implementation of a drug or medicine price monitoring and regulation policy. Such bodies or consultative councils created by the Secretary of the Department of Health shall coordinate its efforts together with other government agencies.
SEC. 19. Functions and Responsibilities of the Secretary of the Department of Health. – Pursuant to Section 18 of this Act, the Secretary of the Department of Health shall have the following powers:
(A) Power to Recommend the Maximum Retail Price of Drugs and Medicines Subject to Price Regulation –
(1) Upon application or motu proprio when the public interest so requires, the Secretary of the Department of Health shall have the power to determine the maximum retail prices of drugs and medicines which shall be recommended to the President of the Philippines for approval. In order that affordable prices of drugs and medicines from the different manufacturers, importers, traders, distributors, wholesalers, or retailers shall be made available to the public, the Secretary of the Department of Health, as he/she may deem fit and after a proper determination, shall have such approved maximum retail prices of drugs and medicines published;
(2) In recommending the maximum retail price, the Secretary of the Department of Health shall consider the following factors:
(a) Retail prices of drugs and medicines that are subject to regulation in the Philippines and in other countries;
(b) The supply available in the market;
(c) The cost to the manufacturer, importer, trader, distributor, wholesaler or retailer of the following, but not limited to:
(i) The exchange rate of the peso to the foreign currency with which the drug or any of its component, ingredient or raw material was paid for;
(ii) Any change in the amortization cost of machinery brought about by any change in the exchange rate of the peso to the foreign currency with which the machinery was bought through credit facilities;
(iii) Any change in the cost of labor brought about by a change in minimum wage; or
(iv) Any change in the cost of transporting or distributing the medicines to the area of destination;
(d) Such other factors or conditions which will aid in arriving at a just and reasonable maximum price; and
(3) No retailer shall sell drugs and medicines at a retail price exceeding the maximum retail price approved by the President of the Philippines as provided in Section 17 of this Act: Provided, That, the Secretary of the Department of Health shall immediately undertake a study on the prevailing prices of drugs and medicines subject to price regulation and provide an initial list of drugs and medicines, which maximum retail prices he/she shall recommend to the President of the Philippines.
(B) Power to Include Other Drugs and Medicines in the List Subject to Price Regulation – Upon application or motu proprio when the public interest so requires and after proper determination, the Secretary of the Department of Health may order the inclusion of drugs and medicines to the list subject of price regulation under Section 23 hereof.
(C) Power to Implement Cost-Containment and Other Measures –
(1) The Secretary of the Department of Health shall have the power to implement the fair price of drugs and medicines for purposes of public health insurance and government procurement based on the order of the President of the Philippines imposing maximum retail prices; and
(2) The Secretary of the Department of Health shall have the power to implement any other measures that the government may avail of to effectively reduce the cost of drugs and medicines that shall include, but not limited to, competitive bidding, price volume negotiations, and other appropriate mechanisms that influence supply, demand and expenditures on drugs and medicines.
(D) Power to Impose Administrative Fines and Penalties – After due notice and hearing, the Secretary of the Department of Health shall have the power to impose administrative fines against any person, manufacturer, importer, trader, distributor, wholesaler, retailer, or any other entity, in such amount as it may deem reasonable, which in no case shall be less than Fifty thousand pesos (Php50,000.00) nor more than Five million pesos (Php5,000,000.00) for violations of the maximum retail price approved by the President of the Philippines pursuant to the provisions of this Chapter.
(E) Power to Deputize Government Entities – The Secretary of the Department of Health shall have the power to call upon and deputize any official, agent, employee, agency, or instrumentality of the national and local government for any assistance that it may deem necessary to carry out the purposes of this Chapter.
(F) Other Powers Necessary to Implement Provisions of this Chapter – The Secretary of the Department of Health shall exercise such powers and functions as may be necessary to implement and enforce the provisions of this Chapter of this Act, including the power to require the production and submission of records, documents, books of account, bills of lading, input documents, records of purchase and sale, financial statements, and such other documents, information and papers as may be necessary to enable the Secretary of the Department of Health to carry out its functions, duties, and responsibilities. Accordingly, within thirty (30) days from the effectivity of this Act and every December 31st of every year thereafter, every manufacturer, importer, trader, distributor, wholesaler, and retailer of a drug and medicine whether included in or excluded from the list of drugs and medicines that are subject to price regulation shall furnish the Secretary of the Department of Health a list, containing on the minimum the corresponding prices and inventory, of all drugs and medicines it manufactures, imports, trades, distributes, wholesales, or retails, data pertaining to the factors enumerated under Section 19(A)(2), and any and all necessary information that the Secretary of the Department of Health may require.
SEC. 20. Procedures for Inquiries, Studies, Hearings, Investigations, and Proceedings. – All inquiries, studies, hearings, investigations and proceedings conducted by the Secretary of the Department of Health shall be governed by the rules adopted by him/her, and in the conduct thereof shall not be bound by the technical rules of evidence.
SEC. 21. Effectivity of the Decisions or Orders of the Secretary of the Department of Health. – All decisions or orders of the Secretary of the Department of Health pursuant to Section 19 Paragraphs (A) Power to Recommend the Maximum Retail Price of Drugs and Medicines Subject to Price Regulation, (B) Power to Include Other Drugs and Medicines in the List Subject to Price Regulation, (C) Power to Implement Cost-Containment and Other Measures, (D) Power to Impose Administrative Fines and Penalties, (E) Power to Deputize Government Entities, or (F) Other Powers Necessary to Implement Provisions of this Chapter, shall be immediately operative.
SEC. 22. Review of the Decisions or Orders of the Secretary of the Department of Health. – A party adversely affected by a decision, order or ruling of the Secretary of the Department of Health may, within thirty (30) days from notice of such decision, order or ruling, or in case of a denial of a motion for reconsideration thereof, within fifteen (15) days after notice of such denial, file an appeal with the Court of Appeals, which shall have jurisdiction to review such decision, order or ruling.
The filing of a petition for a writ of certiorari or other special remedies in the Supreme Court shall in no case supersede or stay any decision, order or ruling of the Secretary of the Department of Health, unless the Supreme Court shall so direct, and the petitioner may be required by the Supreme Court to give bond in such form and of such amount as may be deemed proper.
SEC. 23. List of Drugs and Medicines that are Subject to Price Regulation. – The list of drugs and medicines that are subject to price regulation shall include, inter alia:
(a) All drugs and medicines indicated for treatment of chronic illnesses and life threatening conditions, such as, but not limited to, endocrine disorders, e.g., diabetes mellitus; gastrointestinal disorders, e.g., peptic ulcer; urologic disorders, e.g., benign prostatic hyperplasia (BPH); cardiovascular diseases, e.g., hypertension; pulmonary diseases, e.g., pulmonary tuberculosis (PTB), asthma; auto-immune diseases, e.g., systemic lupus erythematosus (SLE); skin diseases, e.g., psoriasis; neuro-psychiatric disorders; other infectious diseases, e.g., human immunodeficiency virus-acquired immune deficiency syndrome (HIV-AIDS); and other conditions such as organ transplants and neoplasm;
(b) Drugs and medicines indicated for prevention of diseases, e.g., vaccines, immunoglobulin, anti-sera;
(c) Drugs and medicines indicated for prevention of pregnancy, e.g., oral contraceptives;
(d) Anesthetic agents;
(e) Intravenous fluids;
(f) Drugs and medicines that are included in the Philippine National Drug Formulary (PNDF) Essential Drug List; and
(g) All other drugs and medicines which, from time to time, the Secretary of the Department of Health determines to be in need of price regulation.
SEC. 24. Illegal Acts of Price Manipulation. – Without prejudice to the provisions of existing laws on goods not covered by this Act, it shall be unlawful for any manufacturer, importer, trader, distributor, wholesaler, retailer, or any person engaged in any method of disposition of drugs and medicines to engage in acts of price manipulation such as hoarding, profiteering, or illegal combination or forming cartel, as defined under Section 5 of Republic Act No. 7581, otherwise known as the Price Act, and all other acts committed in restraint of trade.
SEC. 25. Penalty for Illegal Acts of Price Manipulation. – Any person or entity who commits any act of illegal price manipulation of any drug and medicine subject to price regulation shall suffer the penalty of imprisonment for a period of not less than five (5) years nor more than fifteen (15) years or shall be imposed a fine of not less than One hundred thousand pesos (Php100,000.00) nor more than Ten million pesos (Php10,000,000.00), at the discretion of the court. The court may also order the suspension or revocation of its license to operate (LTO), professional or business license.
Whenever any act of illegal price manipulation of any drug and medicine subject to price regulation is committed by a juridical person, its officials or employees, or in case of a foreign corporation or association, its agent or representative in the Philippines who are responsible for the violation, shall be held liable therefor.
SEC. 26. Display of Maximum Retail Price Fixed and Approved by Order of the President of the Philippines for Drugs and Medicines Subject to Price Regulation. –
(a) Within a reasonable period as may be determined by the Secretary of the Department of Health, and: Provided, That it conforms to existing drug product labeling requirements, every manufacturer, importer, distributor, wholesaler, trader, or retailer of a drug and medicine intended for sale shall display the retail price which shall not exceed the maximum retail price approved by order of the President of the Philippines. The maximum retail price shall be printed on the label of the immediate container of the drug and medicine and the minimum pack thereof offered for retail sale with the words “RETAIL PRICE NOT TO EXCEED” preceding it, and “UNDER DRUG PRICE REGULATION” on a red strip.
(b) Within a period as may be determined by the Secretary of the Department of Health from time to time, every manufacturer, importer, or trader shall issue a price list to wholesalers, distributors, retailers and to the Secretary of the Department of Health, indicating the retail price, the maximum retail price, and such other information as may be required by the Secretary of the Department of Health.
SEC. 27. Reports from Local Government Units (LGUs) and the Department of Trade and Industry (DTI). – All local government units and the Department of Trade and Industry shall help ensure the implementation of pricing policies provided under this Chapter by submitting quarterly price monitoring reports to the Secretary of the Department of Health of drugs and medicines identified by the latter, and any and all necessary information that the Secretary of the Department of Health may require.
SEC. 28. Role of the Department of Health (DOH) and the Department of Trade and Industry (DTI). – The Department of Health and the Department of Trade and Industry shall conduct independent periodic surveys and studies of the selling prices of all drugs and medicines referred to in Section 23 of this Act all over the country as well as their share or effect on the family income of the different economic groups in the country for purposes of serving as data base for government efforts to promote access to more affordable medicines, as well as evaluating the effectivity of the measures undertaken to promote access to more affordable medicines. The DTI shall always officially provide the Secretary of the Department of Health copies of these independent reports.
SEC. 30. Reportorial and Public Notice Requirements. –
(a) The Secretary of the Department of Health shall submit a bi-annual Monitoring Report of its performance on the implementation of this Act to the Office of the President. This report submitted to the Office of the President shall be published in a newspaper of general circulation within thirty (30) days upon submission.
(b) It shall also submit annually a report of its performance on the implementation of this Act to both Houses of Congress, within fifteen (15) days from the opening of the regular session. It shall also regularly report and comply immediately to any order of the Congressional Oversight Committee.
(c) The order of the President of the Philippines imposing maximum retail prices on drugs and medicines, including the conditions implementing it, shall be published within fifteen (15) days from issuance in at least two (2) newspapers of general circulation. All wholesalers, manufacturers, distributors, importers, or traders shall have a copy of the order of the President of the Philippines and provide the same to their clients and customers for every transaction.
(d) All drug outlets are required to post in a conspicuous area within its premises a clear copy of the order of the President of the Philippines which shall be easily accessible to the consuming public and updated regularly as the situation may warrant.
