Press Release
February 22, 2007

Transcript of interview with Sen. Pia S. Cayetano
"OUR COUNTRY NEEDS SBN 2263"

Chairperson , Senate Committee on Health and Demography
Co-Author , with Sen. Mar Roxas III, of Senate Bill No. 2263
("An Act to make the laws on patents, tradenames and trademarks more responsive to the Filipino people by clarifying non-patentable inventions, allowing the importation and early development of patented medicines, and modifying government use for provisions drugs and medicines, to lower prices and increase access to and supply of quality drugs or medicines, allowing for this purpose certain provisions of RA 8293, otherwise known as the Intellectual Property Code of the Philippines.")

Interview by Ms. Twink Macaraig on "Take One"
ABS-CBN News Channel, 21 February 2007

Question: The bill basically says that there are three reasons why Filipinos don't have access to cheap medicines, right?

SPSC: Basically, the bill includes four new provisions which will effectively lower the prices of drugs. One is what we call the "parallel importation" provision which opens the playing field that allows us to buy patented drugs that are available in other countries. The Second is the "Bolar Exception" which allows local or any pharmaceutical company to start the process of experimenting the drugs that are almost off-patent, such that when it's about to expire they don't have to wait for another three years. That's how long it takes to go through the registration process. So this way, two years before, they would already be working on it. Then from the day it expires, [the drug will already be] available to the public.

Twink Macaraig: I think it is important to emphasize that [the bill still] allows the patent to run its course. It's not as if you're violating it

Sen. Pia S. Cayetano: Yes. We are not taking away anything from them (drug patent owners).

The Third is the [provision on] "Government Use," which is basically meant to expedite and make it more simple for government to import certain patented drug products for national emergency. But it would be for the President to determine, so it [would be] very specific naman 'no. Let's say bird flu. The President may say, "you know we really have to allow the government or it's authorized contractor to use this." And then the Fourth is on "New Uses." This one says you cannot just patent the same invention for a new use, or when a new ingredient is added to the drug. So, for example, you and I are using a kind of lotion which later turns out to be an effective bug spray pala. It's the same invention for a different use. They can't apply for a new patent, since it's the same invention. They just came up with a new use. [This excuse] is usually used to prevent other parties from coming in and manufacture the same drug. They may have so many patents for the same invention.

TM: I take it that these provisions were somehow patterned after existing laws elsewhere

SPSC: Yes, like the "Bolar Exception" came from the United States. It was named after Senator Bolar. So one of the arguments we haveSenator Mar Roxas as the principal sponsor of this bill as the chairman on the committee on trade, and I as the chair of the committee on healthis that even in the United States, where they are very protective of industry, they have allowed it. I don't see why we can't also do it as a developing country. In the case of the Bolar Exception, it is practiced in the United States, Canada, Australia and a lot of Latin American countries and some Asian Countries. In the case of Parallel Importation, it's in a lot of Asian Countries and the European Union. And so we're lagging behind.

TM: Could it be that the easing of these restrictions will, perhaps, also increase the likelihood of importing fake medicines?

SPSC: That is a legitimate concern raised by the Multinationals. We do know that the problem exists, and in fact, one of the first issues I heard in the committee on health is the existence of fake drugs in the market. We do know that these exist, but it's not a reason for us to say [that we should not pursue this new measure]. What we have to do is strengthen our regulatory agencies to ensure that fake drugs don't come in. We can raise the budget for health, which is something the health advocates and myself have been campaigning for. I hope we really do that simultaneous with the implementation of this bill. The BFAD has facilities and even the Bureau of Custom is properly trained to look into these. But they need additional support. We should do that.

TM: I take it that you've also done the necessary research as to the impact of something like this on the business environment. There is a concern that the multinational companies, the pharmaceutical companies might be put out of business by

SPSC: That's impossible. They would not be put out of business because they also have all the resources. Let me put it very simply: in case of parallel importation, we are not depriving them of their right to profit because what happens is that companies based here would now be allowed to import the patented products from other countries that have made the drugs available at a cheaper price. So effectively, we will still pay, be it to a subsidiary based in, lets say, Thailand, India or wherever it is being produced. The profit made for the "first sale" is still going to be paid so that the profit is still ensured. The importer is still going to pay for the regular wholesale price. What will be prohibited is that they make margins that are way over board. Like a thousand times, or three thousand times. We have statistics apparently showing that [profiteering] actually happens.

TM: Okay, but there has to be some sort of backlash that they are anticipating...

SPSC: Well, it was clear during our hearing and the proceedings that the most of the multinational companies are [bent on protecting] their industry, and so they came up with a lot of reasons. I, along with Senator Mar Roxas and many of our colleagues in the Senate feel strongly that this [bill] is necessary. Even if you look at the international trade arena, we have what we call TRIPS, which is the international agreement with respect to trade-related intellectual property rights. It was recognized in a subsequent gathering, which is called the Doha agreement, that there's a need to balance intellectual property rights, economic stability and economic gain of companies with public interest. So clearly, these provisions that were introducing to our patent laws are recognized already in the international arena. We are merely implementing it in our country but we really need this.

TM: But then again the Philippines has such a bad reputation already in respecting intellectual property rights...

SPSC: When it comes to pirated music, videos

TM: Exactly. So wouldn't this bill promote the image further?

SPSC: Actually, on the contrary, we have very protective policies on the right of intellectual property holders when it comes to drugs and medicines. Why? Precisely because the multinationals have been doing good business in the country and they have been able to protect their rights, as opposed to those who are in the entertainment industry. The government has effectively allowed the multinationals to protect the industry for a very, very long time. So all we're doing now is leveling the playing field so that competent companies can come in and also bring in cheaper medicines.

TM: You've seen how the bill progressed in the Lower Housedo you think they will ever get around to passing and finally ratifying it as a law?

SPSC: When our session was ended last night ( Feb.20), we thought that it wouldn't pass anymore. But it actually passed very late in the evening on second reading. So unless something happens, that should go into third reading. But I know Senator Mar, as the principal author, is disappointed because this lag in time is already costing billions. I mean, I had a father who was very sick. The time difference we could have made a medicine that is only available in the US, is a month. It could either mean saving his life or not. So that is what this time lag is causing. A lot of people would not be able to buy medicines in the next three months unless this bill is passed on third reading. What we intend to do, with Senator Roxas, is to begin discussions with our counterparts in the House because we'll have to have a bicameral conference soon to work on the disagreeing provisions. The House has other provisions there, you know we have to sit down. So that's going to be like a third battle ground.

TM: Now, apart from lowering the cost of medicines, I see that this bill actually promotes business in the sense a lot of people would be able to enter

SPSC: The nice thing is that it will open the door to legitimate smaller companies who have had difficulty entering the market. So it will open the door to local companies who make generic products. Because number one, they don't need to wait for the drugs to expire. They will be able to market their drug products as soon as the [patent for it] expires, may market na sila. With respect to parallel importation, it will provide opportunities for companies to bring in cheaper drugs. And a lot of pharmacies, local pharmacies, are already looking forward to that. It would really stimulate the economy.

TM: But I have to say that I agree that the government as a condition must be vigilant in guarding against fake drugs, which is a legitimate concern. And it can easily be addressed if we put our minds to it and by strengthening the BFAD

SPSC: I mean their budget is really small. Every year we go through these in the budget deliberations. We need BFAD facilities in the Visayas and Mindanao so the generic manufacturers could have their products brought to the testing facilities centers there. And so it doesn't have to be centralized in Metro Manila.

TM: But have you been assuring the pharmaceutical companies that they will still make profits sufficient to cover their considerable R and D expenses? Well that's always been their argument...

SPSC: I'm glad you asked that. Let me again emphasize, when a local company decides to import a drug, lets say from Thailand, they're going to buy it from the mother firm of the foreign company. So that foreign company would still make the profit on the first sale. It is not as if were not respecting patent.

TM: Well it does appear to be a very well thought-out bill.

SPSC: Thanks. But the credit should really go to Senator Mar Roxas. I mean he's the principal sponsor. #

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