Congress recently passed a bill to implement Universal Health Care (UHC), including prescription drugs. The Senate is still debating amendments or alternative proposals to the bill.
The UHC bill is a great opportunity for Filipinos to realize the sustainable development goal of achieving universal healthcare and access to “safe, effective, quality and affordable essential medicines and vaccines for all.”
However, the reform of drug coverage in the Philippines must tackle the serious issues preventing Filipinos from having ready access to prescription drugs.
Access and affordability are a huge problem because prescription drugs are mostly financed out of pocket by patients. When a patient does not have the money to pay, he can try to obtain some financial help from the government, but this is where things get complicated.
They must navigate a complex bureaucratic system to find the right package at PhilHealth, explore available programs offered by the Department of Health, negotiate with the Social Security System, get into the right queue, apply at the charity sweepstakes, explore available local resources, or write to their senators and representatives who may have funding available for patients.
We must also add to this picture a fragmentation of the healthcare system, decentralized procurement with a massive number of intermediaries capturing markups, as well as drug companies providing incentives for physicians and pharmacists to prescribe and dispense more expensive alternatives.
In the end, not only do many people end up without access to the drugs they need, but the system also generates misprescribing, inappropriate use and substandard health outcomes.
This creates distrust in the public healthcare system. The Philippines is paying higher prices for its prescription drugs and spends more than other comparable countries, while obtaining less access to essential drugs.
What should be the alternative?
It is often argued that the UHC system is not realistic because it would be too expensive. When Thailand implemented its UHC system in 2001, life expectancy increased (considerably) for the whole population, but health spending did not.
Spending on health represented 4 percent of GDP before—and after—UHC implementation. (In the Philippines, it is now 4.5 percent of GDP).
Thailand simply spent on health services more rationally — for example, by systematically assessing health technology to make sure it maximizes the therapeutic value for every dollar spent, and by managing a formulary of essential services covered under the UHC system, thus allowing it to obtain the greatest bang for the buck.
The Philippines has a national formulary of covered essential medicines, but it is used to limit the purchase of drugs by public entities, and not to maximize cost-effectiveness. Price controls are based on internal average prices of a dysfunctional procurement system.
If Filipinos want to gain better access to the medicines they need, get more value for money, and ensure the more appropriate prescribing and use of medicines, here are five suggestions based on international best practices:
- Implement universal pharmacare: Coverage of the whole population is the most efficient way to organize health insurance, and it enshrines the principles of equity and national solidarity while reducing system fragmentation.
- Keep out-of-pocket costs at a minimum: Out-of-pocket payments should not be a barrier to needed medical treatments, and essential drugs should be free for all patients.
- Cover a basket of essential drugs for all: Essential drugs maximize health outcomes, and their cost is normally very low when purchased the right way. If short-term impact on public spending is an issue, universal coverage can start with a smaller basket of drugs, which will institutionalize a cost-efficient system that will grow through the savings it generates.
- Use a national formulary: Drug coverage is not about processing bills, it is about organizing procurement and distribution in a way that maximizes appropriate prescribing and cost-effectiveness by assessing the costs and benefits of each drug. A national formulary allows bargaining power to reduce prices through cost-containment strategies such as generic substitution, tenders and reference pricing.
- Enforce the national formulary: Patients must have access to the drugs listed, which means enforcing obligations to licensed providers and developing public accountability mechanisms.
Universal public coverage of a basket of essential drugs is no panacea, but it can go a long way toward improving the health of all Filipinos. It can provide better access and better prescribing of medicines, improve cost-efficiency and ease the financial burden of prescription drugs on Filipino families.
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Marc-Andre Gagnon, of the School of Public Policy and Administration, Carleton University (Ottawa, Canada), has been working for more than a decade on pharmaceutical policy.