Country Report: Philippines

This sponsored supplement was produced by Focus Reports

Project Publisher: Mariuca Georgescu

Project Director: Carla Verdera Mateu

Coordinators: Brandon Mourich & Julija Lukaityte

Project Assistants: Zoë Bergin

Senior Editor: Louis Haynes

Editor: Patrick Burton

For exclusive interviews and more info, please log onto www.pharmaboardroom.comor write to contact@focusreports.net

Photo credit: Jeffrey Pioquinto

With 7,000 islands from Palawan to Cebu, each adorned with white sand beaches and starfish galore, it is easy to understand the country's catchphrase, "It's more fun in the Philippines." But with enormous growth in the pharmaceutical industry, this slogan is not limited to the country's utopic beaches. The government's focus on generics has made healthcare more accessible to the general population, increasing access and driving growth for the industry. This in turn has bolstered the country's economy. The pharmaceutical industry has contributed more than twice as much towards the economic growth of the country, equaling more than USD 2.9 billion since 2014.

Secretary of Health Paulyn Jean B. Rosell-Ubial has encompassed the government's plan to increase access in their motto, "all for health towards health for all." This refers to reaching patients from the most remote archipelago to the densely populated urban jungle of Makati. Secretary Ubial has understood the vital role that the industry can play in addressing Filipino people's healthcare needs and is urging greater collaboration between the public and private sectors to close access gaps.

Paulyn Jean B. Rosell-Ubial, secretary of health

PUTTING YOUR MONEY WHERE YOUR MOUTH IS

With an economy experiencing seven percent growth, a rate forecasted to continue, and a new administration emphasizing the importance of expanding access to healthcare, it is clearly an exciting time in the Philippines. In order to capitalize on this growth and maintain it moving forward, the government, pharmaceutical and life science industries must collaborate with one another. This will enable the Philippines to continue to drive the country closer to its goal of expanding access to affordable, quality healthcare to all Filipinos, regardless of income or geography.

Ramon Aristoza, acting president and CEO, Philhealth

"President Duterte gave me three main objectives when I was appointed," declares the new Secretary of Health. "Number one was to address the drug abuse and dependence problem in the country, second was to eradicate corruption and the third was to take care of the poor, which, broadly speaking, is what government is here for." Additionally, Secretary Ubial explains how the President directed her to work towards achieving the goals of the Department, and to "not worry about resources, to simply do my job and the resources will be provided."

The importance of having the necessary resources was also highlighted by one of Secretary Ubial's predecessors, Enrique T. Ona, who observes that "progress in the healthcare system is a continuous process, however, having the funds to support this progress is extremely important." Ona continues, explaining how during his tenure the government passed the "sin tax" on tobacco and alcohol, with 85 percent of the funds being allocated to healthcare. Ramon Aristoza, the acting president and CEO of PhilHealth, the national health insurance program in the Philippines, also expanded on the increase in funding, stating that during the old administration, we received only USD 745 million in subsidies for the poor, however, now, under the General Appropriations Act, in 2016 we received over USD 880 million, forecasted to increase to more than USD 100 million in 2017.

This commitment to expanding healthcare services, both in past administrations and in the current Duterte government, seems to be helping better the lives of Filipinos as well as drive growth within the healthcare and life science industry.

Cheryl Maley, managing director, Novartis

COLLABORATION IS KEY: PARTNERING FOR BETTER HEALTH

In addition to the increase in funding from the government, continued collaboration between the public and private sectors is also one of the key drivers of growth for the healthcare and life science industry in the Philippines. Cheryl Maley, managing director of Novartis Philippines, underscores this point, stating that "This is another area where I have been pleasantly surprised, as PHAP and industry collaboration is actually very strong here in the Philippines. The agenda is clear, and it is not simply self-fulfilling, it is very much motivated to create better outcomes for the healthcare system throughout the country. I also have found the collaboration between the private and public sector to be very impressive. Internally within Novartis, this is actually an area where the Philippines stands out as well, as a model for collaboration between the private and public sectors." She further expanded on the company's commitment to better healthcare, outlining their efforts to bring 175,000 anti-malaria treatments to the Philippines alone since 2003, as well as an access to medicines program that has served 2,500 patients nationally, totaling roughly USD 400 million. Beaver R. Tamesis, president and managing director of MSD, also elaborates on the necessary collaboration with the government when working to increase access to healthcare for the Filipino population. "Expanding access to the poorer segments of the population is something that we are passionate about," he explains. Speaking to the company's efforts to expand access to their vaccines, particularly for HPV and pneumonia, Tamesis adds that "more important than just being a supplier, we needed to work closely with government to make sure that the vaccines get into the body of the relevant population."

Beaver R. Tamesis, president & managing director, MSD Philippines

Increasing access to primary care services is another issue currently being addressed in the country. Theresa Martinez, general manager of Roche in the Philippines, explains that "There remain opportunities to broaden access via structural investments for the population to reach healthcare professionals, and then there remains the issue of broader access to innovative drugs." an area where there has been progress in recent years. In 2015 alone, the Department of Health invested in infrastructure projects in 596 Barangay Health Stations (basic primary care facilities), 138 local government unit hospitals, and 207 rural health units.

Theresa Martinez, general manager, Roche

In addition to expanding primary care and increasing funding for structural investments in hospitals, there is also a need to expand access to high-quality, yet affordable, medical equipment in the Philippines. To better address the needs of emerging markets, such as the Philippines, GE Healthcare has developed products for such regions. "Products are being developed specifically for this region, with the region's needs in mind. Obviously these products will be more affordable, but their quality will be just as good as any GE product" explains Ivan Arota, country manager of GE Healthcare Philippines. Through these various initiatives, as well as collaborative efforts across both the private and public sectors, progress is being made in expanding access to all types of healthcare and pharmaceutical services throughout the country, although there many opportunities for future advancement remain.

CHANGING TIDES: THE RISE OF THE GENERIC MARKET

In addition to the drastic increase in health funding in the Philippines, one of the biggest evolutions within the industry has been the rise in prominence of generics, now representing 65 percent of the market. As companies have worked to gain the trust of the population for their generic products, there has been a dramatic rise in acceptance from the Filipino population. "We have been able to prove through testing and the support of doctors that our generics are of the same standard as the innovative drugs and we have greatly reduced the costs of medicines for the Filipino people," states Kamal Abichandani, chairman of Ambica, a company that has been able to reduce the prices of some basic medications by over five times. Bert and Alec Van Dierendonck, the founder and country manager of South East Asia respectively at EGI, add to this point, stating that "Once we developed these relationships and built trust, we began to sell large volumes of our products."

Javish Abichandani, CEO of AGlobal Care, stresses the importance of building trust; "We distribute our products nationwide, and we are known to always have been keen for quality. Even though our products are affordable, we never sacrifice the quality and efficacy of the products. We are known throughout the industry for having quality products, delivered quickly and on time. When our distributors bring our products to the hospitals and doctors find out that it is AGlobal Care, they know it is a quality product."

Javish Abichandani, CEO, AGlobal Care

The fastest growing generics company in the Philippines, as well as the largest in terms of generic products globally, Sandoz, has brought approximately 80 products to market in the country. "We promote these products in three ways: through in-house promotion, partnerships with pharmaceutical companies and partnerships with retail chains" explains Kuntal Baveja, country head and president of Sandoz in the Philippines. Baveja continues, stating that the company has "expanded in all three of these segments, something that has helped us to greatly expand our reach."

Kuntal Baveja, country head and president, Sandoz

While the growth in the generic market has been impressive, Teodoro Padilla, executive director and Reiner Gloor, advisor and honorary member, of the Pharmaceutical & Healthcare Association of the Philippines (PHAP) give a reminder that "What is important is that we continuously make more drugs and affordable generics available." To accomplish this, they highlight the need for there to be a strong relationship between the innovative and generic industries, observing that, "The generics industry would not be able to thrive without innovation, and this is something that the average citizen sometimes does not understand. We have worked to promote the availability of new medicines, vaccines and molecules, as well as to increase the generic output."

Teodoro Padilla executive director, PHAP

Multicare is a good example of a local company investing in partnerships with innovative companies. "It is very important to always be bringing innovations. There are many needs in the Philippines that we do not cover," insists the president of Multicare, Meny C. Hernandez. He elaborates, "the Philippines has a gap and Multicare is here to fill it with the help of companies such as AstraZeneca, Roche, MSD and GSK. Even though they have their own operations, some lines of products need a third party to be distributed. Our expertise, shown through the fact that we are an affiliate of Lupin, and the local knowhow that we have, makes us the preferred partner of the industry."

As new generic drugs are continuously made available, companies will need to work to differentiate themselves within the industry to be able to achieve success. Nestor Lumanas, general manager of Sannovex, a local distributor founded in 2010, explains that "The thing that makes us stand-out the most is our customer focus and our sales force. Some medical reps will just visit, but we build the relationship and get to know the doctor including their prescription habits and what their needs are. This allows us to adapt the way we sell to what the doctor most needs from us. We find out what the most prescribed medicines are for certain doctors and then we compare it to what we offer. To put it simply, Sannovex knows how to get the job done."

Meny C. Hernandez, president, Multicare

BUILDING MANUFACTURING EXPERTISE

With the rapidly expanding Filipino healthcare sector also comes ambitions for more local companies to expand into manufacturing. Delex's Oroceo plans to do just this, both to complement the company's long-term strategy of focusing on the reliability of their supply chain and to expand into product segments that are more challenging to import from outside sources. "We are actively working at the moment to begin the process of building a manufacturing plant," attests Oroceo, further explaining that "we Filipinos are capable and competent in terms of manufacturing, research and distribution. There is a wealth of talents we can tap for this purpose."

Francisco P. Sales, president and CEO of Vizcarra Pharmaceuticals, another local distributor, also affirms the benefits of expanding into manufacturing to better control and sustain the supply of products; expanding on the benefits of partnerships to capitalize on best practices and operational expertise. Sales attests that "we have grown from 10 to 110 employees through product diversification. If we were to go into local manufacturing, we would need external partners that could provide the technology and know-how"

Francisco Sales, president & CEO, Vizcarra

Once Filipino companies expand into manufacturing, they will help to boost the contribution of local companies to the pharmaceutical industry's manufacturing capabilities, which at the moment is quite low. This is made evident by Higinio "JP" Porte, president of the Philippine Pharmaceutical Manufacturers Association (PPMA), who notes that "the challenge that we are facing as an association is that, even though the pharmaceutical industry in the Philippines is valued at USD 2.6 billion, less than 50 percent of that is supplied by local manufacturing companies, we need to enhance the manufacturing capabilities of these companies."

Higinio "JP" Porte, president of the Philippines Pharmaceutical Manufacturers Association

What is clear is that the Philippines is a country that is ripe for continued growth, presenting opportunities for companies to expand their operations within the country and further developing the pharmaceutical manufacturing sector.

PascualLab, one of the best pharmaceutical manufacturers in the country and a family-run operation, is investing a lot in new strategies to further their own growth and ensure the growth of the industry as a whole and their many partners. Jose Augusto G. Pascual, president and CEO of PascualLab, elucidates "With a professional family, we are keen to focus on accountability, everybody must be accountable for their efforts and actions. And right now we have the high-quality team that we need to continue our growth in the future."

Jose Augusto G. Pascual, president & CEO, PascualLab

CONTRIBUTING TO GROWTH

Looking to the future, considering the booming population of more than 100 million and a growing economy, the Philippines will continue to attract investments. Peter Kompalla, executive director of the German-Philippine Chamber of Commerce and Industry, expands on this, detailing how, "from a company perspective, many perceive the Philippines as a very attractive market. We have asked companies across the ASEAN region where our member companies would like to expand, and the Philippines is among the top three." As companies continue to extend their operations to the Philippines, Kompalla has two pieces of advice, "First, preparation is important before entering the market. There is a lot of market potential, but there is also risk, meaning you must prepare well. Second, you must find the right partners and resources."

Peter Kompalla, executive director, German-Philippine Chamber of Commerce and Industry

Another example of German experience working to grow a company's footprint in tandem with developing the Filipino population is Bayer, where country division head of consumer health Alvin So relates how the company is capitalizing on the rising disposable income within the Philippines, helping bring more products to consumers. "We have 100 million people living in this country, all potential consumers for our brands, particularly in consumer care and OTC which serve a much broader range of the population. With the economy doing extremely well over the last few years, we will see a corresponding increase in the incomes and consumption of the population, boosting demand for pharmaceutical products, both prescription and OTC" he states. Luis Mendez, the chairman of the Philippine-Swiss Business Council elaborates on the rising importance of the consumer population in the Philippines. "Not everyone realizes that the Philippines is a huge market of over 100 million people, second only to Indonesia in the ASEAN region."

Alvin So, country division head, Bayer Consumer Health

What is evident in the Philippines is that this is a country on the move, and to continue to drive the momentum in the healthcare and life science industry, actors across the sector must join together. Secretary Ubial highlights this point, underscoring that "from the Philippines, and from our President, we want to send a message that we are coming together as a country to make sure that our population has access to the best quality health services from the government. The only way that we can achieve this is by engaging all actors in the sector. This effort is not going to be accomplished simply by the Department of Health, we cannot do this alone. Everybody, the government, private sector, NGOs and communities themselves must be engaged. All for health towards health for all!"