Shift in law helps local pharma groups in the Philippines

A law passed in 2008 that imposed price caps on brand-name drugs and imposed stiff fines on doctors who prescribed those drugs instead of cheaper generics has boosted the fortunes of domestic drugmakers in the Philippines. Domestic producer Unitlab has captured nearly 48% of the local market thanks to the law, according to a report in the Financial Times, a success achieved at the expense of international giants such as Pfizer ($PFE), Abbott Laboratories ($ABT) and GlaxoSmithKline ($GSK), the report said. Generics accounted for 65% of the market last year, the report added, a huge jump from the 40% reported for 2009, according to the Pharmaceutical and Healthcare Association of the Philippines. The report said multinationals are now responding by either setting up branded generic lines or are giving up on manufacturing in the country. The higher use of generics has also led to the creation of two chains of generic-only drug stores, Generika and The Generics Pharmacy. The FT's Confidential Research service estimates that the market share of generics will hit 70% by 2020 as the government starts spending more on healthcare with revenues coming from higher tobacco and alcohol taxes. The research service also said the overall pharma market in the country will grow 4.4% to $3.25 billion in 2017-2018. Report (sub. req.)

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