“The IMS Health figures show around three to four percent growth in the marketplace,” remarks Raymund Azurin, chief executive of Zuellig Pharma Philippines, “but we are now at a point in time where the business models in this market are changing. The rise of generics and increasing government intervention through price controls have introduced a certain level of complexity. Below this complexity, however, there are many positive signs.” Distributors can be considered centerpieces on the chessboard. But how many centerpieces can the market handle? The Zuellig Corporation and its subsidiary Metro Drug already occupy more than 80 percent of the distribution market, but a number of niche distributors successfully made inroads too.
“In 2000, there was a significant opportunity to enter the growing dispensing business,” says Romeo ‘Romi’ Carbonel, president and CEO of niche distributor RBC-MDC. A former vice president of AstraZeneca Philippines, at that time known as Astra, Carbonel set up RBC-MDC 13 years ago to serve the dispensing market. “Around 1997-1998, we started recognizing that there was a growing number of doctors with the desire to increase the financial side of their profession, by handling their diagnosis and ‘business of dispenses products’ under one roof. Because the top distributor would not handle Astra’s dispensing business at that time, RBC took on Astra as its first principal,” explains Carbonel. Today, the company can celebrate 39 companies as principals during its 13th anniversary since incorporation. “Now, we are investing into a new warehouse that will double our existing capacity. Our volumes are increasing and our organic growth is tremendous,” Carbonel adds.
Today, there are roughly four to five active distribution companies that cater to the dispensing market”.“In general, the Philippines differentiates itself because of its strong dispensing market,” says Minerva ‘Mini’ Carbonel, COO of the family-owned RBC-MDC. “Before going to a hospital, most patients will see a family doctor for a small amount of money, which generally will also dispense the medicines themselves. Today, there are roughly four to five active distribution companies that cater to the dispensing market. Within this market, the oncology area is one of the first focal areas, as oncologists prefer to dispense the medicines themselves.” says the COO.
The policy shifts in favor of generic medicines were coupled with the proliferation of retail chains that heavily advertised the availability of lower priced generic alternatives. Indeed, the biggest success stories as a result of these policy shifts are the retail chains Generika and The Generics Pharmacy: with around 450 and 1,500 outlets mushrooming across the Philippine territory respectively, access to affordable generics has changed dramatically. Their rising power changed the interface between healthcare suppliers, patients and modern retail, especially as the healthcare industry is not necessarily used to modern retail practices, such as the strong focus on above-the-line marketing activities.
“When you would go to a pharmacy in the Philippines ten years ago, you would not be able to find or buy generic medicines. We recognized the opportunity to create a project of our own that would give access to quality affordable generic medicines to as many communities as possible. This project would primarily be a business enterprise but it would have a strong social side – this is Generika,” says Julien Bello, vice president of the company. “Generika is organized to make a meaningful social impact on communities all over the country. Educating people and giving them access to quality affordable medicines is the primary objective, as this goes a long way towards preserving their overall health at the lowest cost,” adds Teodor Ferrer, president of Generika.
the cost of medicine has gone down tremendously in the country.”Today, even Mercury, the country’s dominant retail chain, is changing. From a traditional basket of premium-priced branded medicines, its outlets now also carry generic medicines. “In terms of prices, the cost of medicine has gone down tremendously in the country. Generic medicines are already 50 to 70 percent cheaper than their branded counterparts, while prices are pushed down even more because of the competition in the market. This, together with the Cheaper Medicines Act (MDRP) of 2008, has been very beneficial to the patients,” explains Bello.
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