OBG talks to Clinton Campos Hess, President & CEO, United Laboratories (Unilab)

Interview: Clinton Campos Hess

In what specific ways can primary care be incentivised in the health care system to trim costs and expand services?

CLINTON CAMPOS HESS: There are many primary care clinics starting to pop up. These are mainly community-based clinics with very basic capabilities, but they cost only a percentage of bigger hospitals. However, there are still challenges because there are not enough doctors to cover the whole of the Philippines or interested doctors to move into some of the rural locations.

While the trend of moving towards primary care is starting to happen, it will depend on the government to either accelerate or decelerate the move of the market. If government becomes involved and commits beyond simple reimbursement of certain types of procedures but targets primary care level specifically, the farther people will adjust their business models.

What factors must the Philippines address in developing a competitive medical tourism industry?

HESS: From a legislative standpoint, the government needs to address the nuances in the law that create barriers for the development and full practice of medical tourism. Foreign doctors, for example, cannot practice in the country because of a legal prohibition. If the Philippines wants to serve the Japanese population, they would need to have Japanese-speaking medical consultants, however, these are currently barred from practicing medicine in the Philippines.

There must also be a combined effort on behalf of the medical community and government to focus on centralising the process of investing in medical tourism. The Philippines has the advantage of being a low-cost country, and as such, it could foster a retirement industry by attracting foreigners from high-cost countries. Although the retirement industry already exists, the challenge remains access to health care, especially as foreigners would not be able to find the same levels of health care access or medical infrastructure as present in other similarly low-cost destinations in the region.

To what extent have cost containment measures and the growth of generics affected the domestic pharmaceutical industry?

HESS: The maximum drug retail price (MDRP) instituted in 2009 shifted the landscape because it forced price reductions, which particularly affected multinationals enjoying large margins. The market has now repositioned at a similar competitiveness level pre-MDRP and is driven by a surge in generic pharmaceuticals and the emergence of new players providing generics opportunities.

The presence of brand name and generic products from around the world has not only created an increasingly competitive market but also challenges the ability of regulatory agencies to keep up with the volume of new drugs. Regulators need more support and a wider budget in the coming years to ensure that medicine in the market meets quality standards.

How have generic drugs enhanced accessibility to health care for the underserved population?

HESS: Unfortunately, there have not been significant changes in terms of expanding access to lower-cost medicine, but the MDRP does provide the opportunity to access brand name medicine at a lower price. There is still an issue of trust surrounding the use of generic drugs, and people are willing to pay a premium for medicine they believe is of higher quality. As the market matures, consumers will begin to realise that there are indeed quality medicine alternatives at affordable prices, especially as the uni-branded or branded generics markets expand.

Catering to the underserved population is a challenge even with the availability of cheaper medicine, which remain too expensive for some. As a result, universal health care and social support efforts are an essential part of addressing the needs of the underserved. Expansion of the PhilHealth coverage and other initiatives by the current administration presents the best opportunities for enhancing accessibility for the underserved.