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The high cost of medicine is the number one financial burden of every Filipino family and the biggest reason for poverty after a family member gets sick. It is a cruel irony that this reality persists, decades after the Generics Act of 1988 was passed with the explicit promise of preventing such hardships.

The law was meant to champion independent local drugmakers and foster a competitive market to make healthcare affordable. Today, that promise remains unfulfilled, not because the law was defeated, but because its spirit was quietly subverted from within.

A look at the top pharmaceutical companies operating in the Philippines reveals the titans who now define the landscape. A recent ranking of the top pharmaceutical companies in the Philippines by AIPAK, an international leader in pharmaceutical production solutions, features global powerhouses like Abbott Laboratories and Ajanta Pharma, alongside domestic giants like Unilab and Pascual Laboratories.

The evidence for this market capture is laid bare in a discussion paper, "Pharmaceutical Competition in the Philippines," authored by Cielo Magno, PhD, and published by the Philippine Competition Commission (PCC). The paper provides a data-driven narrative of how the dream of affordable medicine has been systematically reshaped by the industry’s most powerful players.

Their winning strategy was to shift the battlefield. The real market war is not being waged between expensive originator drugs and their low-cost, unbranded alternatives. Instead, it is fought in the lucrative arena of "branded generics." The PCC's data is staggering: branded generic drugs overwhelmingly dominate the landscape, accounting for approximately 90% of total sales. In stark contrast, the unbranded generics—the very drugs intended to drive down costs for the common citizen—make up a mere 5% of the market. This has created a widespread illusion of choice, where consumers believe they are opting for an affordable generic, while often just choosing another product from a major corporation's portfolio.

This market hijack was successful because it exploited deep-seated issues of trust. The PCC paper highlights a widespread public perception that generic drugs are inferior in quality to branded medicines. Large corporations leveraged this by investing heavily in marketing their branded generics, creating an aura of reliability that independent firms could not afford to replicate. The influence of physicians, who often prescribe specific brands, further solidifies this market structure. One study noted that 80% of shoppers with prescriptions were prescribed branded drugs, and all of them purchased the brand prescribed.

The commission’s economic analysis delivers the final, damning verdict. It found that only the entry of branded generics creates meaningful price competition that lowers the cost of all other drugs. The entry of unbranded generics, the supposed heroes of the law, has become statistically ineffective at fostering competition.

The conclusion to the grim situation of the law is unavoidable. The Generics Act laid the foundation for a healthier market, but it failed to anticipate a strategy where branding, not just efficacy, would define the competition. The system now favors large corporations with the capital for massive marketing campaigns, creating immense barriers to entry for smaller, independent Filipino players. The dream of affordable medicine for all will remain unfulfilled until we address the reality of a market that is hiding in plain sight.

Note:

For readers who wish to conduct their own research, these companies can be verified through public records. The Philippine Food and Drug Administration (FDA) maintains a database of all registered drug industry members on its official website. While the database is vast, a convenient search function allows anyone to easily look up a specific company by name to confirm its registration and legitimacy. This simple act of verification is a crucial first step for any consumer navigating the complex pharmaceutical landscape.