The introduction of the Universal Health Care (UHC) Act coupled with business and corporate tax regulatory reforms in the Philippines is likely to open up new avenues for the Indian pharma industry, says GlobalData, a leading data and analytics company.

GlobalData’s report, ‘CountryFocus: Healthcare, Regulatory and Reimbursement Landscape – Philippines’, reveals that the pharmaceutical market in the Philippines is expected to grow at a compound annual growth rate (CAGR) of 4.65% to reach PHP241.9bn (US$3.7bn*) in 2025.

The UHC Act was introduced in February 2019 in the Philippines to ensure ‘100% population coverage’ under the National Health Insurance Program (NHIP). According to the Department of Health (DOH), Philippines, the total healthcare budget for the implementation of the UHC Act in 2019 is PHP257bn versus PHP171bn in 2018.

Sasmitha Sahu, Pharma Analyst at GlobalData, comments: “The introduction of the UHC Act has increased the outlook on healthcare spending. While the innovator pharmaceutical space in the country is dominated by the subsidiaries of key US and EU companies, India can look to maintain its dominance in the generic pharmaceuticals space against this backdrop.”

GlobalData’s research reveals that India was the top import partner of the Philippines in 2018, contributing 12.6% of the total pharmaceutical imports into the country. In 2018, generics accounted for 76% by volume of the total pharmaceutical market in the country.

According to the Embassy of India in Manila, India’s pharmaceutical exports to the Philippines increased from US$197.32m in FY2017-18 to US$220.98m in FY2018-19.

Sahu explains: “The Philippines’ pharmaceutical market is import-driven. Indian generics, which entered the Philippines after the introduction of the Generics Act of 1988, have witnessed an upward uptake trend due to their equivalent or superior efficacy at lower prices.”

The Philippines introduced corporate tax reforms in 2019 applicable to both domestic corporations and Philippine operations of foreign companies apart from the ‘Ease of Doing Business and Efficient Government Service Delivery Act’ implemented in 2018 to improve business transactions.

Sahu continues: “As the Philippines looks to capitalize on the Indian generics expertise, its President had recently extended invitation to the Indian pharma companies to set up pharmaceutical manufacturing plants in the country. Many notable pharmaceuticals events and workshops were already conducted by the Indian Government and pharma bodies in this direction.”

According to GlobalData’s Country Risk Index (GCRI), the Philippines moved up four places in the third quarter (Q3) of 2019 and there is manageable risk of doing business in the country.

Sahu concludes: “Apparently this is a mutualistic scenario. Indian generic companies can leverage the current favorable investment and economic conditions to gain greater market share by setting up local units. At the same time, the Philippines can provide uniform standard of healthcare services to the entire population at an affordable cost.”