Overview of the pharmaceutical landscape
The Philippines has a fast-growing pharmaceutical market, with total sales of about 236 billion Philippine pesos in 2022. About 90 percent of sales are supplied through retail outlets, particularly drugstores, while the remaining share comes from hospitals. Meanwhile, ethical products or prescribed medicines account for about 70 percent of the market, followed by over-the-counter (OTC) drugs. Pharmaceutical products are supplied by multinational companies (MNCs) and local companies. MNCs are marketing and distributing finished medicine products and raw and intermediate materials. Among the leading MNCs in the country were Pfizer, GlaxoSmithKline, BOE Ingelheim, and AstraZeneca. Meanwhile, local pharmaceutical companies have more diverse roles in the supply chain. Among the leading ones were Unilab and Pascual Laboratories which manufacture their medicines. Other local companies manufacture for MNCs or are limited to packaging, distribution, and retail. There were 398 registered drug manufacturers in the Philippines, with drugstores accounting for most of the country’s licensed drug establishments. The domestic market is segmented into three license types and is dominated by generic drugs.
The current supply of pharmaceutical products in the Philippines is primarily imported from the United States, India, and Germany. In 2022, total imports amounted to 2.7 billion U.S. dollars, with its peak value registered in the previous year. Most active pharmaceutical ingredients (API) used in manufacturing and formulating medicines and other pharmaceutical products are heavily imported from India, while locally produced pharmaceuticals mainly use sugar. Additionally, the Philippines imports generic drugs the national government procures as part of its Universal Health Care Act. In contrast, the country’s export value remains lower than its imports, highlighting a negative trade balance.
Outlook of the Philippines’ pharmaceutical industry
The country’s pharmaceutical industry is forecast to expand through improved government initiatives. The government has been encouraging foreign pharmaceutical companies to establish manufacturing facilities through the Corporate Recovery and Tax Incentives for Enterprises (CREATE) act that will give tax incentives to pharmaceutical firms with facilities there. In 2020, the Philippines had one of the lowest number of pharmaceutical companies in Southeast Asia. Ultimately, the government aims to increase local production share to 60 percent in the next decade.
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