PEZA mulls PBBM’s pharma zones thrust

Pharmazones established in PEZA-controlled areas will serve as places where the agency can immediately test and register medicines upon entry to the Philippines.

Medical and drug manufacturing-related investments are seen to boom with the creation of pharmaceutical economic zones, the Philippine Economic Zone Authority said on Friday.

During a sectoral meeting with the Food and Drug Administration last Tuesday, 13 February 2024, President Ferdinand Marcos Jr. floated the idea of establishing pharma-zones which will serve as one-stop shops to make the drug application process more accessible and efficient.

FDA director general Samuel Zacate stated that pharma-zones established in PEZA-controlled areas will serve as places where the agency can immediately test and register medicines upon entry to the Philippines.

“We are excited and more than encouraged to be facilitating the establishment of pharma ecozones in the Philippines which will become instrumental in the Administration’s efforts to enhance accessibility to medicines and lower drug prices,” said PEZA director general Tereso Panga said in a statement on Tuesday.

Ecozone transformation roadmap

Under the Philippine Development Plan 2023-2028, PEZA is tasked to accelerate the implementation of the ecozone transformation roadmap through the creation of different types of economic zones, including pharmaceutical ecozones.

Pharma zones shall become home to companies engaged in all aspects of medical and drug manufacturing-related activities, most especially in research and development, clinical testing and trials.

“We are coordinating with the Department of Health, FDA, DTI and the Philippine Chamber of Pharmaceutical Industries in crafting the guidelines for the registration of pharma zones under PEZA in line with this mandate,” stated the PEZA chief.

MOA with FDA

Earlier, PEZA entered into a Memorandum of Agreement with the FDA to streamline the applications for permits and licenses to operate for RBEs engaged in the manufacture of food, cosmetic and drug products, including medical devices, and to ensure compliance of ecozone locators to all provisions of the Food and Drug Act of 2009 and other pertinent laws.

There were also talks in 2017 between the Philippine and the Indian Governments to set up manufacturing zones in the country for Indian pharmaceutical companies wanting to tap the ASEAN market.

Likewise, in 2021, PEZA conducted a briefing for the Pakistan Pharmaceutical Manufacturers Association given its interest in setting up drug manufacturing operations in the Philippines to address the growing local demand for generic medicines.

“These pharma ecozones will in the future boost local supply as well as provide business and capability building opportunities, particularly for Filipino SMEs into manufacturing and tolling of drugs and food supplements. We can contribute to the DTI’s science, technology and innovation-driven industrialization strategy through the pharma zones that will seek to strengthen partnerships between global drug manufacturing companies and the local industry players with their integration into the ecozone and global value chains,” Panga noted.

Fiscal incentives

Under the CREATE Law, domestic market-oriented enterprises to be registered in PEZA and other IPAs are granted fiscal incentives depending on their location and activity. For health-related activities like manufacturing drugs and medical R&D, they may enjoy up to 12 years of tax perks.

As of December 2023, PEZA plays host to a total of 26 operating companies in the manufacture of pharmaceutical products and medical equipment or devices like Terumo, Arkray Industry, Royale Life Pharma, JMS Healthcare and Philipcare Medical, generating about P25.489 billion worth of investments and more than 19,000 direct jobs for the country.

Moreover, PEZA is reviving talks with leading Filipino companies in pharmaceutical-related activities such as Lloyd Laboratories, Pascual Laboratories and United Laboratories Inc., for the establishment of a modern pharma park in the country.