Manipulation of drug prices

Dear PAO, My friend has a drug store business. I found out that she is hoarding a prescription medicine for high-blood pressure, because she had prior information that in a few months’ time the price will increase. Is she violating any law because over what she is doing? Sincerely yours, Timoteo

Dear Timoteo,

For your information, the law that addresses your situation is in Sections 23 and 24 of Republic Act (RA) 9502, otherwise known as the “Universally Accessible Cheaper and Quality Medicines Act of 2008.” Sections 23 and 24 of the said law provide:

“Section 23. List of Drugs and Medicines that are Subject to Price Regulation - The list of drugs and medicines that are subject to price regulation shall include, inter alia:

( a) All drugs and medicines indicated for treatment of chronic illnesses and life threatening conditions, such as x x x;

(b) Drugs and medicines indicated for prevention of diseases, eg, vaccines, immunoglobulin, anti-sera;

(c) Drugs and medicines indicated for prevention of pregnancy, eg, oral contraceptives; (d) Anesthetic agents; (f) Drugs and medicines that are included in the Philippine National Drug Formulary (PNDF) Essential Drug List; and

(g) All other drugs and medicines which, from time to time, the Secretary of the Department of Health determines to be in need of price regulation.

“Section 24. Illegal Acts of Price Manipulation. - Without prejudice to the provisions of existing laws on goods not covered by this Act, it shall be unlawful for any manufacturer, importer, trader, distributor, wholesaler, retailer, or any person engaged in any method of disposition of drugs and medicines to engage in acts of price manipula or illegal combination or forming 5 of Republic Act No. 7581, otherwise known as the Price Act, and all other acts committed in restraint of trade.”

Relatedly, any violation of the abovementioned law shall be meted with a penalty pursuant to its Section 8 (h), which reads:

“Section 25. Penalty for Illegal Acts of Price Manipulation. - Any person or entity who commits any act of illegal price manipulation of any drug and medicine subject to price regulation shall suffer the penalty of imprisonment for a nor more than 15 years or shall P100,000 nor more than P10 million, at the discretion of the court. The court may also order the suspension or revocation of its license to operate (LTO), professional or business license.

Whenever any act of illegal price manipulation of any drug and medicine subject to price regulation is committed by a juridical or in case of a foreign corporation or association, its agent or representative in the Philippines who are responsible for the violation, shall be held liable therefor.”

It is clear from the provisions stated above that it is unlawful for any trader or dealer engaged in the disposition of drugs to engage in price manipulation such as hoarding. Any person who shall be held liable of committing such act shall or imprisonment or both, at the discretion of the court. The act of hoarding is clearly in contraven- tion of the very purpose of the law, which is to make accessible to the public cheaper and quality medicines.

In your friend’s situation, her practice of hoarding medicines for the purpose of selling them when prices are high is evidently in contravention of the law. This act of hoarding of medicines is illegal and may subject your friend to an im proven guilty by the court.

- tion that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to enlighten you on the matter.