The Philippines has begun to roll out universal health care (UHC) since President Rodrigo Duterte signed the landmark UHC Bill in February 2019. This is a development that could provide ample opportunities for private sector investment. When the bill was signed into law, all Filipinos had immediate eligibility for the full spectrum of health care available in the country.
Under UHC, all citizens are enrolled in the national health insurance programme either as direct contributors – those who have the capacity to pay health premiums – or indirect contributors, including low-income earners, pensioners or those on welfare, who have their payments made by the state. Patients can register with a primary health care provider of their choice for services such as outpatient care, medicines and laboratory tests. They can also be included in the primary care benefits package available from the Philippine Health Security Corporation (PHSC).
This development aims to ensure that all Filipinos, regardless of income and financial status, have access to medical treatment. In debates on UHC, Joseph Victor Ejercito, chairman of the Senate Committee on Health and Demography, attested that due to lack of coverage many people delay seeking medical assistance until their conditions are serious. In addition, the bill stipulates that increased investment be made in public health facilities, especially in underserved regions, along with raising the number of health professionals. According to the Department of Health, as of 2019 the nationwide doctor-to-patient ratio sat at 1:33,000, well below global averages of 1:6600. Meanwhile, the national bed-to-population ratio was 1:1121, dipping as low as 1:591 in Manila and reaching as high as 1:4200 in the Bangsamoro Autonomous Region in Muslim Mindanao.
Though the state is set to play a greater role in the health sector, the UHC bill is also expected to open the door for increased private sector participation. In particular, it is anticipated that suppliers of generic pharmaceutical products will see their market opportunities increase, with demand expected to climb, as UHC requires drug outlets to carry generic equivalents of all medicine. “The government needs to be more creative in finding solutions based on technology and innovation,” Jozica Habijanic, country manager at Roche Diagnostics Philippines, told OBG. “This is especially crucial when it comes to successfully encouraging partnerships with the private sector and universities under public-private partnership models.”
According to consultancy firm GlobalData, the Philippines pharmaceutical segment was valued at $3.6bn in 2016 and is forecast to rise to $4.1bn by 2020. In 2019 generic drugs made up approximately 60% of all pharmaceutical sales, with multinational companies accounting for 70% of the market through imports.
“The UHC implementation will be challenging during the first few years, but in the long term it will be beneficial to citizens,” Rajan Kumar, general manager at Novo Nordisk Pharmaceuticals Philippines, told OBG. “The government has been moving towards UHC for some time and has employed a number of options to improve access. For instance, as with other countries with UHC, the government has begun pooled procurement for essential products, creating both access for patients and opportunity for business growth,” he added.
While the rollout of UHC is expected to be accompanied by a series of benefits, some concerns over the state’s ability to implement the initiative have been raised. The expansion of medical coverage, services and infrastructure will affect existing state budgets, particularly given the government’s commitment to keeping its deficit within 3% of GDP. On the back of a series of other major infrastructure projects, the deficit is expected to reach 2.9% in 2019, according to HSBC Global Research. “Budget limitations and a lack of financing will be the first challenge,” Maria Corazon Consunji, president and CEO of the Makati Medical Centre in Manila, told OBG. “We need infrastructure and qualified personnel, especially in the provinces.”
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