The Philippines: OTC and Pharma market
The Philippines is consistently ranked as thetenth–most attractive OTC and Pharma market in the Asia-Pacific region and as the third-largest market in ASEAN (after Indonesia and Thailand). The bulk of sales in the Philippines comes from prescription drugs, which represent approximately 70% of the country’s total pharmaceutical sales.
OTC products account for around 24% of the country’s total pharmaceutical sales, with nutritional products occupying the remaining share of the pie. Pharmaceutical patents and trademarks are well-secured in the Philippines; the country’s intellectual property code metes out harsh penalties for the infringement of patent and trademark rights, which indicates a good starting point for considering this Emerging Market as an investment platform.
The top causes of mortality and morbidity in the Philippines are still respiratory and cardiovascular-related diseases, which is reflected in the strong demand for drugs that meet these needs. There are five major pharmacy chains in the Philippines: Generika Drugstore, Watsons, South Star Drug, Rose Pharmacy Inc, and Mercury Drug, the last of which accounts for approximately 85% of product sales.
The rest is distributed among hospitals and other government institutions. Multi-national companies are the main players in this market, accounting for approximately 65% of the total share, with national companies occupying the remaining 35%. Foreign pharmaceutical companies control at least 75% of the local drug market in the Philippines. In order to place a product in the Philippines, it must first be registered with the Philippine Bureau of Food and Drugs. Once all the necessary documents are in order, the pharmaceutical registration process is relatively straightforward.
The local pharmaceutical sector is a mix of manufacturers, traders, and something in-between. The top spot is occupied by a local giant: United Laboratories. Unilab, as it is referred to, accounts for 25% of the total sales of the top 20 Pharma companies. Other locals included in this ‘top list’ are Pascual Laboratories, Natrapharm and GX International.
The Philippines OTC sector is dominated by three Filipino pharmaceutical companies that control over half the sector. The Philippines generic industry is actively backed by the government and is led by Unilab.