The World Health Organization (WHO) marks April 7 World Health Day. The theme for 2025 is Healthy Beginnings, Hopeful Futures to raise awareness of maternal and newborn survival.

Progress in reducing the number of maternal and newborn deaths has stagnated since 2015, the start of the Sustainable Development Goals (SDG). Global neonatal mortality stood at 18 deaths per 1,000 livebirths in 2022, still higher than the SDG target of 12 or fewer. Global maternal mortality ratio has only declined slightly – from 227 in 2015 to 197 per 100,000 livebirths in 2023 – far from the SDG target of 70.

Still, global trends in healthcare are shifting toward increased privatization and reduced state intervention – precisely when stronger public investment is needed to reduce preventable maternal and newborn mortality. What is even more alarming is how global health remains in the clutches of Big Pharma, which has detrimental effects not only on mortality, diseases and prevention but entirely on the right to health.

Profiting from health

Only a few big pharmaceutical transnational corporations (TNCs), Big Pharma as they are called, control the global industry. They assert their dominance by controlling the world’s medicine supply.

Big Pharma gains huge advantage in the market by contracting out the production and development of medicines to Contract Development and Manufacturing Organizations (CDMOs). 

In 2024, the CDMO market size was estimated at US$185 billion, with the Asia-Pacific region becoming the fastest-growing market. Active pharmaceutical ingredient (API) manufacturing, the most crucial and tedious process in drug development, comprises 63.7% of CDMO market share.Almost two-thirds of the API manufactured worldwide is from China and India whose CDMO market shares are increasing due to their skilled but cheap labor resources, inexpensive manufacturing sites, and streamlined regulatory reforms.

Through the utilization of contract manufacturers, Big Pharma eludes the large capital outlays needed to run factories while leveraging cutting-edge but low-cost manufacturing capability of other regions and/or countries, expanding their market without shouldering the entire financial load, and just concentrating on core business. This way, Big Pharma rakes in enormous profits from health.

Captive to Big Pharma

The Philippines, with its strict adherence to ‘global value chains’ in the name of development, is captive to Big Pharma’s dominance in both production and market. The country is the third largest pharmaceutical market in the ASEAN region after Indonesia and Thailand and remains dominated by Big Pharma, namely GlaxoSmithKline Philippines, Pfizer, Wyeth, Abbott Laboratories, Novartis, AstraZeneca, Sanofi-Aventis, Johnson & Johnson, Boehringer Ingelheim, Roche, Bristol-Myers Squibb, Bayer, Schering Plough, MSD, Servier Philippines, and Merck Inc. These pharmaceutical TNCs captured a combined share of 73% of the Philippine market, as of latest available data. Meanwhile, Unilab, the leading local pharma company, had only 25% market share.

The Philippines has become a manufacturing hub for Big Pharma by the country’s openness to foreign direct investments. This status is envisioned to be strengthened further by the government through the Ecozone Transformation Roadmap of the Philippine Development Plan 2023-2028. The roadmap has given the mandate to the Philippine Economic Zone Authority (PEZA) and Food and Drug Administration (FDA) to establish Pharmaceutical and Medical Device Ecozones (Pharma-Dev Zones) that will become specialized hubs to attract local and foreign investors involved in medical and drug manufacturing, including research and development (R&D) and clinical testing and trials.

At present, 14 of the big pharmaceutical TNCs have manufacturing facilities in the country. Foreign entities own up to 99% of the paid-up capital in pharma establishments that manufacture, import, and distribute medicines. Despite the continued government promotion of manufacturing hubs, the pharmaceutical manufacturing sector remains highly concentrated. The most recent and reliable estimates suggest there may be fewer than a hundred actual manufacturers, as many establishments are merely subsidiaries of major pharmaceutical companies. On the other hand, the country’s largest distributor of pharmaceuticals, Zuellig Pharma Corporation, is also a foreign-owned company and is being used by almost all pharmaceutical TNCs as their distributor.

Negating whatever benefits may be derived from being a “manufacturing hub”, the country imports 62% of all registered drugs for Philippine consumption and 100% of all the key raw materials for drug manufacturing and formulations. The only materials locally procured are packaging materials and sugar which is used as an additive in the formulations.

Finally, the local pharmaceutical market is also highly commercialized with 90% of the Php216 billion total market sales in 2024 going through retail outlets such as big drugstore chains owned by domestic economic oligarchs, and only 10% going through hospitals.

In 2023, Mercury Drug Corporation, the leading health and beauty chain in the country, generated a gross revenue of Php193.92 billion, placing it 6th overall on the list of Top 1000 corporations. The total sales of the local pharmaceutical market in the Philippines reached Php258.8 billion as of September 2023, indicating that Mercury Drug accounted for about 75% of the pharmaceutical retail sector’s revenues.

Killing hopes?

With such giant foreign and local monopolies of medicines, Filipino patients and the general populace pay super-high prices for medicines, which are marked up all along the supply chain for TNC super-profits.

The first mark-up occurs in the transaction between the pharmaceutical company’s head office and the Philippine office. Then, an imported drug accumulates add-on costs of at least 20% from the cost-insurance-freight price, due to import tariffs, finance charges, quality control testing fees, national corporate taxes, and transport costs. This monopolistic pricing structure does not yet account for the exorbitant retail mark-up that domestic oligarchs skim from the already expensive medicines.

About 90% of the population in low and middle-income countries, such as the Philippines, purchase medicines through out-of-pocket payments. The Philippines is one of the countries with the highest out-of-pocket health expenditures in the Asia-Pacific region, with out-of-pocket health expenditure comprising 44.4% of current health expenditure (CHE) in 2023. Spending on medicines comprised 31.8% of CHE.

Health issues and the achievement of SDGs cannot be dealt with without addressing the topic of medicine. It is hypocritical for the WHO to talk about “hopeful futures” while turning a blind eye to the deadly grip of Big Pharma. The Philippine government is complicit in perpetuating this debilitating domination by continuing to embrace neoliberalism at the expense of people’s health. There are no “healthy beginnings” for a government that continues to rely on foreign monopolies and simply allows Big Pharma and domestic oligarchs to make a killing out of the country’s backward conditions, in the process killing hopes for the establishment of a national pharmaceutical industry. ###