SENIOR citizens started to enjoy the full 20 percent discount on medicine and other products and services in July 2010 with the signing of the implementing rules and regulations (IRR) of the Expanded Senior Citizens Act of 2010. The IRR exempts senior citizens from the 12 percent value-added tax (VAT), effectively allowing them a full 20 percent discount on purchases.
Now, not only the seniors but also the general public is about to reap the benefits of VAT-free medicine, or at least certain medicines for particular diseases.
Earlier, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 17, series of 2024, containing the list of additional medicines to be covered by VAT exemption as provided by Republic Act 10963 or the Tax Reform for Acceleration and Inclusion Act.
‘Government intervention in the setting of retail prices of medicine is one thing, but implementation–which is left in the hands of private drugstores–is another.’
The BIR revised the list of over 2,000 VAT-exempt medicines, adding 22 more drugs. These pharmaceutical items are intended for the prevention and management of diabetes, hypertension, cancer, high cholesterol, mental illnesses, tuberculosis, and kidney diseases, as well as medicines and medical devices specifically used for the prevention and treatment of COVID-19.
This move by the Bureau of Internal Revenue is a game changer for Filipinos, many of whom are barely making enough to maintain their normal healthy lives without having to contend with the high cost of medical care. But when a health emergency occurs, many Filipino families are left without a choice but to go deeper into debt. So here, government intervention such as expanding the list of VAT-free drugs is always a welcome development.
For the guidance of the public, the BIR released the batch of medicines added to the list which are exempted from VAT. These are sonidegib capsule (200 mg), pemetrexed capsule(100mg), asciminib tablet (20 and 40mg), palbociclib tablet (75, 100 and 125mg), pemetrexed (as disodium hemipentahydrite), cabazitaxel (60mg/1.5ml concentrate for injection), and entrectinib capsule (100mg and 200mg), all for cancer.
Also exempted are losartan potassium+amlodipine (in 10mg, 100mg and 5mg tablets), as well as irbesartan+amlodipine (as besilate) in 300 mg/5 mg, and 300mg/10mg tablets. These two drugs are taken by individuals with hypertension problems. For mental illness, cariprazine (as hydrochloride) in 1.5mg, 3 mg, 4.5mg and 6mg capsules are also free from VAT coverage.
Government intervention in the setting of retail prices of medicine is one thing, but implementation–which is left in the hands of private drugstores–is another. In bigger establishments, they have printed the complete list of VAT-free drugs for the public to see, but, likely, the smaller stores are not even aware of this new rule.
Thus, Sen. Sherwin Gatchalian has urged drugstores and other retailers of pharmaceuticals in the country to immediately implement the exemption from the coverage of the Value Added Tax of some medicines for cancer, hypertension and other illnesses. The senator said such a move would be of great benefit to the public, especially those who are suffering from these ailments.
While we are at it, the Marcos administration should also look into the possibility of lowering the prices of common medicines, an objective that even Republic Act 9502 or the Cheaper Medicines Law enacted in June 2008 has failed to do.
Two previous studies using the methodology of the World Health Organization and the Health Action International (HAI) surveyed the medicine prices and availability across the country. These studies have documented the poor availability and the exorbitant prices of medicine in the Philippines compared to international reference prices. In one study, the overall price of the surveyed medicines in both the public and the private sector were about 18 times the international reference prices for originator brands and 7 times for lowest-priced generics.
The Department of Health, the Department of Trade and Industry and the local government units (LGUs) through devolution of health services should be working as a team in ensuring that the general population receives adequate health services, including the monitoring of prices of drugs and health care equipment.
Health care is one of the principal public services in the people’s social contract with the government, and authorities running the government have an important task to do, which is to ensure that every aspect of the health sector is running smoothly.
