Philippines Sector Brief – Pharmaceuticals

I. Quick Facts
• The sector is projected to grow by 4.5% annually over the next five years reaching P164 billion in 2018 from P146 billion in 2014
• The pharmaceutical manufacturing sector (defined as pharmaceuticals, medicinal chemicals, and botanical products) ranked in the top 22% of the 240 sectors in the Philippines when measured by total output
• In 2013, the sector generated a little over USD 3 billion (EUR 2,2 billion) in revenues making the Philippine Pharma market the 3rd largest in ASEAN region, just after Thailand and Indonesia
• Spending has been increasing hand in hand with GDP. In 2001 average Filipino spent $29 (£20) per year on healthcare. By 2011, that number had increased to $97 (£68).
• Manufacturing of foreign drugs is almost exclusively subcontracted to one local manufacturer, InterPhil Laboratories catering to15 out of the 20 biggest healthcare companies
• 85% of pharma products’ distribution is controlled by Zuellig Pharma and Metro Drug
• Generics account for 65% of the total pharmaceutical market, with an annual growth of 6% since 2010

II. Business Opportunities
• The size of the Pharma market is expected to reach up to USD 8 billion (£ 6 billion) by 2020, with CAGR of 9,4%
• Increasing demand and consumption from the public sector with the government as the leading buyer of pharma products for distribution to the general public through health programs/ services
(i.e. PhilHealth)

III. Key Players
• GlaxoSmithKline (GSK)
• Pfizer
• Novartis
• Merck & Co.
• Sanofil
• AstraZeneca
• Johnson & Johnson
• Ell Lilly & Co.
• Abbott Laboratories
• Bristol-Myers Squibb

IV. Challenges
• Growing sector of generic drugs which could pose a challenge to foreign companies’ branded products
• Government act on pricing which obligated pharma companies to reduce their prices by up to 50% on 21 different molecules. This led to negative growth for some foreign companies, while those with a right portfolio continued to grow
• Scarce knowledge of Filipinos on health aspects resulting to their unwillingness to pay for the healthcare and medication. Insurance penetration remains low
• Slow turnaround time in obtaining Food and Drug Administration approval on new pharma products. Due to FDA understaffing, it takes six times longer than before to get FDA approval

V. Trends
• Generics medicines will continue to account for an increasing share of pharmaceutical sales in the Philippines
• With the growing population (103M), demand for pharma products will continue to increase

Sources: BMI Research, EU Business Advocacy Papers, Philippine Statistics Authority

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Sectors: Biotechnology & Pharmaceuticals and Healthcare & Medical
Countries: Philippines
Topics: Market Research
Export Action Plan