Legal basis and related mandates
- Republic Act (RA) No. 9502 (Universally Accessible Cheaper and Quality Medicines Act) mandates the Secretary of Health to establish an electronic price monitoring and regulation system for drugs and medicines.
- The EDPMS implementation is tied to the DOH’s prior system pilot through AO No. 2008-0014 and subsequent expansion through AO No. 2011-0012.
- Executive Order No. 821 sets Maximum Drug Retail Price (MDRP) as the ceiling prices for selected drugs and medicines in all retail outlets.
- Resolution No. 2009-001 of the Advisory Council for Price Regulation provides the basis for Government Mediated Access Price (GMAP) as a voluntary price reduction scheme.
- Administrative sanctions provisions are expressly linked to AO No. 2016-0009 and to the Chapter XIV sanctions framework under RA 9502 and its IRR.
Policy, purpose, and intended use
- The Order aims to implement EDPMS as a practical tool to address information asymmetry in medicine prices.
- The EDPMS is designed to empower patients and consumers to make intelligent choices when purchasing medicines from public and private retail outlets.
- The EDPMS is designed to provide the DOH with a vital reference for formulating pricing policies for essential medicines to ensure affordability and availability.
- The Order provides revised guidelines to improve system efficiency and effectiveness, making data gathering and data analysis more relevant and manageable.
- The EDPMS data undergoes analysis and random validation on a regular basis (quarterly).
Coverage and defined terms
- The Order applies to all bureaus in the DOH Central Offices, Attached Agencies, Regional Offices, Local Government Units, Government and Private Health Facilities, drug establishments, drug outlets, and other agency data beneficiaries subject to the compliance rules.
- The following terms are expressly defined for this Order:
- Drug Distributor Exporter: exports raw materials, active ingredients, and finished products for distribution to other drug establishments outside the country.
- Drug Distributor Importer: imports raw materials, active ingredients and/or finished products for wholesale distribution to other local FDA-licensed drug establishments.
- Drug Distributor Wholesaler: procures raw materials, active ingredients, and/or finished products from a local FDA-licensed drug establishment for local wholesale distribution.
- Drug Establishment: any entity engaged in manufacture, importation, exportation, sale, offer for sale, distribution, donation, transfer, use, testing, promotion, advertising, or sponsorship of drug products, including facilities and installations needed for its activities; includes sole proprietorships, partnerships, corporations, institutions, associations, or organizations.
- Drug Outlets: drugstores, pharmacies, or botica, including Hospital Pharmacy/Dispensary, where registered drugs and related pharmaceutical products are compounded and/or dispensed.
- Electronic Drug Price Monitoring System (EDPMS): a computer-based solution that captures, processes, stores, and generates reports on essential drug prices from drug companies, establishments, and outlets.
- Erroneous Submission of Data: incomplete and wrong or incorrect data submitted/uploaded to the EDPMS.
- Government Mediated Access Price (GMAP): voluntary price reduction of selected drugs and medicines pursuant to Resolution No. 2009-001.
- Manufacturer: establishments engaged in operations involved in production of drug products, with an explicit limitation that it does not apply to compounding and filling of prescriptions in drugstores and hospital pharmacies; allows a drug manufacturer to distribute/export its own drug products in wholesale and import raw materials for its own production.
- Manufacturer Trader: registered owner of a drug product that procures raw materials and packing components and provides production monographs and quality control standards, while subcontracting manufacturing to a licensed manufacturer.
- Maximum Drug Retail Price (MDRP): ceiling prices imposed for drugs and medicines sold in all retail outlets pursuant to Executive Order No. 821.
General guidelines on EDPMS data
- The medicines uploaded into the EDPMS are the selected medicines that address the leading causes of mortality and morbidity in the country.
- The medicines required to be uploaded include the medicines listed in the current Philippine National Formulary (PNF) and the PNF for Primary Health Care that the facility carries.
- Uploaded medicines must include drugs under the DOH mandatory and voluntary price reduction schemes, i.e., MRP & GMAP.
- The EDPMS provides essential medicine price information to patients and consumers to enable informed choices in purchasing from public and private retail outlets.
- The EDPMS provides government pricing information for developing pricing policies and guiding DOH program design and PhilHealth health benefit packages.
- Uploaded data is analyzed and randomly validated quarterly.
- Partnerships with research institutions, the academe, and other pertinent agencies and institutions are used for third party/external validation of EDPMS data and analysis.
- Blacklisted status due to consistent non-compliance with the uploading requirement cannot exceed one (1) year, and blacklisting is lifted upon compliance.
Uploading rules, schedules, and access
- Drug outlet upload frequency depends on branching:
- A drug outlet with only one (1) branch uploads selling prices and inventory once a year by geographical clustering:
- Metro Manila – January
- Luzon – April
- Visayas – July
- Mindanao – October
- A drug outlet with two (2) or more branches uploads selling prices and inventory quarterly.
- Hospital pharmacies in both public and private upload selling prices to patients and inventory quarterly.
- A drug outlet with only one (1) branch uploads selling prices and inventory once a year by geographical clustering:
- The “latest transaction per item” rule applies:
- Uploaded data must be the latest transaction per item recorded during the month before the uploading month (e.g., last transaction day of December, March, June, and September for January, April, July, and October uploads).
- Drug establishment uploading by type follows these rules:
- Manufacturers and Manufacturer Traders upload quarterly their selling price based on the largest volume.
- Toll manufacturers are exempt from uploading.
- Distributors, Importers, Exporter and Wholesalers upload quarterly their purchase price, selling price, and inventory data.
- The quarterly uploading months are January, April, July, and October.
- A Certificate of Compliance is required for drug establishments to participate in all government tendering activities for drugs and medicines.
- Public consumer access is limited:
- Price data made available to consumers and the public must be confined to the final selling prices in drug chains and retail outlets.
- System access and permissions are controlled as follows:
- Only the Secretary of Health and/or designated officials/employees and the Pharmaceutical Division have full unrestricted access and full price monitoring functions.
- The Pharmaceutical Division defines authorized users, access levels, and permission rights; reviews and approves requests to access the system and/or data.
- The Pharmaceutical Division issues unique user names and passwords to each drug establishment and outlet.
- Access and rights are granted to:
- Philhealth for verification/checking submitted medicine prices for reimbursement and for other purposes.
- Procuring entities (Procurement Service, ROs, Hospitals, and Committees on Bids and Award) to check current medicine prices.
- DOH Management (Executive Committee, Directors and Program Managers, and personnel of concerned offices including FDA).
- Requests by other agencies/offices/units/departments/organizations for access must be reviewed by the Pharmaceutical Division, which assigns appropriate access levels and rights.
- Certificate issuance:
- Certificate of Compliance is issued by the Pharmaceutical Division and by Regional Offices to drug establishment and outlet owners that wish to participate in government bidding.
- Monitoring structure and activities:
- A monitoring team composed of personnel from PD, KMITS, and ROs assesses compliance and system performance.
- The PD, KMITS, ROs, and FDA are authorized to conduct monitoring regularly or when needed through spot monitoring/checking.
- An Annual Program Implementation Review is conducted with stakeholders to review EDPMS implementation, issues, and future directions.
- Source of funds:
- Sub-allotment of funds to ROs augments regional resources for EDPMS training, monitoring, and related activities, with source of funds incorporated in local health system development.
Roles and responsibilities of agencies
- The Pharmaceutical Division (PD) serves as system owner and overall lead and must:
- Provide directions and guidance on managing EDPMS implementation.
- Recommend policies, procedures, and guidelines for data collection, reporting, processing, analysis, and dissemination.
- Require drug establishments and outlets to use the EDPMS software for uploading data to the DOH-Pharmaceutical Division and other automated tools/software supporting medicine price monitoring and regulation.
- Grant user names and passwords only to authorized users.
- Conduct orientations and trainings on system use/operation and provide funds needed to maintain and implement the system (including system development and maintenance and costs of meetings, workshops, conferences, symposium, and other related activities).
- Review price information reports, analyze data for pharmaceutical pricing policy guidance, and review complaints/reports of violations submitted by ROs and the general public.
- Act on reported violations and identify establishments/outlets for investigation in coordination with Regional Offices, Office for Regulations (OHR), FDA, and DOH-Legal Service.
- Issue Certificates of Compliance upon request and issue Unified Pricing Certification for drug establishments and branches/outlets with the same selling prices.
- Monitor and evaluate EDPMS implementation using reports from ROs and KMITS.
- The Food and Drug Administration (FDA) must:
- Investigate and, when necessary, prosecute, hear, and decide on administrative cases, imposing administrative fines and penalties against drug establishments and outlets violating this Order; appeals of decisions and sanctions are filed with the Secretary of Health.
- Validate submitted reports of violations reported by the FDA Regional Office and impose sanctions under the Chapter VIII administrative sanctions framework of AO No. 2016-0009.
- Suspend/Revoke the License-to-Operate (LTO) and impose other appropriate sanctions upon proof of repeated violations.
- Through the FDA Regional Office:
- Issue a written warning to non-complying facilities based on the list submitted by DOH-Regional Office.
- Submit the list of non-complying facilities to FDA Central Office, Alabang, Muntinlupa City for possible imposition of administrative sanctions after due process.
- The Bids and Awards Committees (BAC) of the DOH and its ROs must require a Certificate of Compliance from all suppliers participating in government tendering and other procurement modes for medicines.
- PITC Pharma Inc. (PPI) must require a Certificate of Compliance from all suppliers participating in government tendering and other procurement modes for medicines.
- The DOH-Regional Offices must:
- Issue Certificates of Compliance signed by the RO Director to drug establishments interested in government biddings within their jurisdiction.
- Through the Regional Drug Price Monitoring Officer (RDPMO):
- Generate and submit compliance reports to the DOH Regional Office and the Pharmaceutical Division.
- Orient and train drug establishments and outlets on how to operate the software.
- Monitor and evaluate system implementation.
- Validate requests for user names/passwords and endorse them to PD for issuance.
- Prepare/generate quarterly reports of non-complying outlets and establishments for submission to the NDP compliance officer.
- Randomly monitor compliance and other violations under AO 2016-0009.
- Through the National Drug Policy Compliance Officer (NDCPO):
- Assess and review quarterly reports of non-complying outlets and establishments submitted by RDPMO.
- Prepare endorsement letters to the FDA Regional Office (signed by Regional Director) for warning and/or Notice and/or Report of Violation.
- Submit lists of non-complying facilities to FDA Regional Office for appropriate action.
- KMITS must provide technical support for software maintenance, implementation, deployment, and operations, including software enhancement, troubleshooting, debugging, database backup and recovery, network administration, and database administration; and must train trainers and system administrators, monitor system operations/performance, and generate EDPMS implementation reports.
- The Office for Health Regulation must:
- Develop mechanisms to ensure RO implementation of EDPMS-related policies and plans.
- Resolve issues elevated to the Cluster on EDPMS.
- Support technical assistance packages to enhance capacity of ROs and regional partners to assist local government units in EDPMS, in coordination with concerned clusters/technical units.
- Drug establishments and outlets covered by EDPMS must:
- Strictly comply with standard operating procedures for uploading/submitting EDPMS reports.
- Attend trainings, workshops, meetings, or conferences related to system implementation.
- Register authorized personnel with PD and RO.
- Report issues, concerns, or problems in implementation to PD and RO.
Administrative sanctions and penalties
- Administrative sanctions apply to erroneous submission or failure to submit required data by drug establishments, hospital pharmacies, drug outlets, and non-traditional drug outlets required by the DOH, without justifiable reason.
- If erroneous submission or failure to submit electronic data constitutes illegal acts of price manipulation, the penalty under RA 7581 or RA 9502 and applicable implementing rules and regulations governs.
- FDA sanctions for violations are imposed as follows (as stated in RA 9502, IRR, Chapter XIV):
- 1st violation: Written Warning.
- 2nd violation: administrative fine of minimum of Ten Thousand (P10,000.00) to Fifty Thousand (P50,000.00) Pesos, depending on gravity and extent, including recall of the product when applicable.
- 3rd violation: administrative fine of minimum of Sixty Thousand (P60,000.00) to One Hundred Fifty Thousand (P150.000.00) Pesos, depending on gravity and extend of violation, with recall of the product and suspension of the Certificate of Product registration (CPR) when applicable.
- 4th violation: administrative fine of minimum of Two Hundred Thousand (P200,000.00) to Five Hundred Thousand (P500,000.00) Pesos, with recall when applicable, recall of violator’s License to Import and Distribute when applicable, including blacklisting of the drug establishment or drug outlet, and advice to the Government Procurement Policy Board (GPPB) and the Department of Trade and Industry (DTI).
- 5th and succeeding violations: administrative fine of One Million (P1,000,000.00) Pesos, with recall when applicable, recall of violator’s License to Import and Distribute when applicable, including blacklisting of the drug establishment or drug outlet, and advice to the GPPB and DTI.
- An additional penalty of Two Thousand Five Hundred (P2,500.00) Pesos per day is imposed if the violation continues every day after receipt of the DOH or other appropriate body’s order notifying and penalizing the offending person or company.
- The Secretary of Health may also impose suspension or revocation of the License to Operate of drug establishments and outlets in addition to the administrative fine.
- In case of suspension of the License to Operate, the duration does not exceed one (1) year.
- Rule 78 of the IRR of RA 9502 provides that all fees collected, charges imposed, and administrative fines accruing as a consequence of implementing this Administrative Order are for the account and income of FDA.
- If a facility is blacklisted due to continuous non-compliance with EDPMS uploading, the blacklisting status is lifted only if the facility complies with EDPMS uploading for one (1) year after blacklisting.
Repeal, separability, and effectivity
- AO No. 2016-0009 dated March 28, 2016 and other provisions of previous issuances inconsistent with Administrative Order No. 2018-00020 are repealed, amended, and modified accordingly.
- If any provision of the Order is declared invalid by any court of law or competent authority, the remaining provisions stay valid and effective.
- The Order becomes effective fifteen (15) days after publication in the Official Gazette and a newspaper of general circulation.