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Rules on Price freeze of medicines during disasters

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The Department of Health (DOH) recently issued the guidelines for price freeze of medicines during disasters and emergencies.This is pursuant to Republic Act no. 7581 or “An Act Providing protection to Consumers by Stabilizing the Prices of Basic Necessities and Price Commodities and by Prescribing Measures Against undue Price Increases during Emergency Situation and like Situations”.

The new guidelines under DOH Administrative Order no. 2014-0001 dated January 1, 2014 was issued to guide consumers, hospitals, private and public drug outlets, other health care facilities and other government entities on the ethical prices of medicines during states of national calamities and emergencies.

Under the nine-point implementing guidelines, upon declaration of state of calamity by the President,

all public and private drug retail outlets including hospital pharmacies shall implement the price freeze or the maximum ceiling price set by DOH for essential medicines. The price regulatory measures may be implemented nationally or only in calamity-stricken areas.

To monitor and set the reference prices for essential medicines, all public and private drug outlets shall submit to DOH their prevailing prices in order to determine the maximum ceiling price of medicines as deemed necessary.

Specifically, all government entities procuring essential medicines during emergency shall observe the Drug Price Reference Index set by the DOH as ceiling for all modes of procurement, such as public bidding, direct contracting, negotiated procurement and shopping.

Also, the DOH shall develop a monitoring tool necessary for the implementation of price regulatory measures and shall publish the list and prices of medicines through .various means.

Finally, the DOH, Department of Trade and Industry (DTI) and other government agencies shall monitor  the prices of medicines throughout the duration of state of calamity.

Violation of the guidelines shall result to sanctions and penalties stated in section 16 of RA no. 7581, as follows:

Sec. 16. Penalty for Violation of Price Ceiling. – Any person who violates Section 6 or 7 of this Act shall suffer the penalty of imprisonment for a period of not less than one (1) year nor more than ten (10) years of a fine of note less than Five thousand pesos (P5,000) nor more than One million pesos (P1,000,000), or both, at the discretion of the court.

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