Pooled procurement to secure the country’s medicine supply

As global supply chains stretch across continents, the Philippines remains exposed to disruptions in key transit regions, particularly those affected by the ongoing Middle East conflict. These corridors are not only central to global energy flows but also to the movement of essential goods, including medicines. When instability strikes, the ripple effects are immediate. These could be procurement delays, rising costs, and if left unaddressed, reduced patient access.

The Pharmaceutical and Healthcare Association of the Philippines (PHAP) recognizes the potential impact of these geopolitical tensions on the availability and affordability of essential medicines. At present, member companies continue to absorb increased costs driven by higher freight rates, logistics constraints, and global market pressures. This quiet buffering role has helped maintain stability in supply and protect patients from immediate disruption.

But this stability is inherently fragile.

Pharmaceutical manufacturing operates on long lead times, often 12 to 24 months, particularly for complex biologics. What appears stable today reflects decisions and production cycles set in motion well before the current crisis. Short-term cost absorption cannot substitute for long-term resilience.

To safeguard uninterrupted access to medicines, the country must move decisively toward more coordinated and strategic supply chain solutions. Central to this is stronger public-private collaboration, anchored in mechanisms that are already available and aligned with the country’s Universal Health Care (UHC) framework.

One such mechanism is pooled procurement.

By consolidating medicine requirements across procuring entities, pooled procurement enables the country to purchase at scale, strengthening negotiating power, improving pricing efficiency, and enhancing supply security. It reduces fragmentation, minimizes competition for limited global supply, and allows the Philippines to engage manufacturers from a position of predictability and volume.

Global experience, particularly during the COVID-19 pandemic, underscores this advantage. Countries that demonstrated accurate demand forecasts and firm procurement commitments were prioritized in global allocation. Manufacturers are more able to allocate supply to markets that offer visibility in demand, sustainability in pricing, and consistency in regulatory processes.

For pooled procurement to work effectively, however, it must be anchored in a comprehensive national demand forecast. This forecast should integrate requirements from both the public and private sectors, providing a unified and forward-looking picture of the country’s needs. It must be supported by a clearly defined list of priority medicines based on national health requirements, alongside firm procurement timelines and delivery schedules.

Equally important is policy and regulatory alignment. An inter-agency approach across health, procurement, finance, and regulatory bodies is essential to ensure that systems work in concert. Streamlined and responsive regulatory processes will facilitate timely product availability, enabling procurement plans to translate more efficiently into actual supply on the ground.

Preparedness must also extend beyond procurement. Maintaining a national inventory buffer of up to six months for essential medicines would provide a critical safeguard against supply disruptions. Such a buffer allows the health system to absorb shocks, manage delays, and prevent sudden shortages. The window for action, however, is finite. Measures must be taken while global supply remains accessible, trade routes are open, and pricing conditions have not yet further escalated.

Operational readiness is equally vital. Prioritizing pharmaceutical shipments through green lanes at ports can reduce delays and ease congestion. Expanding cold-chain and storage capacity ensures that temperature-sensitive medicines remain viable even as transit times lengthen. Securing fuel allocation for pharmaceutical distribution further protects last-mile delivery, particularly important in an archipelagic country where logistics are inherently complex.

Targeted financial measures can also help mitigate the impact of global volatility. Temporary tax relief or subsidies may support companies facing elevated logistics and operating costs, while expanded value-added tax exemptions can directly ease the burden on patients. These interventions, when carefully designed, can provide critical stability during periods of disruption.

The COVID-19 pandemic demonstrated both the fragility of global supply chains and the power of coordinated action. It showed that with accurate forecasting, early procurement, and strong collaboration, even unprecedented challenges can be managed. It also revealed the costs of delay and fragmentation.

Today’s geopolitical uncertainties present a similar test. The risks are real but they remain manageable, provided that decisive, coordinated action is taken now.

Pooled procurement offers a practical and strategic pathway to strengthen the country’s resilience. By aligning demand, leveraging scale, and fostering collaboration across sectors, it can help ensure that essential medicines and vaccines remain available and accessible to all Filipinos.

PHAP stands ready to work closely with government, healthcare stakeholders, and patient groups to support these efforts and help secure a stable and responsive medicine supply system for the country.

Teodoro B. Padilla is the executive director of Pharmaceutical and Healthcare Association of the Philippines, which represents the biopharmaceutical medicines and vaccines industry in the country. Its members are at the forefront of developing, investing and delivering innovative medicines, vaccines, and diagnostics for Filipinos to live healthier and more productive lives.