FDA okays VAT exemption of 22 more vital drugs
Twenty-two more medicines for different diseases have been endorsed by the Food and Drug Administration (FDA) for exemption from the value-added tax (VAT) to make them more accessible to consumers.
Under FDA Advisory No. 2024-0329, signed by Director General Samuel Zacate, the regulatory body endorsed to the Bureau of Internal Revenue (BIR) the inclusion of 14 drugs for cancer, four drugs for hypertension and four drugs for mental illness in the list of medicines exempt from the 12-percent VAT.
The advisory was dated Feb. 15, but was released on FDA’s website only on Monday.
The cancer medicines to be exempted from VAT were Sonidegib (as phosphate) 200 milligram (mg) capsule; Pemetrexed (as disodium heptahydrate) 100 mg powder; Asciminib (as hydrochloride) in both 20 mg and 40 mg tablets; Palbociclib in 75 mg, 100 mg and 125 mg tablets; Pemetrexed (as disodium hemipentahydrate) 100 mg powder for infusion and 10 mg/mL solution for injection; Cabazitaxel 60 mg/1.5 mL concentrate for solution for injection; and Entrectinib 100 mg and 200 mg capsules.
For hypertension, the medicines were Losartan Potassium+Amlodipine (as besilate) in 100 mg/10 mg and 100 mg/5 mg tablets, and Irbesartan+Amlodipine (as besilate) in 300 mg/5 mg and 300 mg/10 mg tablets.
The FDA also endorsed Cariprazine (as hydrochloride) in 1.5 mg, 3 mg, 4.5 mg and 6 mg capsules to be VAT-free. Cariprazine is currently used to treat schizophrenia, and manic or mixed episodes and depressive episodes associated with bipolar disorder.
The VAT exemption of these medicines took effect on Feb. 19.
As an example on the effect of the VAT exemption, a piece of a film-coated tablet of a certain brand of Losartan Potassium+Amlodipine (as besilate) 100 mg/5 mg, which is used to treat mild to moderate hypertension by effectively lowering blood pressure, is currently being sold by a popular drugstore chain at P30.75, inclusive of VAT.
Now VAT-free, its price will go down by 10.7 percent to P27.45.
Senior citizens and persons with disabilities who are entitled to an additional 20-percent discount under the law can buy the same drug at an even lower price of P21.96—or 28.6 percent lower than its original retail price of P30.75.
The 22 medicines are in addition to the more than 2,000 drugs indicated 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, that were exempted from VAT under Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion or Train Act, and RA 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
Under RA 11534, the Department of Health and the FDA will identify the specific medicines to be included in the List of VAT-Exempt Health Products that is eventually transmitted to the BIR.
Zacate had endorsed the 22 new drugs under the latest FDA advisory through a letter dated Feb. 5 to Internal Revenue Commissioner Romeo Lumagui Jr.
The effectivity of the VAT exemption of the covered medicines and medical devices under the CREATE Act will be on the date when the FDA publishes the updated list, which can be accessed at https://verification.fda.gov.ph.
Quarterly updates
According to the website of the FDA, as of Feb. 19, the total number of health products exempted from VAT now include 538 for medicines for hypertension, 653 for cancer, 288 for mental illness, 74 for tuberculosis, 151 for kidney disease, 298 for diabetes, 159 for high cholesterol, 60 medical devices directly used for COVID-19 treatment, and 350 drugs and vaccines prescribed and directly used for COVID-19 treatment.
Under the law, the FDA must provide an updated list 30 days prior to the beginning of every quarter. As such, the FDA should publish an updated list of VAT-exempt medicines within the months of February, May, August and November of every year.
Just last month, the BIR released on Jan. 26 Revenue Memorandum Circular No. 17-2024 exempting 21 medicines from VAT based on FDA Advisory No. 2024-006 dated Jan. 2. FDA’s endorsement letter to the BIR for the previous batch was dated Nov. 29, 2023.
Health Secretary Teodoro Herbosa welcomed this addition of the new medicines to the VAT-exempted list as it would lower the prices of these essential drugs.
“One of the things I want to achieve is to make medicines more accessible and cheaper, so more sick people can avail themselves of these lifesaving drugs. It will also mean more people will be provided with these drugs with the budget allocated to the Department of Health,” he said. “It will be a big help to everyone.”
According to Lumagui, the BIR under his watch would take steps and issue circulars “that would make the lives of Filipinos financially easier.”
“Updating the list of VAT-exempt medicines is part of taxpayer service. We will update taxpayers as soon as possible of exemptions given to them by existing laws,” he said. —WITH A REPORT FROM INQUIRER RESEARCH
