The Philippine Economic Zone Authority (PEZA) and the Food and Drug Administration (FDA) have embarked on collaborative efforts with the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) to enhance the nation's pharmaceutical landscape. 

This initiative aims to strengthen the country's drug and medical device manufacturing sectors through the establishment of pharmaceutical economic zones.

In a recent news forum, PEZA Director General Tereso Panga and FDA Director General Dr. Samuel Zacate revealed plans for these specialized zones. The discussion follows a meeting between the two agencies and representatives from OSAPIEA, including Asec. Kristine Joy Diaz-Teston, held in continuation of a sectoral meeting with the President in February 2024.

President's Vision and Objectives

The envisioned pharmaceutical economic zones are part of the President's strategy to streamline the drug application process, facilitating accessibility and efficiency for stakeholders. This endeavor seeks to stimulate local producers' research and development (R&D) and manufacturing capabilities, ultimately driving down drug costs for the public.

According to Director General Panga, the pharmaceutical economic zone initiative adopts a dual approach, targeting both pharmaceutical and medical device manufacturing, as well as related activities such as research, development, clinical testing, and trials.

Partnerships and Policy Enhancements

The collaborative efforts between PEZA, FDA, and OSAPIEA aim to improve the ease of doing business for domestic and export-oriented drug and medical device manufacturers. Strategic discussions center on addressing non-tariff barriers, particularly in permitting and licensing processes.

One key aspect of the partnership involves updating the PEZA-FDA Memorandum of Agreement, established in 2014, to expedite licensing and registration for prospective and existing PEZA Registered Business Enterprises (RBEs). FDA Director General Zacate emphasized the importance of refining policies to address concerns raised by industry players and enhance the local drug supply, potentially reducing costs to levels comparable to those in countries like India.

Furthermore, the collaboration aligns with the Department of Trade and Industry's (DTI) efforts, led by Trade Secretary & PEZA Board Chairman Alfredo Pascual, to combat counterfeit drugs and protect consumers.

International Models and Incentives

Discussions explored models of pharmaceutical economic zones in ASEAN countries, considering potential adaptations for the Philippines. Proposed locations for the inaugural zone were discussed, taking into account industry concentration and the FDA's plans for laboratory establishments.

Under the CREATE Law, pharmaceutical-related activities are classified as Tier II, entitling companies to significant tax incentives. PEZA Chief Panga highlighted additional incentives available within the ecozones, attracting investors seeking an optimal business environment.

Future Prospects

Expressing gratitude for the support from OSAPIEA and FDA, Director General Panga emphasized the importance of collaboration for businesses engaged in medical device manufacturing and pharmaceutical production. 

"We are thankful to the OSAPIEA and the FDA for the support that they are extending to our existing and would-be RBEs, especially those who are engaged in medical devices manufacturing and looking to set up their drug manufacturing—whether it be for human or animal—here in the Philippines. With this dynamic partnership, the steering group is confident that the country will see the establishment of its first true pharmaceutical economic zone during this administration and signal to global pharmaceutical industry players that we are open to doing business with them, on top of our already-competitive fiscal incentives," said Panga.

As of December 2023, PEZA hosts 26 operating companies in pharmaceutical and medical equipment manufacturing, generating substantial investments and employment opportunities. Talks are underway with leading Filipino companies and logistics service providers to further strengthen the proposed pharmaceutical ecosystem.