The Firm flourished under the Ramos administration, thanks to the political and business savvy of founding partner Antonio Carpio. During the short reign of deposed President Estrada, Carpio kept a low profile as a private practitioner and respected opposition figure. Soon after President Arroyo assumed the presidency in 2001, Carpio was appointed to the Supreme Court.

In the meantime, the Firm forged a strong relationship with the First Gentleman and long-time landlord, Atty. Mike Arroyo. The First Dude, as head of the presidential family and steward of the Arroyo interests, recognized the undeniable legal abilities of the thier tenants. The partnership between the Firm and the First Dude was further cemented by social and personal ties, including the Firm partners standing as wedding sponsors to the children of the presidential couple. The senior partners also served the Arroyo government in various capacities, notably Simeon Marcelo as Ombudsman and Avelino Cruz as Presidential Legal Counsel.

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Today’s issue of the Philippine Daily Inquirer (28 October 2006) screams in its headline that: “Its Palace vs. The Firm”. Quoting an unnamed highly-placed source from Malacanang, President Arroyo is apparently very displeased with her most trusted legal advisers. This has reference to the law office of Villaraza and Angangco, otherwise known as “the Firm”, its fortunes being “inextricably linked to the President and her husband” according to the Inquirer.

Madame Arroyo reportedly feels betrayed by the outcome of the recent Surpreme Court ruling on charter change. The SC, by a majority of one, shot down the initiative to amend the Philippine constitution by a people’s initiative, calling the palace-backed move fraudulent and deceptive. The majority decision was written by Justice Antonio T. Carpio, a founding partner of the Firm and an Arroyo appointee. The decision has been described as “caustic” and “stinging”. Undoubtedly, it is a slap to the face of the Arroyo administration.

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A major reason for the high cost of pharmaceuticals in the Philippines is the nature of the prevailing business environment. In the words of Roberto Pagdanganan, the head of the government trading arm, the PITC, there is a “cartelized system” of marketing and distribution. There exists a Philippine drug industry “cartel” which controls supply and sets pricing. Such pricing has little or no relation to the actual cost of production and retailing and is determined solely by what the cartel believes the market can take. The result ? Drug prices that are probably the highest in the world in relation to per capita income. For example, a 500 mg. tablet of Ponstan, a painkiller manufactured by Pfizer, costs US$0.45 in Philippines while the very same item costs only US$0.06 in India, a nearly 800% differential.

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Senator Mar Roxas has introduced a bill which would allow parallel importation, where the government would buy cheaper medicines abroad and sell them locally at prices that were substantially lower than those pegged by foreign pharmaceutical firms like Pfizer. The Roxas bill will also allow “early working” or the testing of branded drugs whose patents are about the expire in preparation for the production of generic counterparts. It was precisely the early working of the drug Norvase, which patent will expire in June 2007, that led Pfizer to file suit against Philippine regulatory and trade agencies for alleged patent infringement.

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Other multinational drug companies are anticipating the outcome of the case filed by Pfizer against Philippine regulatory and trading agencies for alleged patent infringement. This was effectively become a test case for the drug industry to challenge the early working of patents about to expire. Even if Pfizer’s suit does not prosper, it has managed to sidetrack the efforts of the Philippine authorities to introduce cheaper alternatives to the branded medicines now dominating the market.

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