Pharmaceutical company under investigation in the Senate denies accusations of 'pyramid'

MANILA, Philippines – A Philippine-owned drug distributor on Saturday rejected allegations that it recruited doctors in a “pyramid scheme” to prescribe its medicines to its patients in exchange for huge commissions, including expensive cars and other luxury items.

In an emailed statement to the Inquirer, Bell-Kenz Pharma Inc. described the allegations as “misinformed and unfounded” and that the company was willing to face separate investigations by the Senate and the Department of Health (DOH).

READ: DOH will investigate documents and pharmaceutical company over marketing scheme

Senator JV Ejercito introduced a resolution on Thursday seeking a legislative inquiry after a group of patients, doctors and employees of other pharmaceutical companies informed him about Bell-Kenz's alleged questionable business practices.

Senator Christopher “Bong” Go, chairman of the Senate health and demographics committee, immediately scheduled the first hearing on the matter for April 30.

Assistant Secretary of Health Albert Domingo said the DOH and the Food and Drug Administration have already tasked a team to look into complaints against the pharmaceutical company and its affiliated doctors.

“Bell-Kenz Pharma Inc. strongly denies the misinformed and unsubstantiated allegations leveled against our company,” the company said in response to the Inquirer’s request for comment on the allegations.

“Our commitment to rectifying these allegations in the right forums underscores our unwavering dedication to preserving the integrity of our company’s reputation,” he said.

'Whistleblowers'

The company, he added, was dedicated to its mission of providing “cost-effective medicines” to help ensure “equitable access to high-quality healthcare for all.”

“Since our inception, Bell-Kenz has been steadfast in our commitment to serve all Filipinos,” he said. “Maintaining the ethical standards of the local healthcare industry is critical to us, and we wholeheartedly endorse efforts aimed at upholding the sanctity of the medical healthcare system.”

The pharmaceutical company, however, did not respond directly to allegations that its shareholders were doctors who advised their patients to take the medicines that Bell-Kenz imported.

The allegations were first made in a Reddit post in 2022 by a person who claimed to be a former employee of the company and reposted by public health advocate Dr. Tony Leachon on his X account early last week.

According to Ejercito, a group of “whistleblowers” ​​told him that the company was involved in a type of “pyramid or networking” scheme, in which physician-shareholders recruit other doctors to invest in the company and prescribe its products, mainly for style of life. diseases such as diabetes, hypertension and cardiovascular problems.

Doctors, he said, would then receive substantial “discounts” or commissions that included sports cars, luxury watches, foreign trips and other gifts.

Ejercito said such a marketing system undermined the intentions of the Universal Healthcare Act (UHC), which he authored, to help reduce Filipinos' medical expenses.

Violation of ethical standards

“We passed the universal health coverage law because we wanted to reduce the cost of medical expenses. If there are doctors prescribing medicines that you don’t really need, it would only increase the expenses of Filipinos,” he said.

“There really is a clear violation of ethical standards,” Ejercito said, citing doctors who sell their own company’s drugs. “This is clearly a conflict of interest.”

In the annual financial report filed with the Securities and Exchange Commission on April 3, 2023, Bell-Kenz reported a gross revenue of over P6.8 billion and a net profit of nearly P312 million in 2022. A year earlier, it reported a revenue gross profit of more than P5.6 billion and a net profit of almost P245 million.

A check by the Inquirer shows that the company's president and CEO Luis Raymond T. Go and chief financial officer Jaime F. Cayetano Jr., who signed the financial report, are cardiologists at the state-owned Philippine Heart Center (PHC) in Quezon. City.

Bell-Kenz's headquarters are directly behind the PHC complex and East Avenue Medical Center.