Discounts FOR THE Disabled Upholding Equal Access TO Medicines Under Police Power

In a 2016 ruling, the Supreme Court affirmed the constitutionality of the mandatory twenty percent (20%) discount on medicine purchases for persons with disability (PWDs). The decision in Drugstores Association of the Philippines, Inc. v. National Council on Disability Affairs (G.R. No. 194561) settled a key constitutional question: whether the discount is a valid exercise of police power or an unlawful taking of private property requiring just compensation. The ruling has direct implications for drugstores and other establishments covered by the law.

The Legal Challenge

The petitioners, the Drugstores Association of the Philippines, Inc. and Northern Luzon Drug Corporation, sought to nullify Section 32 of Republic Act No. 7277, as amended by R.A. No. 9442 (the Magna Carta for Persons with Disability). They also challenged the implementing rules issued by the National Council on Disability Affairs (NCDA), the Department of Health (DOH), and the Department of Finance (DOF).

The drugstores argued that the mandatory discount was an invalid exercise of eminent domain because it forced them to bear the cost of the discount without just compensation. They also claimed the law violated due process and equal protection by singling out drugstores to carry the burden.

The Court's Ruling

The Supreme Court denied the petition and upheld the law. The Court ruled that the PWD discount is a legitimate exercise of police power, not eminent domain. Police power is the state's authority to regulate liberty and property to promote public welfare. In contrast, eminent domain involves the taking of private property for public use upon payment of just compensation.

The Court applied by analogy its earlier ruling in Carlos Superdrug Corporation v. DSWD, which upheld the similar 20% senior citizen discount. The Court reasoned that the PWD discount promotes the constitutional policy of making essential goods and health services available to all at affordable cost. It also supports the integration of PWDs into mainstream society, a declared state policy under the Constitution.

Why the Discount Is Not a Taking

The Court explained that the discount is not an arbitrary confiscation of property. The means employed—requiring private establishments to grant the discount—are reasonably necessary to achieve the law's purpose. Notably, the law provides a form of reimbursement: establishments may claim the discount as a tax deduction from their gross income, as implemented under DOF Revenue Regulations No. 1-2009.

The Court also rejected the due process challenge. It found that the law and its implementing rules provide sufficient safeguards. Under NCDA Administrative Order No. 1, a PWD identification card is issued only after the applicant secures a medical certificate from a licensed physician, except for apparent disabilities where a school assessment or certificate from an employer may suffice. DOH Administrative Order No. 2009-0011 adds further requirements, such as a doctor's prescription and a purchase booklet for over-the-counter medicines.

Equal Protection and Classification

On the equal protection argument, the Court held that PWDs form a distinct class with substantial differences from other citizens. The classification is germane to the law's purpose of rehabilitating and integrating PWDs into society. The Court noted that the equal protection clause allows reasonable classification, and the law applies equally to all members of the class.

Practical takeaways

• The 20% PWD discount on medicines is constitutional and remains in full force. Drugstores and other covered establishments must comply.
• The discount is an exercise of police power, not eminent domain. Establishments cannot demand just compensation for the discount.
• To claim the discount as a tax deduction, establishments must follow the conditions in DOF Revenue Regulations No. 1-2009, including proper documentation and separate records of sales to PWDs.
• PWDs must present a valid PWD identification card and, for medicines, a doctor's prescription to avail of the discount.
• The ruling aligns with the senior citizen discount jurisprudence, meaning similar mandatory discounts are likely to be upheld under the same constitutional framework.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.