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DRUGSTORES ASSOCIATION OF THE PHILIPPINES v. NATIONAL COUNCIL ON DISABILITY AFFAIRS

FACTS:

This case involves a Petition for Review on Certiorari questioning the constitutionality of the mandatory twenty percent (20%) discount on medicine purchases by persons with disabilities (PWDs). The relevant background includes the passage of Republic Act (R.A.) No. 7277, also known as the "Magna Carta for Disabled Persons," on March 24, 1992, which defined terms related to disability. R.A. No. 9442 was later enacted on April 30, 2007, amending R.A. No. 7277 and granting PWDs a twenty percent (20%) discount on medicine purchases. Implementing Rules and Regulations (IRR) were jointly promulgated by various government departments, providing for the discount. The Petition seeks to challenge the constitutionality of the discount.

In addition to the discount, other laws and administrative orders were issued to implement privileges and discounts for PWDs. Administrative Order (A.O.) No. 1, issued by the National Council on Disability Affairs (NCDA) on April 23, 2008, prescribed guidelines for the issuance of PWD Identification Cards (IDC) which serve as the basis for granting privileges and discounts. Revenue Regulations No. 1-2009, issued by the Department of Finance (DOF) on December 9, 2008, prescribed rules regarding the tax privileges of PWDs and incentives for establishments granting the discount. On May 20, 2009, the Department of Health (DOH) issued A.O. No. 2009-0011, specifying that the 20% discount applies to branded and unbranded generic medicines from all establishments dispensing medicines exclusively for PWDs.

The Petitioners filed a Petition for Prohibition before the Court of Appeals (CA) on July 28, 2009, seeking to annul and enjoin the implementation of various laws and administrative orders related to PWD privileges and discounts. The CA rendered a decision upholding the constitutionality of R.A. 7277 as amended, as well as the cited administrative issuances, but temporarily suspended the effectivity of NCDA A.O. No. 1 pending compliance with filing and publication requirements. The suspension was later lifted based on proof of compliance. The Petitioners' motion for reconsideration was subsequently dismissed by the CA.

Consequently, the Petitioners filed a petition before the Supreme Court (SC) raising the issue of whether the CA erred in upholding the constitutionality and implementation of laws and administrative orders related to PWD privileges and discounts.

This case involves a petition challenging the constitutionality of the mandated discount for persons with disabilities (PWDs) on purchases made at drugstores. The petitioners, drugstore operators, argue that the discount fails to provide just compensation, thus amounting to an invalid exercise of the power of eminent domain. They further contend that the implementing rules and regulations of the law violate the due process and equal protection clauses, and are vague and unconstitutional.

The Court of Appeals (CA) upheld the validity of the mandated PWD discount, relying on the earlier precedent set in the case of Carlos Superdrug Corporation et al. v. DSWD. According to the CA, the discount for senior citizens in that case was deemed a legitimate exercise of police power, and the same reasoning should be applied to the present case. The CA emphasized that police power, like eminent domain, aims to promote the general welfare and public interest, and property rights must yield to the primacy of police power when necessary.

The CA also noted that the petitioners failed to present evidence of the alleged confiscatory effect of the discount provision, thereby presuming its validity since all laws are accorded such presumption. It further highlighted that the enactment of Republic Act No. 7277, aimed at supporting the well-being and integration of PWDs into society, is founded on the Constitution's provision on the national economy and patrimony. This supports the authority of the legislature to enact laws for the common good, even if they impose restraints and burdens on private property rights as part of police power.

ISSUES:

  1. Whether the provision in the Implementing Rules and Regulations (IRR) of Republic Act No. 9442, which grants a twenty percent (20%) discount to persons with disabilities (PWDs) on the purchase of medicines, violates the due process clause of the Constitution.

  2. Whether the provision in the IRR of Republic Act No. 9442, which grants a twenty percent (20%) discount to PWDs on the purchase of medicines, constitutes a violation of the rights of the pharmaceutical industry.

  3. Whether the means employed to provide a fair, just and quality health care to PWDs are reasonably related to its accomplishment.

  4. Whether Section 32 of R.A. No. 7277 as amended by R.A. No. 9442 violates the due process clause of the Constitution.

  5. Whether Part IV (D) of NCDA Administrative Order No. 1 is valid.

  6. Whether the definition of terms in Section 2(a) of Republic Act No. 9442 is vague and ambiguous.

  7. Whether the government agency's decision to include the pharmacy industry in the coverage of the law is within its sound discretion.

  8. Whether the discount granted to persons with disabilities violates the equal protection clause.

  9. Whether or not the classification and treatment accorded to persons with disabilities (PWDs) under Republic Act No. 9442 satisfy the demands of equal protection.

  10. Whether or not Republic Act No. 9442 is constitutional.

RULING:

  1. The Supreme Court held that the provision in the IRR of Republic Act No. 9442, which grants a twenty percent (20%) discount to PWDs on the purchase of medicines, does not violate the due process clause of the Constitution. The Court explained that police power, as an attribute to promote the common good and public welfare, may warrant the imposition of restraints and burdens on property rights. In this case, the discount privilege given to PWDs is aimed at promoting the total well-being and integration of PWDs into society, which is in line with the constitutional mandate to provide for the needs of the underprivileged, sick, elderly, disabled, women, and children. Without evidence demonstrating a confiscatory effect of the provision, there is no basis for nullification.

  2. The means employed to provide a fair, just and quality health care to PWDs, particularly the discount extended to PWDs in the purchase of medicine, are reasonably related to its accomplishment. The discount can be claimed by establishments as allowable tax deductions, reducing their taxable income upon which their tax liability is computed.

  3. Section 32 of R.A. No. 7277 as amended by R.A. No. 9442 is valid and does not violate the due process clause of the Constitution. The three documents mentioned in the provision, namely an identification card issued by the city or municipal mayor or the barangay captain, the passport of the PWD, or a transportation discount fare identification card issued by NCDA, serve as proof of entitlement to the 20% discount. The law must be read together with its implementing rules and regulations, which require the applicant to first secure a medical certificate issued by a licensed physician to confirm the medical or disability condition.

  4. Part IV (D) of NCDA Administrative Order No. 1, which allows non-medical persons like teachers, heads of establishments, and heads of NGOs to confirm the medical condition of the applicant for apparent disabilities, is valid. It is limited to disabilities that are easily seen or clearly visible, while non-apparent disabilities can only be validated by licensed physicians through the presentation of a medical certificate.

  5. The definition of terms in Section 2(a) of Republic Act No. 9442 is not vague and ambiguous.

  6. The government agency's decision to include the pharmacy industry in the coverage of the law is within its sound discretion.

  7. The discount granted to persons with disabilities does not violate the equal protection clause.

  8. The classification and treatment accorded to PWDs under Republic Act No. 9442 satisfy the demands of equal protection. The law provides for a different treatment for PWDs, recognizing them as a separate and distinct class with substantial distinctions that are germane and intimately related to the purpose of the law, which is the rehabilitation, self-development, and self-reliance of PWDs.

  9. Republic Act No. 9442 is constitutional. The law is a valid exercise of police power and does not violate the equal protection clause. It is within the discretion of the legislature to determine what measures are necessary for the protection of public interests, and reasonable doubts should be resolved in favor of the constitutionality of a statute. Petitioners failed to prove that the law is unconstitutional.

PRINCIPLES:

  • Police power is the power of the state to promote public welfare by restraining and regulating the use of liberty and property.

  • The power of eminent domain is the inherent right of the state to condemn private property for public use upon payment of just compensation.

  • Legislative acts based on police power require a lawful subject and a lawful method.

  • Property rights may be subjected to restraints and burdens in the exercise of police power for the general comfort, health, and prosperity of the state.

  • Laws enjoy a presumption of validity and should only be declared unconstitutional when a violation is clearly shown.

  • The State has a duty to promote distributive justice and intervene when the common good demands it.

  • The grant of rights and privileges for disabled persons is guided by the principles of rehabilitation, self-development, self-reliance, and integration into mainstream society.

  • The State recognizes the role of the private sector in promoting the welfare of disabled persons.

  • The concept of public use includes public interest, public benefit, public welfare, and public convenience.

  • The means employed to provide fair and just health care to PWDs must be reasonably related to its accomplishment and are not oppressive.

  • The discount extended to PWDs in the purchase of medicine can be claimed by establishments as allowable tax deductions.

  • The three documents mentioned in Section 32 of R.A. No. 7277 as amended by R.A. No. 9442 serve as proof of entitlement to the 20% discount for PWDs, and must be read together with its implementing rules and regulations.

  • For apparent disabilities, non-medical persons like teachers, heads of establishments, and heads of NGOs can validly confirm the medical condition of the applicant, while non-apparent disabilities can only be validated by licensed physicians.

  • Additional guidelines for the 20% discount in the purchase of medicine for PWDs include the presentation of a doctor's prescription, a purchase booklet from the local social/health office for over-the-counter medicines, and adherence to the prescribed dispensing of medicine.

  • When laws or rules are clear and unambiguous, application and not interpretation is imperative. However, a law is deemed ambiguous when it can be understood in different senses.

  • Courts should accord great respect to the decisions and actions of administrative authorities in matters within their special and technical knowledge and expertise.

  • The right to property has a social dimension and can be relinquished by the State for the promotion of the public good.

  • The equal protection clause does not require that every person be affected alike by a statute. It allows for classification as long as there are substantial differences in relation to the object to be accomplished.

  • Classification for the purpose of enacting laws is within the discretion of the state and should be based on reasonable distinctions that make for real differences.

  • A valid classification under the equal protection clause must have a reasonable foundation or rational basis and should not be arbitrary.

  • Legislation may properly rest on narrow distinctions and may recognize degrees of evil or harm.

  • All reasonable doubts should be resolved in favor of the constitutionality of a statute.

  • The burden of proof is on the party claiming that a statute is unconstitutional.