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Pharmaceutical and Health Care Assoc. of the Phils. vs. Health Sec. Duque III

The Pharmaceutical and Health Care Association of the Philippines (PHCAP) filed a petition for certiorari and prohibition challenging the validity of Administrative Order (A.O.) No. 2006-0012, also known as the Revised Implementing Rules and Regulations (RIRR) of Executive Order No. 51 (the "Milk Code"). PHCAP argued that the RIRR, issued by the Department of Health (DOH), was unconstitutional and went beyond the scope of the Milk Code by incorporating provisions from international instruments not yet transformed into domestic law and by imposing regulations not authorized by the Milk Code. The Supreme Court partially granted the petition, declaring Sections 4(f), 11, and 46 of the RIRR null and void for being ultra vires, as they imposed an absolute prohibition on advertising and administrative sanctions not found in the Milk Code. The rest of the RIRR provisions were upheld as valid.

Primary Holding

The Department of Health (DOH) exceeded its rule-making authority when it issued RIRR provisions (Sections 4(f), 11, and 46) that absolutely prohibited advertising, promotions, and sponsorships of breastmilk substitutes for infants and young children up to 24 months and imposed administrative fines not authorized by the Milk Code (E.O. No. 51). While the DOH has the power to issue rules to implement the Milk Code, these rules cannot expand, modify, or contradict the parent statute; international instruments like World Health Assembly (WHA) Resolutions, unless transformed into domestic law through legislation or qualifying as customary international law, cannot be implemented by executive agencies as if they were binding domestic law.

Background

Executive Order No. 51, "The Milk Code," was issued in 1986 to give effect to Article 11 of the International Code of Marketing of Breastmilk Substitutes (ICMBS), aiming to protect and promote breastfeeding. Over the years, the World Health Assembly (WHA) adopted various resolutions recommending stricter measures for marketing breastmilk substitutes, including absolute bans on advertising and promotion for certain age groups. The Department of Health (DOH), citing these international instruments and its mandate under the Milk Code and the Administrative Code, issued A.O. No. 2006-0012 (RIRR) to update the implementing rules of the Milk Code, leading to this legal challenge by manufacturers of breastmilk substitutes.

History

  1. On May 15, 2006, the DOH issued Administrative Order No. 2006-0012 (RIRR), intended to take effect on July 7, 2006.

  2. On June 28, 2006, petitioner filed a Petition for Certiorari and Prohibition with the Supreme Court, with a prayer for a Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.

  3. On August 15, 2006, the Supreme Court issued a Resolution granting a TRO enjoining respondents from implementing the questioned RIRR.

  4. After Comment and Reply were filed, the Supreme Court set the case for oral arguments on June 19, 2007.

  5. The parties filed their respective memoranda after oral arguments.

  6. On October 09, 2007, the Supreme Court rendered its Decision.

Facts

  • Executive Order No. 51 (Milk Code), issued in 1986, aimed to implement Article 11 of the International Code of Marketing of Breastmilk Substitutes (ICMBS) and promote breastfeeding.
  • The Department of Health (DOH) issued Administrative Order No. 2006-0012 (RIRR) on May 15, 2006, to revise the implementing rules and regulations of the Milk Code, purportedly also to implement relevant international agreements like WHA Resolutions.
  • The RIRR introduced several provisions, including: extending coverage to "young children" (up to 36 months); stating "exclusive breastfeeding is for infants from 0 to six (6) months" and "there is no substitute or replacement for breastmilk"; prohibiting advertising, promotions, or sponsorships of breastmilk substitutes for infants and young children up to 24 months (Section 11); imposing additional labeling requirements (Section 26); restricting dissemination of information to health professionals (Section 22); prohibiting milk companies from being part of policymaking bodies (Section 4(i)); forbidding assistance from milk companies to health workers (Section 32); strictly prohibiting donations (Section 51); and imposing administrative sanctions including fines (Section 46).
  • Petitioner, an association of pharmaceutical and healthcare companies including manufacturers of breastmilk substitutes, challenged the RIRR, arguing it was unconstitutional, went beyond the Milk Code, and violated due process and constituted restraint of trade.

Arguments of the Petitioners

  • The RIRR is invalid as it contains provisions that are not constitutional and go beyond the law it is supposed to implement (E.O. No. 51, the Milk Code).
  • The RIRR improperly expands the Milk Code's coverage from infants (0-12 months) to "young children" (up to 36 months).
  • The RIRR's declaration that "there is no substitute nor replacement for breastmilk" contradicts the Milk Code which recognizes infant formula as a possible substitute in certain instances.
  • The RIRR imposes an absolute ban on advertising and promotion for breastmilk substitutes intended for infants from 0-24 months, whereas the Milk Code only regulates, not prohibits, such activities through an Inter-Agency Committee (IAC).
  • The RIRR imposes additional labeling requirements (e.g., statement that there is no substitute for breastmilk, warning about pathogenic microorganisms) not found in the Milk Code.
  • The RIRR totally prohibits dissemination of information on infant formula to health professionals, contrary to the Milk Code which allows it under certain conditions.
  • The RIRR absolutely forbids milk manufacturers from extending assistance in research and continuing education of health professionals, and from giving donations, which the Milk Code permits under regulation.
  • The RIRR provides for administrative sanctions (fines) not imposed by the Milk Code, which only provides for penal sanctions upon conviction and suspension/revocation of licenses.
  • The RIRR's provisions, particularly those restricting trade and marketing, violate the due process clause and are in restraint of trade.
  • The definition of "milk company" in Section 5(w) of the RIRR is unreasonable and oppressive.
  • Section 13 of the RIRR on "Total Effect" in promotion is vague and provides insufficient standards.

Arguments of the Respondents

  • The DOH has the authority to issue the RIRR to implement not only the Milk Code but also various international instruments regarding infant and young child nutrition, which are deemed part of the law of the land.
  • The WHA Resolutions, though recommendatory, constitute "soft law" and can be implemented by the DOH under its mandate to define national health policy.
  • The national policy on infant and young child feeding, embodied in DOH A.O. No. 2005-0014, supports the measures in the RIRR, including the absolute prohibition on advertising breastmilk substitutes.
  • The RIRR provisions, including the expanded age coverage, advertising ban, labeling requirements, and restrictions on interactions with health professionals, are consistent with the Milk Code's aim to protect and promote breastfeeding.
  • The DOH has the power to impose administrative sanctions as part of its regulatory functions.
  • The RIRR provisions are a valid exercise of police power to protect public health and do not constitute undue restraint of trade or violation of due process.
  • The prohibition on advertising under Section 11 of the RIRR is not absolute as the IAC (reiterated in Section 12 of RIRR) still evaluates advertising materials.

Issues

  • Whether the petitioner has legal standing to file the suit.
  • Whether pertinent international agreements (specifically WHA Resolutions) are part of the law of the land and may be implemented by the DOH through the RIRR without domestic legislation.
  • Whether the DOH may implement WHA Resolutions by virtue of its powers under the Revised Administrative Code even without a specific domestic law.
  • Whether the provisions of the RIRR are in accord with the provisions of Executive Order No. 51 (Milk Code).
  • Specifically, whether Sections 4(f) (prohibition on advertising), 5(w) (definition of milk company), 11 (prohibition on advertising for 0-24 months), 22 (prohibition on company involvement in breastfeeding promotion IEC), 26 (labeling requirements), 32 (prohibition on company assistance to health workers), 46 (administrative sanctions), 47 (repealing clause), and 52 (donations through IAC) of the RIRR are valid.
  • Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the due process clause and are in restraint of trade.
  • Whether Section 13 of the RIRR on "Total Effect" provides sufficient standards.

Ruling

  • The petitioner, Pharmaceutical and Health Care Association of the Philippines, has legal standing to sue on behalf of its members, as its Amended Articles of Incorporation authorize it to represent the pharmaceutical and health care industry, and its members are directly affected by the RIRR.
  • International instruments like the ICMBS become domestic law through transformation (e.g., enactment of the Milk Code). WHA Resolutions, not being treaties concurred in by the Senate, are not transformed. They also do not qualify as customary international law as there's no proof of consistent state practice and opinio juris establishing them as binding obligations. Thus, WHA Resolutions are generally recommendatory ("soft law") and cannot be implemented by executive agencies as binding domestic law without legislative enactment.
  • The DOH cannot implement WHA Resolutions that advocate for an absolute ban on advertising breastmilk substitutes solely based on its general powers under the Revised Administrative Code if such a ban is not part of an established national health policy enacted through law (like the Milk Code, which does not impose a total ban but regulates advertising through an IAC).
  • The RIRR's extension of coverage to "young children" (beyond 12 months up to 36 months) under Sections 2 and 5(ff) is valid because the Milk Code's definition of "breastmilk substitute" is not age-specific, applying to any food marketed as a replacement for breastmilk.
  • The RIRR's recognition that breastmilk substitutes may be proper in certain cases (Sections 7 and 8 of RIRR) is consistent with the Milk Code.
  • RIRR Section 26(c) (label stating product is not a substitute for breastmilk) and Section 26(f) (label warning about pathogenic microorganisms) are valid as they are consistent with Milk Code Sections 8(b) and 5(b) respectively, which require information to be factual, not imply equivalence to breastmilk, and include health hazard warnings. RIRR Section 16 (prohibiting health and nutrition claims) is also consistent with Milk Code Section 8(b).
  • RIRR Sections 4(f) and 11, which absolutely prohibit advertising, promotions, sponsorships, or marketing materials for breastmilk substitutes intended for infants and young children up to 24 months, are ultra vires and void. The Milk Code (Sections 6(a) and 12) only empowers an Inter-Agency Committee (IAC) to regulate, review, approve, or disapprove such materials, not to impose an absolute ban. The DOH cannot arrogate this power to itself and expand it to an absolute prohibition.
  • RIRR Section 13 ("Total Effect" standard for advertising) is valid as it provides sufficient standards for the IAC to screen advertising materials, consistent with the DOH's responsibility under Milk Code Sections 5, 8, and 10.
  • RIRR Section 22, prohibiting manufacturers from involvement in IEC materials on breastfeeding for women and children, is valid as it pertains to promotion of breastfeeding, not dissemination of scientific information to health professionals (which is allowed by the Milk Code under restrictions).
  • RIRR Section 4(i), prohibiting milk companies from being part of policymaking bodies on breastfeeding, is valid as the DOH has discretion under the Milk Code (Section 12(b)) to determine who participates in such bodies.
  • RIRR Sections 9 and 10, governing research assistance (requiring ethics committee approval and disclosure), and Section 32, prohibiting assistance, support, logistics or training from milk companies to health workers, are valid as they are within the DOH's prerogative under Milk Code Section 8(e) to regulate such assistance.
  • RIRR Section 51 (prohibiting donations from manufacturers) and Section 52 (coursing other donations through IAC) are valid as the Milk Code (Section 6(f)) leaves the acceptance of donations to DOH discretion; DOH is not mandated to accept them.
  • RIRR Section 46, imposing administrative sanctions (warnings, fines, recall, suspension/revocation of CPR/LTO, blacklisting), is ultra vires and void. Neither the Milk Code nor the Revised Administrative Code grants the DOH the express power to impose such administrative fines. Enforcement must be through prosecution under Section 13 of the Milk Code.
  • RIRR Section 57 (repealing clause for inconsistent orders, issuances, rules) is valid as it is within DOH's rule-making power which includes amending or repealing its own prior issuances.
  • Except for the voided Sections 4(f), 11, and 46, the rest of the RIRR provisions (including 4(i), 5(w), 22, 32, 52) do not constitute illegal restraint of trade or violate due process, as they are reasonable regulations for public health and petitioner failed to prove them oppressive or unnecessary. The definition of "milk company" in RIRR Section 5(w) is practically the same as "distributor" and "manufacturer" in the Milk Code and causes no harm.

Doctrines

  • Standing of Association to Sue — An association has legal standing to file suit for its members if its articles of incorporation grant such authority and its members are directly affected by the governmental action. Applied here to grant PHCAP standing as it is mandated to represent its members in the pharmaceutical and health care industry who are affected by the RIRR.
  • Transformation Method (International Law) — Requires that an international law be transformed into a domestic law through a constitutional mechanism, such as local legislation, for it to have force and effect in the domestic sphere. Applied here to state that the ICMBS was transformed into domestic law via the Milk Code, but WHA Resolutions were not so transformed as they are not treaties concurred in by the Senate.
  • Incorporation Method (International Law) — Generally accepted principles of international law are deemed part of the law of the land by mere constitutional declaration (Art. II, Sec. 2 of the Constitution). Applied here to clarify that this pertains to customary international law or general principles, not to WHA Resolutions which are recommendatory and not proven to be customary international law.
  • Customary International Law — Arises from established, widespread, and consistent practice of states (material factor) coupled with a psychological element known as opinio juris sive necessitatis (belief that such practice is rendered obligatory by a rule of law). Applied here to determine that WHA Resolutions have not attained the status of customary international law as respondents failed to prove the elements of state practice and opinio juris.
  • Soft Law — Non-binding norms, principles, and practices that influence state behavior but do not fall into the categories of international law like treaties or custom. Applied here to categorize WHA Resolutions as soft law, which, while influential, cannot be implemented by executive agencies as binding domestic law without legislative enactment.
  • Delegated Legislative Power (Rule-Making Power of Administrative Agencies) — Administrative agencies may issue rules and regulations to implement a law, but these rules must be within the confines of the granting statute and cannot expand, amend, or contradict it. Applied here to invalidate RIRR provisions (Secs. 4(f), 11, 46) that went beyond the authority granted to DOH by the Milk Code.
  • Police Power — The inherent power of the State, often delegated to administrative agencies, to enact regulations to promote public health, safety, morals, and general welfare. Applied here to acknowledge DOH's authority to regulate health information and products, but this power must be exercised within statutory limits.
  • Statutory Construction (Whole and Every Part) — Particular words, clauses, and phrases in a rule should not be studied as detached expressions, but the whole and every part thereof must be considered in fixing the meaning of any of its parts to produce a harmonious whole. Applied here in interpreting various provisions of the RIRR in relation to the Milk Code.
  • Free Enterprise and Protective Regulations — While the Constitution enshrines free enterprise, it reserves to the government the power to intervene and impose protective regulations for the general welfare; such regulations are not per se invalid restraints of trade. Applied here to uphold most RIRR provisions against claims of undue restraint of trade, as petitioner failed to prove them unreasonable or oppressive.
  • Ultra Vires Doctrine — An act of an administrative agency is ultra vires if it is beyond the scope of authority legally conferred upon it. Applied here to declare RIRR Sections 4(f), 11, and 46 null and void as they exceeded the DOH's powers under the Milk Code.

Key Excerpts

  • "The provisions of the WHA Resolutions cannot be considered as part of the law of the land that can be implemented by executive agencies without the need of a law enacted by the legislature."
  • "In view of the enactment of the Milk Code which does not contain a total ban on the advertising and promotion of breastmilk substitutes, but instead, specifically creates an IAC which will regulate said advertising and promotion, it follows that a total ban policy could be implemented only pursuant to a law amending the Milk Code passed by the constitutionally authorized branch of government, the legislature."
  • "The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory authority given to the IAC but also imposed absolute prohibition on advertising, promotion, and marketing." (referring to Sections 4(f) and 11 of RIRR)
  • "In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH the authority to fix or impose administrative fines. Thus, without any express grant of power to fix or impose such fines, the DOH cannot provide for those fines in the RIRR." (referring to Section 46 of RIRR)
  • "It must be clearly explained and proven by competent evidence just exactly how such protective regulation would result in the restraint of trade."

Precedents Cited

  • Executive Secretary v. Court of Appeals — Cited to support the standing of an association to sue for its members if its articles of incorporation so provide and its members are affected by the action.
  • Purok Bagong Silang Association, Inc. v. Yuipco — Reasserted the principle that an association has legal personality to represent its members if the case results will affect their vital interests.
  • Mijares v. Ranada — Cited for the classical formulation of customary international law, requiring state practice and opinio juris, and for the principle that generally accepted principles of international law form part of Philippine law via the incorporation clause.
  • De Luna v. Pascual — Cited for the statutory construction principle that rules should be interpreted as a whole to produce a harmonious meaning.
  • Equi-Asia Placement, Inc. vs. Department of Foreign Affairs — Cited to illustrate that standards like "public interest," "justice and equity," and "public convenience and welfare" have been accepted as sufficient standards for delegation of power.
  • Civil Aeronautics Board v. Philippine Air Lines, Inc. — Distinguished from the present case because in CAB, the law (R.A. No. 776) expressly granted the CAA power to impose fines, unlike the Milk Code for DOH.
  • Perez v. LPG Refillers Association of the Philippines, Inc. — Distinguished because the DOE was expressly authorized by law (B.P. Blg. 33 and R.A. No. 7638) to impose fines, which is not the case for DOH under the Milk Code.
  • Pest Management Association of the Philippines v. Fertilizer and Pesticide Authority — Cited for the principle that free enterprise does not mean removal of protective regulations, and that restraint of trade by such regulations must be clearly proven.

Provisions

  • Executive Order No. 51 (Milk Code) — The primary law being implemented. Its provisions (e.g., Sec. 2, Sec. 3, Sec. 4, Sec. 5, Sec. 6, Sec. 8, Sec. 10, Sec. 12, Sec. 13) were central to determining the validity of the RIRR.
  • 1987 Constitution, Article II, Section 2 — (Incorporation Clause) Cited to explain how generally accepted principles of international law become part of domestic law.
  • 1987 Constitution, Article VII, Section 21 — (Treaty Concurrence) Cited to explain the transformation method for treaties to become part of domestic law, noting WHA Resolutions are not treaties.
  • Revised Administrative Code of 1987, Title IX, Chapter 1, Section 3 — Cited regarding DOH's power to define national health policy and issue orders/regulations concerning its implementation.
  • International Code of Marketing of Breastmilk Substitutes (ICMBS) — An international instrument whose Article 11 the Milk Code seeks to implement. Its transformation into domestic law via the Milk Code was noted.
  • World Health Assembly (WHA) Resolutions — Various resolutions (e.g., on exclusive breastfeeding, advertising bans) cited by DOH as basis for RIRR. The Court found these to be generally recommendatory ("soft law") and not transformed into binding domestic law.
  • WHO Constitution (Articles 19, 20, 21, 22, 23, 62) — Cited to explain the legal effect of WHO regulations (binding if adopted under Art. 21 and not rejected) versus recommendations (non-binding, issued under Art. 23, like the ICMBS and subsequent WHA resolutions).
  • Rules of Court, Rule 65 — The procedural basis for the petition for certiorari.
  • Rules of Court, Rule 3, Section 11 — (Misjoinder and non-joinder of parties) Cited in a footnote, relevant to DOH being impleaded.

Notable Concurring Opinions

  • Puno, CJ — Concurred with the ponencia, adding that the absolute ban on advertising and promotion of breastmilk substitutes under RIRR Sections 4(f) and 11 should also be struck down because it unduly restricts commercial speech. He applied the four-part Central Hudson test for commercial speech: (1) it must concern lawful activity and not be misleading; (2) the asserted governmental interest must be substantial; (3) the regulation must directly advance the governmental interest asserted; and (4) it must not be more extensive than is necessary to serve that interest. While acknowledging the substantial government interest and the causal link, he argued that a complete suppression is more extensive than necessary and unduly restrictive, especially for strictly informative advertisements.