GR 194561; (September, 2016) (Digest)
G.R. No. 194561 . September 14, 2016.
DRUGSTORES ASSOCIATION OF THE PHILIPPINES, INC. AND NORTHERN LUZON DRUG CORPORATION, PETITIONERS, VS. NATIONAL COUNCIL ON DISABILITY AFFAIRS; DEPARTMENT OF HEALTH; DEPARTMENT OF FINANCE; BUREAU OF INTERNAL REVENUE; DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT; AND DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT, RESPONDENTS.
FACTS
Petitioners, associations of drugstore operators, challenged the constitutionality of the mandatory twenty percent (20%) discount on medicines for persons with disability (PWDs) under Republic Act No. 9442 , which amended the Magna Carta for Persons with Disability. They argued that the law constitutes an invalid exercise of police power, amounts to an uncompensated taking of private property, and violates the equal protection clause by imposing the burden solely on certain businesses. The law requires all drugstores to grant the discount, with a provision allowing them to claim the cost as a tax deduction from gross income. The Court of Appeals upheld the law’s validity, prompting this petition.
ISSUE
The core issue is whether Republic Act No. 9442 , specifically the mandatory 20% discount on medicines for PWDs, is constitutional.
RULING
The Supreme Court dismissed the petition and affirmed the constitutionality of the law. The Court held that the law is a valid exercise of police power aimed at promoting the health and welfare of a marginalized sector—persons with disability. The grant of the discount is not an uncompensated taking. While it imposes a burden on drugstores, the accompanying tax deduction scheme provides just compensation by allowing establishments to deduct the cost of the discount granted from their gross income, thereby mitigating the financial impact. This mechanism represents a reasonable quid pro quo.
Furthermore, the law does not violate equal protection. The classification between establishments required to grant the discount and those that are not is based on substantial distinctions relevant to the law’s objective. The law rationally targets businesses like drugstores that provide essential goods and services directly impacting the health and well-being of PWDs. The state has a legitimate interest in assisting PWDs, and the means employed—the mandatory discount with a tax incentive—are reasonably necessary to achieve this public welfare objective without being oppressive to private enterprise. The petition was denied for lack of merit.