KUALA LUMPUR: The strengthening of the ringgit is advantageous for pharmacies and suppliers, as more than 85% of the country’s medicine supply is imported, including branded drugs that are mostly traded in US dollars, says Malaysian Pharmaceutical Society president Amrahi Buang.
He said the stronger currency improves margins for suppliers, pharmacies and related parties, enabling them to adjust prices and implement patient assistance programmes, although the sector continues to face inflationary pressures.
Citing the import of active pharmaceutical ingredients (Api), Amrahi pointed out that a 10% increase in Api prices due to a weaker ringgit could affect the margins of local pharmaceutical companies by between 3% and 6% and have an impact on the prices of finished pharmaceutical products.
“A stronger US dollar increases the cost of importing medicines into Malaysia. While the impact on the public sector is minimal due to bulk procurement strategies or fixed-price contracts arranged earlier by the Health Ministry, the private sector is far more affected as prices are not regulated and are determined by market forces.
“It increases the risk of supply disruptions. Dependence on imports exposes the local market to currency volatility and global supply chain disruptions.
“A sharp currency depreciation could lead to lower profit margins of generic drug manufacturers, and that could force these companies to reduce supply or raise prices to offset higher Api costs,” Amrahi told Bernama.
The ringgit has strengthened and breached the psychological level of 4.00 against the US dollar since last week, reflecting improved sentiment on the country’s economic fundamentals and political stability. — Bernama
