PETALING JAYA: The proposed United States tariffs on unbranded generic medicines are expected to have minimal direct impact on most Malaysian pharmaceutical companies, although industry players warn that disruptions to global supply chains could eventually affect local medicine costs and availability.
The tariffs, which will begin with a two-year zero-tariff transition from Aug 1 before escalating to higher rates in subsequent years, target imported unbranded generic medicines and related ingredients.
Malaysian Pharmacists Society president Amrahi Buang said few Malaysian pharmaceutical companies export directly to the United States, limiting the immediate impact.
“The proposed US tariffs on unbranded generics will have limited direct impact on most Malaysian firms because few export directly to the United States.
“However, we are watching indirect effects closely. Shifts in active pharmaceutical ingredient (API) sourcing and higher production costs overseas could quickly ripple into local supply chains and patient access.
“The two-year transition gives industry time to adjust stocks and diversify suppliers, but firms must act now to protect medicine availability and affordability,” he said.
He added that local companies are maintaining buffer stocks of critical materials and reviewing non-US supply lines to ensure long-term national healthcare security.
To mitigate the ripple effects of the rising costs of API and changing global logistics, Amrahi said Malaysian pharmaceutical players and the government are executing aggressive supply chain shifts. They include strategic API diversification by expanding sourcing pools and bulk inventory aggregation.
“Companies such as Duopharma Biotech are widening their supplier base, qualifying alternative API producers and building buffer stocks to reduce dependence on single-region sources and cushion cost spikes.
“At the same time, the Health Ministry is expanding procurement to suppliers in India, China, Turkiye, Egypt, Thailand and Indonesia, while pushing dual-supplier arrangements to reduce risks from single-source supply disruptions.
“Malaysia is also encouraging more local API production through incentives from the Malaysian Investment Development Authority (Mida) and deepening Asean sourcing links. The aim is to boost resilience and reduce exposure to global trade shocks,” he said.
He said rather than isolating itself, Malaysia’s National Pharmaceutical Regulatory Agency (NPRA) is accelerating regulatory approvals through digitalisation and closer alignment with international standards, including those of the United States Food and Drug Administration and the European Medicines Agency.
The Malaysian Organisation of Pharmaceutical Industries (MOPI) also said that direct exposure of the US tariffs is concentrated among a small number of exporters.
“Most Malaysian manufacturers are not major exporters to the United States, so the immediate direct exposure is small.
“However, trade diversion and global supply-chain realignment could push extra products into South-East Asian markets, affecting local pricing and competition.”
MOPI said it was too early to determine how long the industry could absorb any indirect effects, as much would depend on each company’s exposure to the US market, product margins and commercial arrangements.
It said the two-year zero-tariff period gives affected companies time to review their export plans, production capacity, product pipelines and possible US partnerships, while expanding into other markets.
“The direct impact would be on generic medicines manufactured in Malaysia and exported to the United States. The specific medicines affected would depend on the products supplied by individual companies and should be confirmed by the exporters concerned,” they said.
