Time to enforce phase one of medicines pricing regulation

  • Letters Premium
  • Wednesday, 15 Dec 2021

THE People’s Health Forum is very concerned about the questionable study dubbed “Cost-Benefit Assessment (CBA) 2.0” on the impact of the proposed medicines price regulation (MPR) policy.

The policy was tabled by the Health Ministry (MOH) in collaboration with the Domestic Trade and Consumer Affairs Ministry and approved by the Cabinet in April 2019.

Under the first phase of the policy implementation, the government would impose an upper limit of mark-ups at the wholesale and retail levels in a regressive manner (i.e. higher priced items will have a smaller mark-up upper limit) for about 600 single-sourced prescription medicines.

But almost three years later, the policy is yet to be implemented.

We learnt recently that the CBA 2.0’s preliminary findings, as presented by the Malaysian Product-ivity Corporation (MPC), entirely overlooked the role and benefits of the MPR to patients, their family members and support groups, as well as consumers in general.

The strong voices of the demand side, especially the most affected and disadvantaged groups and individuals needing specific medicines badly, were not included.

So, how can this study be “comprehensive” and “unbiased” if it has only computed the costs and losses from the supply side?

Even those costs and losses cannot be independently assessed due to lack of information on the methodology used in the study.

We would like to point out some major flaws of the CBA 2.0 as compared to the CBA 1.0, which was conducted by MPC for the MOH.

While CBA 1.0 studied the impact of regulating single-sourced prescription medicines – about 600 active substances that are usually very expensive due to the monopolistic nature of the market – CBA 2.0 studied the policy impact related to 5,000 pharmaceutical products, the details of which are not disclosed.

As a result, the exaggeration of the price impact is a real problem.

Why did CBA 2.0 enlarge the scope and automatically assume the implementation of subsequent phase(s)?

Furthermore, CBA 2.0 claims that 33% or 2,600 private clinics will close due to the impact of the proposed MPR. Most private clinics do not even sell or rely on the sale of the 600 listed single-sourced medicines, so how did the study arrive at this number?

CBA 2.0 also claims that revenue of private hospitals will drop by between 35% and 40% due to the implementation of the MPR.

This is yet another problematic exaggeration. Private hospitals contributed a total of RM14.55bil in health expenditure in 2020 (Malaysia National Health Accounts 2020 preliminary data).

A 35% revenue drop would be a shocking RM5bil per year!

If this claim were true, this would represent an obscene amount of excess profits that they would have profiteered from the sale of medicines alone!

We also express strong reservations against the CBA 2.0 study, which looks intent to drive a wedge in society by showing that the MPR policy disproportionately benefits T20 households instead of the B40. This moral narrative is mischievous and besides the point.

The policy will certainly benefit B40 patients who will finally have access to life-saving/life-enhancing medicines that are not provided by public hospitals. The whole of society will also benefit, as even M40 and T20 households do not deserve to be overcharged for medicines.

We strongly urge the government to not give weight to the preliminary findings of the CBA 2.0 study, but to implement the Cabinet-approved policy instead.

We also urge the government to keep the promise made in the 12th Malaysia Plan under Strategy B2: “Ensuring Financial Sustainability for Healthcare”, where it is clearly stated that “a price control mechanism for medicines will be introduced to protect consumers from unfair pricing.”

The rakyat have been waiting for the implementation of Phase 1 of the MPR for far too long.

There is no better time than now to do it.


(With the endorsement of 21 not-for-profit organisations and 27 individuals committed to the principle of Health for All, i.e. universal healthcare as an entitlement based not on the ability to pay, but on the basis of need.)

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