THE publication of the Public Accounts Committee (PAC) report on rising health insurance premiums and private hospital charges has brought important attention to medicine pricing and the wider cost of healthcare in Malaysia.
For the local pharmaceutical manufacturing industry, the report provides a constructive basis to consider how Malaysia can improve medicine accessibility and affordability while continuing to strengthen the security and reliability of our medicine supply.
A crucial point to note is that the price of medicine supplied by a manufacturer is not necessarily the same as the final amount charged to a patient.
As highlighted in the PAC’s analysis, factors such as billing structures, cross-subsidisation, supply chain mark-ups and distribution margins all form part of the final price.
Manufacturers, distributors and private healthcare providers each perform distinct and vital roles in ensuring medicines are accessible to patients when needed. This distinction is particularly important when evaluating the contribution of locally manufactured generic medicines.
Bringing a locally manufactured medicine to market requires substantial, long-term investments in product development, technology transfer, regulatory compliance and quality assurance.
Local manufacturers must make these investments while serving a relatively small domestic market, competing against imported products that often benefit from massive global economies of scale.
Yet, the entry of generic and biosimilar medicines plays a fundamental role in creating greater choice for patients and healthcare professionals. When purchasers gain additional supply options, greater competition can help improve medicine affordability and accessibility.
While both imported and local generics contribute to this dynamic, local manufacturers provide a crucial added dimension: supply sustainability. The substantial investments made to develop and register these products domestically ensure that competitive pricing is paired with a reliable, uninterrupted supply for the rakyat.
This domestic capability becomes even more critical for low-volume or specialised medicines. The size of the Malaysian market may not always be sufficient to support multiple local manufacturers for the same product without predictable demand.
In such cases, having at least one local manufacturer with the capability to produce the medicine is not a market limitation but an important national asset.
Significant progress has already been made in expanding this local manufacturing capability, particularly for medicines listed under the National Essential Medicines List (NEML). This reflects the continued joint efforts of the Health Ministry and the local industry to strengthen domestic production and reduce avoidable dependence on imported finished products.
This progress must be sustained. Recent geopolitical tensions and disruptions affecting international logistics have proven that affordability cannot be separated from continuity of supply.
In this context, PAC Recommendation 9.11 is both constructive and timely. It calls for the Health Ministry to explore direct sourcing from manufacturers while prioritising local manufacturers. This offers a practical way forward to reduce unnecessary intermediary costs.
But to be truly effective, this approach must be backed by clear, consistent procurement policies that provide predictable demand for those committing resources to produce essential medicines domestically.
By evaluating medicine prices holistically, implementing constructive procurement policies, and continuing to foster local capacity, Malaysia can ensure that essential medicines remain fundamentally accessible and reliably supplied to patients.
SHARVIN A. SUBRAMANIAM
Malaysian Organisation of Pharmaceutical Industries
Petaling Jaya
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