Malaysia May Lose Medicine Access With Price Controls, Hospital Warns

By Boo Su-Lyn | 29 July 2019

Thomson Hospital Kota Damansara CEO Nadiah Wan says global pharmaceutical companies left India when it imposed price controls.

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KUALA LUMPUR, July 29 — A private hospital cautioned the government that global drugmakers may pull out of Malaysia if price controls are imposed on medicines.

Thomson Hospital Kota Damansara CEO Nadiah Wan highlighted the case of India, where many multinational pharmaceutical companies left the billion-dollar market after it imposed price controls on implants. 

“So I can imagine that perhaps some of the European companies may find it no longer worth it to bring their products in, and we may lose access to certain medications,” Nadiah told Malaysian Medics International’s (MMI) “The Good Doctor: A Health Care Festival” at Publika recently.

She also said attempting to regulate the price of medicines in private hospitals could force people to buy black-market drugs, like illegal cigarettes.  

Nadiah said she was “very concerned” about the government’s plan to impose drug price controls, highlighting various costs in a hospital that are not charged to the patient, like hand sanitisers and air filters. Hospitals also use disposable bed sheets and hospital gowns, and single-use syringes, to prevent infection.

“Everything is really expensive because these threats of infection are definitely a big concern,” said the CEO of the Selangor-based private hospital.

“Pharmacy items are one of the areas where the hospital generates enough of a margin to cover the cost of everything else.”

The Health Ministry has said that it will use external reference pricing (ERP) to benchmark drug prices in Malaysia against prices in other countries. 

The three lowest prices from those countries will be averaged to set the price ceilings for pharmaceutical products in Malaysia, where the government determines a certain percentage of markups that can be imposed at the wholesale level and retail points like hospitals, clinics, and pharmacies.

Pakatan Harapan (PH) plans to control the prices of originator medicines in the first phase of its drug price controls.

Nadiah also highlighted the cost of delivering medicine in a hospital, noting that four people are required by regulation to dispense a drug in a hospital pharmacy — one prescribes or keys in the drug, the second pulls it down from the shelf, the third double-checks the medicine, and the fourth explains and dispenses the drug to the patient.

“That’s why in a hospital, everything is geared towards worst-case scenario. The reason is because the drugs in a hospital that we give could potentially kill you if we get it wrong. So I understand why they require all these safeguards, but it drives the costs up as well.”

Monash University consultant endocrinologist Dr Khalid Abdul Kadir said international drug companies sold pharmaceutical products to the government for far cheaper than to hospitals or general practitioners (GPs) because the Health Ministry makes bulk purchases.

“When we started Tropicana [Medical Centre], we were very small, we were very upset because the prices they offered us were much higher than the prices they offered Hospital UKM (Universiti Kebangsaan Malaysia) when I was director there. When I was director at HUKM, prices at HUKM were more than prices they offered UM (Universiti Malaya) or USM Universiti Sains Malaysia),” Dr Khalid told the MMI conference.

He said drugmakers told him that discounts could not be given for small-volume purchases.

“Some GPs have a bigger market, so they get more discounts, some GPs are struggling so they get less discounts. Why can’t we have a single price for the whole country?”

Nadiah confirmed that between a hospital, retail pharmacy, or GP, a hospital pays pharmaceutical companies the highest price for drugs. 

When asked why private hospitals can’t display a price list of standard procedures, Nadiah said most hospitals publicly advertise packages for predictable procedures like delivery and cataract surgery.

“When doctors consult patients, they usually give them an estimate of the cost. But it’s not an estimate you can hold yourself to if a complication were to happen,” she said.

“Secondly, I think that it would be very dangerous for people just to decide purely on cost and whether they’re able to differentiate what they’re getting for that cost.”

Nadiah pointed out that cataract surgery, for example, could be performed using different lenses that cost differently. 

“But it’s not as if you’re comparing apple to apple all the time. Even in hospital packages, when they say a certain procedure, do the patients understand enough to make that apple to apple comparison and understand what is it they’re paying for?”

She said if private hospitals are to display price lists of standard procedures, the government must state what exactly is being charged so that all facilities are compared at the same level.

“Otherwise, there’s no point. I could market a cataract package that is RM5,000 but using another lens, another is marketing it at RM3,000 with a different lens. And you hope the patient understands what the difference is.”

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