Problem With Medicine Price Controls: Real Prices Unknown

The actual cost of medicines in MOH facilities are not known either.

KUALA LUMPUR, Oct 23 — The Ministry of Health’s (MOH) proposed drug price regulations are problematic because medicine prices include other unknown costs in the supply chain, a cancer advocate said.

National Cancer Society Malaysia (NCSM) medical director Dr M. Murallitharan said the price of medicines sold in hospitals, for example, would have included the price of pharmacists and other services, and that it’ll be impossible to remove any particular service in selling that medicine, just to get a cheaper price.

“Price control mechanism is a really blunt instrument,” Dr Murallitharan told a recent forum on advanced breast cancer organised by the Galen Centre for Health and Social Policy here.

“So when you talk about price control, this is another problem that MOH is trying to push onto everybody — ‘I will force the price of drugs to stay low, I’ll put a fixed price, everybody go within the fixed price’.

“But actually, nobody knows the real price. That’s the problem. What we’re getting is, we’re getting the price with all the services mixed in,” he added.

The public health physician also said that the actual cost of medicines in MOH facilities, in terms of delivery, is not publicly known.

“They could be 10 times more expensive than private hospitals giving the same kind of treatment. We really don’t know,” he said.

The cancer advocate pointed out that private hospitals are subject to various regulations under the Private Healthcare Facilities and Services Act 1998 that are not imposed on government medical facilities.

“Let’s say, for example, private hospitals need 30 toilets. If you don’t get the 30 toilets, they don’t give you the license, for example.

“Government hospitals, same size, need 25 toilets, six toilets, three toilets, they give you licence. Just in terms of toilets, you count the amount of toilets you need to maintain, where does that money come from? So it’s a difficult case to make.”

Dr Murallitharan called for strategic purchasing instead to reduce medicine prices, pointing out that the UK has plenty of successful direct negotiations with drug makers on originator medicines that are produced by only one manufacturer.

“Under this new Malaysia Baru, people are scared to negotiate directly. In different countries, very successful direct negotiations have been done,” he said.

In the UK, the National Institute for Health and Care Excellence (NICE) recommends which medicines the NHS should fund based on the treatments’ effectiveness and value for money, unlike in Malaysia where MOH decides which drugs it should pay for in its own facilities.

Doctors, pharmacists, hospitals, and drug makers have protested against MOH’s plans to impose medicine price ceilings at the wholesale and retail levels.

The Pharmaceutical Association of Malaysia (PhAMA) — which represents 48 local and multinational pharmaceutical companies in Malaysia — told CodeBlue recently that medicine price regulations could affect foreign drug manufacturers’ investments into the country.

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