Medical Inflation Justifies Drug Price Controls, MOH Says

A study shows Malaysia has the third lowest medicine prices in the world.

KUALA LUMPUR, Dec 11 – The Ministry of Health (MOH) has defended its plan to control medicine prices, despite a study showing Malaysia has among the cheapest prescription drugs globally.

Deputy Health Minister Dr Lee Boon Chye said efforts are needed to stop or control inflation of health care spending, which includes drug purchasing.

“There is no data available to quantify drug price inflation,” Dr Lee told CodeBlue.

“However, the pharmaceutical industry grew by 8 to 10 per cent yearly. Total health care inflation is about 13 per cent.”

According to the 2019 Global Medical Trend Rates Report by professional services consulting firm AON, a 13.6 per cent net medical inflation rate in Malaysia has been forecast for this year, but the report didn’t explain the factors driving Malaysia’s medical inflation.

It simply listed the most important elements of medical plan costs globally, with hospitalisation the highest at 90 per cent, followed by clinics/ labs (80 per cent), and physician services (73 per cent). Prescription drugs came in fourth at 72 per cent, followed by maternity (42 per cent).

Meanwhile, a 2016 report by data analytics company GlobalData states that the Malaysian pharmaceutical market is expected to grow from US$2.3 billion in 2015 to US$3.6 billion by 2020, a compound annual growth rate (CAGR) of 9.5 per cent.

The GlobalData report attributed the 9.5 per cent CAGR to the absence of strict price regulations, among others. It claimed that medicines in Malaysia were costly as a lack of price regulations saw manufacturers, wholesalers, and retailers freely setting the price of drugs in the country.

Dr Lee said the recent 2019 Medicine Price Index by healthcare provider Medbelle, which ranked Malaysia as the 48th cheapest country out of 50 for common medicines treating conditions like heart disease, asthma, and high blood pressure, is a testimony of the success of the government’s national medicines policy.

The policy, Dr Lee explained, facilitates and encourages the use of generic medicines, while at the same time, reduces red tape for the registration of new products.

“We are still looking at various mechanisms to control inflation,” he added. “This includes exploring various ways of controlling the price at wholesale and retail.”

But when asked if this means the government may not proceed with its plan to regulate the prices of medicine in the country after all, Dr Lee said the government is still exploring its options.

“(The) Ministry of Health wishes to have drug price controls if (it) can be done,” he said. “(But it) needs further engagement.”

In May, Health Minister Dzulkefly Ahmad said Cabinet had given its approval to regulate medicine prices, and would begin gazetting regulations under the Price Control and Anti-Profiteering Act 2011.

However, he said this would depend on another round of consultations with the pharmaceutical industry.

He also said at the time that the rationale in having drug price controls was to ensure access to medicine at appropriate prices for the people, encourage innovation and healthy competition for industry growth, and expand access to treatments.

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