Drug Price Controls Won’t Make Health Care Cheaper, US Pharma Tell Malaysia

By CodeBlue | Posted on

PhRMA says medicine price ceilings may delay patient access to new treatments.

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KUALA LUMPUR, March 6 — Malaysia’s proposed medicine price controls will not address long-term health care cost challenges, a powerful American pharmaceutical lobbyist group claimed.

The Pharmaceutical Research and Manufacturers of America (PhRMA), a trade group representing companies in the United States (US) pharmaceutical industry, also noted that setting ceiling wholesale and retail price for medicines in Malaysia could delay patient access to new medicines.

“The proposed phased implementation of medicines price control to apply first on single-source products which are generally patent protected appears to discriminate against foreign companies,” PhRMA added in its recent submission for the United States Trade Representative’s (USTR) 2020 Special 301 Report, an annual review on US trade policies.

Under the previous Pakatan Harapan (PH) administration, Malaysia’s Ministry of Health (MOH) had planned to target single-source innovative drugs sourced through public procurement in its first phase of price controls, by using external reference pricing to benchmark drug prices in Malaysia against eight to 12 countries.

The average three lowest reference prices will then be chosen to determine the maximum medicine prices allowed in Malaysia at the wholesale and retail levels (clinics, hospitals, pharmacies). Then-Health Minister Dzulkefly Ahmad previously expected drug price ceilings to be a done deal by year-end, but PH recently lost federal power to Perikatan Nasional in a political tussle. So it’s unclear if medicine price regulations will continue under the new government.

First announced last May, Malaysia justified drug price controls to ensure access to medicine at appropriate prices for the people, encourage innovation and healthy competition for industry growth, and expand access to treatments.

Multinational pharmaceutical companies, private general practitioners, pharmacists, and hospitals, however, have all opposed drug price controls in Malaysia, claiming that this may upend the country’s health care system. Dzulkefly also did not publicly announce details of the external reference pricing mechanism before PH lost power.

In defending the move, then-Deputy Health Minister Dr Lee Boon Chye last December told CodeBlue that efforts are needed to stop or control inflation of health care spending, which include drug purchasing, despite a recent study showing Malaysia has among the cheapest prescription drugs globally.

For several years now, PhRMA has been calling on the Trump administration to address discriminatory market access practices abroad that it claimed free ride on American innovation and put US jobs and exports at risk.

The pharmaceutical group has also recommended for the last two years that the US president urge action to reverse compulsory licensing in Malaysia, as well as end damaging pricing policies in several markets, including Canada, Japan, and South Korea.

“America leads the world in the research and development of new medicines and vaccines,” PhRMA senior vice-president for international advocacy Brian Toohey said on February 6. “But foreign trade barriers are undervaluing US biopharmaceutical innovation and putting jobs and exports at risk.

“The United States must use all available tools to ensure our trading partners honour their obligations, end discriminatory practices and level the playing field for American inventors and workers,” he said.

As such, PhRMA wants the USTR to “blacklist” Malaysia for purportedly denying “adequate and effective” protection of US intellectual property rights and fair and equitable market access, by designating it as a “Priority Foreign Country”, the worst trade-related classification to any foreign country.

The US pharmaceutical group also urged Malaysia to be more transparent about listing drugs on the country’s national formulary, known as the “Blue Book”, claiming that this appeared to be based on “ambiguous criteria”. The Blue Book lists drugs which MOH routinely pays for and provides in its facilities. Public university and private hospitals have their own individual formularies.

PhrMA further cautioned Malaysia against giving “special treatment” to halal pharmaceuticals, pointing out that patients — even Muslim patients – deserve access to all medications, regardless if they have non-halal components to them.

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