KUALA LUMPUR, April 10 — Malaysia’s health care system could face a fresh wave of cost pressures if the United States follows through with its plan to impose tariffs on imported pharmaceuticals and medical devices.
This is despite a temporary 90-day pause on broader tariff measures, the Galen Centre for Health and Social Policy warned.
Galen Centre chief executive Azrul Mohd Khalib said that tariffs on medical goods exported from Malaysia to the US could increase costs locally if those products are later re-imported through public or private health procurement systems.
“Malaysia is the world’s leading producer and exporter of catheters, latex threads, and natural rubber medical gloves. Ninety per cent of medical devices manufactured here are made for export, including to the US,” Azrul told CodeBlue. “Any tariffs on those items will increase the cost of those items.”
“However, if those items such as gloves, catheters, infusion pumps are re-imported back to Malaysia through procurement systems, that cost will be borne by consumers such as the Ministry of Health (MOH), private hospitals, and other players in the health care system. It will increase the cost of health care in Malaysia.”
The Trump administration is reportedly planning to include pharmaceutical and medical imports in a separate round of trade actions, following earlier exemptions for certain sectors such as medicines, semiconductors, and minerals. Medical devices were not exempt from the list of Liberation Day tariffs announced last April 2.
While a 90-day pause on general tariff implementation was announced yesterday in response to market volatility, White House officials have confirmed that sector-specific investigations, including for pharmaceuticals, remain active. During that period, a baseline 10 per cent tariff remains on most countries, except China that faces a 125 per cent tariff.
Azrul said uncertainty around the scope and timing of the tariffs is already affecting health care systems’ ability to plan, particularly in developing countries that rely heavily on global medical supply chains.
“The increase in costs for medical devices and medicines will definitely have an impact on the sustainability of existing funding levels, quality of service coverage, and availability of treatments, for both public and private health care systems,” he said.
“Insurance may be hesitant to provide previously agreed upon coverage. Payers, such as the government, may not want to fund new medicines or treatments. Even a box of disposable medical gloves could be more expensive, despite the fact that Malaysia is the biggest producer of that item in the world.”
Azrul said that both the government and private providers would have limited capacity to absorb further cost increases. “We can neither afford to spend or subsidise our way out of this, nor absorb the increase in costs,” he said.
“It will inevitably be passed onto patients or payers such as governments and insurers. There are not many tools available to deal with this unprecedented situation.”
The warning comes amid heightened concerns over medical inflation in Malaysia. Health insurance premiums and private hospital charges have risen in recent months, becoming a key concern for consumers.
While medicines make up a relatively small portion of total hospital bills, about 70 per cent of hospital charges remain unregulated, leaving patients exposed and vulnerable to price hikes across the board.
Azrul also pointed to deeper structural constraints, saying global health supply chains have been built over decades and can’t be easily reshaped in response to policy shocks.
“Global supply chain structures and regulatory pathways are complex and have been in operation for decades. They cannot be modified or drastically changed to respond overnight to the current threat of US tariffs,” he said.
“The fact is that we can try to reduce the dependency on certain imported medicines or medical devices, but the reality is that modern health care systems, including the US ,depend on globalised supply chains to function.”
According to a 2023 report by the Ministry of Investment, Trade and Industry (MITI), the US was Malaysia’s largest pharmaceutical export destination in 2022, accounting for RM500 million or 17.9 per cent of total exports. Other major markets included Singapore, Australia, Brunei, and China. Malaysia’s key pharmaceutical exports included medicaments, insulin, clinical trial kits, glycosides, and adhesive medical dressings.
Azrul added that while regional trade cooperation may help cushion the impact in some sectors, the unpredictable nature of US tariff policies leaves limited room for a coordinated response.
“Regional cooperation can help protect or ring fence certain sectors of economies,” he said. “But the nature of the broad tariffs may mean that regional players may have to prioritise. They cannot protect or negotiate for all sectors.”
