KUALA LUMPUR, April 10 — Private general practitioner (GP) clinics in Malaysia are facing mounting cost pressures and may soon be unable to absorb rising drug and supply prices, amid global trade instability and the potential expansion of United States tariffs to pharmaceuticals.
Federation of Private Medical Practitioners’ Associations Malaysia (FPMPAM) president Dr Shanmuganathan TV Ganeson said recent global cost shocks – including the anticipated US tariffs on imported pharmaceutical products – are worsening an already unstable pricing environment, leaving private clinics and patients increasingly vulnerable.
“Most private GPs have already absorbed significant cost pressures due to stagnant consultation fees and increasing regulatory compliance,” Dr Shanmuganathan told CodeBlue when contacted. “At this point, further absorption is unsustainable.”
He said if cost burdens continue to rise without supportive policy adjustments, many clinics may struggle to remain viable.
Malaysia imported approximately US$2.4 billion (RM10.8 billion) worth of pharmaceutical products in 2024, with imports from the United States accounting for about 9.8 per cent, or US$236.44 million, according to data from the United Nations COMTRADE database as reported by Trading Economics.
Key categories of pharmaceutical imports from the US included retail-packaged medicaments (US$116.37 million); vaccines, antisera, and other blood-related products (US$61.47 million); pharmaceutical goods (US$45.24 million); wadding, gauze, and bandages (US$10.74 million); and extracts of glands or organs (US$2.25 million).
While American products form a minority of Malaysia’s pharmaceutical imports by volume, Dr Shanmuganathan noted they are often high-value, specialised items.
“Tariff increases or trade disruptions involving any major supplier, including the US, can ripple through the broader supply chain, affecting even non-US sourced items due to global sourcing and logistic interdependence.”
Private GPs are already observing unpredictable and steeper price hikes from suppliers. “Price shifts are frequent, even under stable conditions,” Dr Shanmuganathan said. “Many pharmaceutical companies have a long-standing tendency to raise prices regularly. With recent global cost pressures, such increases have become more unpredictable and steeper.”
Dr Shanmuganathan also warned that regulatory policies like mandatory drug price display rules at clinics may backfire in such an environment. “Regulatory measures such as mandatory price display at clinics may create confusion, as displayed prices will not keep pace with frequent fluctuations, thus undermining the intended transparency.”
The US government is expected to soon announce a “major” tariff on imported pharmaceuticals, with President Donald Trump saying yesterday that the move aims to encourage drug makers to relocate operations to the USS.
Malaysia exported RM500 million worth of pharmaceuticals to the U.S. in 2022 – its largest export destination – including medicaments, insulin, and clinical trial kits. Although Malaysia has not imposed retaliatory tariffs, the US measure may drive up the cost of innovative drugs locally due to supply chain realignments by multinational companies.
As of market close yesterday, Bursa Malaysia’s Health Care Index – which tracks rubber glove manufacturers, private hospital groups, and pharmaceutical companies – fell 7.6 points or 0.42 per cent to 1,790.06, its lowest level since December 2023. The index has declined by 25.26 per cent year-to-date.
Most health care-related stocks ended in the red yesterday, with pharmaceutical companies among the hardest hit. Pharmaniaga Berhad fell 4.65 per cent, while Y.S.P. Southeast Asia Holding Berhad declined 2.91 per cent, Duopharma Biotech Berhad 2.63 per cent, and Kotra Industries Berhad 2.53 per cent.
Private hospital operators also declined, including TMC Life Sciences Berhad (down 2.63 per cent), KPJ Healthcare Berhad (1.53 per cent), and IHH Healthcare Berhad (0.3 per cent). The only gainers were rubber glovemakers: Kossan Rubber Industries Berhad (up 4.05 per cent), Supermax Corporation Berhad (3.87 per cent), and Careplus Group Berhad (3.13 per cent), with Kossan and Supermax ranking among the KLCI’s top 20 gainers.
The broader FTSE Bursa Malaysia KLCI and other indexes also closed lower, tracking regional losses amid renewed fears of aggressive US tariff measures.
FPMPAM is urging the government to consider several policy responses. These include requiring pharmaceutical companies to provide advance price notifications to the Ministry of Health’s (MOH) Pharmaceutical Services Division (PSD), which would enable better monitoring of unjustified price hikes and improve regulatory oversight.
The group is also calling for stronger and more structured engagement between the MOH and the private sector, to ensure health care policies are grounded in operational realities.
Dr Shanmuganathan said the mandatory drug price display regulation – which has yet to be gazetted but is scheduled for enforcement on May 1 – should also be repealed, particularly in light of the current global pricing volatility.
“The MOH must move beyond short-term firefighting,” said Dr Shanmuganathan. “A more structured and strategic engagement with the private sector is essential to understand operational realities and co-develop sustainable policies. Without this, efforts to regulate and manage health care costs will continue to fall short.”
FPMPAM further proposed support measures such as tax relief, bulk purchasing mechanisms, or regulatory flexibilities to help clinics avoid passing rising costs directly to patients.
The doctors’ group also urged the government to strengthen local production and sourcing of essential medical products to reduce Malaysia’s vulnerability to external shocks.
In the latest twist, Trump announced a 90-day “pause” on all tariffs and cut reciprocal duties to 10 per cent, except for China, in a move to calm markets after several days of heavy selling raised fears of a US recession.
The White House reportedly clarified that the 90-day “pause” means that the “tariff level will be brought down to a universal 10 per cent tariff” during that time while “negotiations are ongoing”, CNBC reported. This does not apply to China that will see US tariffs on its goods rise to 125 per cent.
Trump told reporters that the US does not want to “hurt countries that don’t need to be hurt.” The White House also said the 10 per cent blanket tariff would apply to nearly all US imports, though some sectoral carve-outs remain.
Existing 25 per cent duties on autos, steel and aluminum will stay in place, as will tariffs on Mexican and Canadian goods not covered by the USMCA trade pact.
Exemptions for copper, lumber, semiconductors, pharmaceuticals, and critical minerals remain under a previous order, but officials have signalled these sectors could face future trade investigations that may result in new targeted tariffs, similar to those on autos.
