KUALA LUMPUR, Sept 25 — The Association of Private Hospitals Malaysia (APHM) has cautioned the insurance industry against imposing any potential blanket policies mandating only generic medicines for private hospitals.
APHM president Dr Kuljit Singh said no insurance companies have dictated a generic-only policy to private hospitals to date, aside from a third-party administrator (TPA) instructing the use of only generic versions for long-term medications for its corporate client’s employees effective last September 1.
“Hypothetically, if a blanket generic-only policy were implemented, it could be problematic,” Dr Kuljit told CodeBlue in an email interview.
“Clinicians at private hospitals should ideally have the flexibility to work with patients on a case-by-case basis to determine the most suitable treatment.
“Some patients may not respond well to generic medications and require brand-name drugs for effective management of their condition. Conversely, patients with financial constraints may prefer generic options, which often work well for them.
“APHM’s position is that clinical decisions should ultimately be guided by both a patient’s medical needs and individual patient circumstances, not rigid policy mandates.”
CodeBlue also asked if APHM foresaw patients getting prescriptions from hospitals and paying for their own original medicines in either the same hospital or pharmacies out-of-pocket, should the insurance industry adopt a generic-only policy across the board.
This, ironically, would contradict the objective of the Ministry of Health’s (MOH) price transparency policy mandate in getting people to seek cheaper medicines, CodeBlue noted.
“The position of private hospitals in this matter is clear: our primary responsibility is to provide the best possible care for our patients,” said Dr Kuljit in response.
“If any hypothetical generic-only policy is meted out, APHM, as a consultative member of the Joint Ministerial Committee on Private Healthcare Cost (JMCPHC), has a duty to private hospital patients to raise any issues that may compromise the quality or accessibility of care in this committee.
“In doing so, APHM trusts that both the Ministry of Finance (MOF) and the MOH will recognise the potential risks of implementing a generic-only policy and will work to ensure that no industry stakeholder enforces measures that could adversely affect patient outcomes.”
The JMCPHC, co-chaired by Finance Minister II Senator Amir Hamzah Azizan and Health Minister Dzulkefly Ahmad, is the primary platform for the Reset framework touted by Bank Negara Malaysia to curb private health care costs. Committee members consist of representatives from MOF, MOH, and the central bank.
Dr Kuljit explained that not all innovator or brand-name drugs have a generic or biosimilar equivalent.
He added that although generics are generally effective and well-tolerated by most patients, these medications may not work equally well for everyone.
“For instance, some patients report experiencing side effects, such as stomach discomfort, when using generic versions of over-the-counter painkillers, whereas they tolerate the brand-name version better,” he said.
“Individual responses can vary due to differences in formulation, ingredients, or absorption.”
Dr Kuljit said doctors at APHM member hospitals currently work closely with patients, on a case-by-case basis, to determine whether generic or brand-name medication is more appropriate, considering both the patient’s medical needs and taking their financial considerations into account.
MOH does not have the legal authority to mandate a generic-only policy for private hospitals for cost-containment purposes, as the ministry’s regulatory functions over private health care facilities only cover facility standards under the Private Healthcare Facilities and Services Act 1998 (Act 586).
MOH’s generic-first (not generic-only) policy merely applies to its own health care facilities – as a health care provider funded by the government, unlike private hospitals whose patients are either self-pay or covered by private health insurance.
Similarly, university hospitals have the autonomy to decide the medicines they provide and at the charges they determine, independent of MOH.
When MOH instructed the National Heart Institute (IJN), a private health care facility owned by the Minister of Finance Incorporated (MOF Inc.), to substitute innovator medicines with generics last October, the mandate only applied to public patients sponsored by MOH. About 68 per cent of IJN’s patient load are MOH referrals (pensioners, civil servants, and underprivileged patients).
The instruction to IJN was made on the basis of MOH as a payer, not regulator. (MOH plays multiple conflicting roles in the country as provider, payer, and regulator).
The only aspect of private health care costs regulated by the government is doctor fees under Act 586.
Insurers Exert Influence Over Bed Charges In Private Hospitals
According to APHM, the area where insurers currently exert significant influence over private hospital operations is the pricing of hospital billing items.
“For instance, charges such as accommodation fees (beds) on patient bills are often structured to align with price caps or billing guidelines set by insurers,” said Dr Kuljit.
“APHM has raised this issue at the JMCPHC, urging the government to work with private hospitals and insurers to review and reform the billing structure in private hospitals to promote greater transparency.”
He explained that medical cost inflation in Malaysia is driven by multiple factors, particularly a rapidly ageing population, the rising prevalence of non-communicable diseases (NCDs), and increased demand for private health care.
“Additionally, economic pressures such as rising drug prices and the introduction of advanced medical technologies, which often come at a higher cost, further contribute to overall health care expenditure,” said Dr Kuljit.
APHM also called for Malaysia to invest in developing its own pharmaceutical manufacturing capabilities, following tariffs imposed by the United States.
“In light of ongoing geopolitical volatility, we need to ensure long-term access to both generic and brand-name medications for Malaysians, and therefore, having a reliable local production and supply chain can help safeguard our national medicine supply and reduce reliance on imports,” said Dr Kuljit.
“As we are all aware, Malaysia is not only a leading destination for medical tourism but also an attractive location for pharmaceutical and health care investment given our political stability, skilled workforce, competitive operational costs, and a well-established health care infrastructure.”
CodeBlue previously reported anger among some pharmaceutical multinational corporations (MNCs) and local generics manufacturers, due to a perceived lack of transparency in drug procurement decisions by the MOH.
