KUALA LUMPUR, April 30 — Medicine prices in Malaysia have not yet risen across the board, but increases are expected as higher-cost active pharmaceutical ingredients (APIs) purchased during the current global disruptions begin to feed into production cycles.
Malaysia remains heavily dependent on imported APIs, the key chemical components that give medicines their therapeutic effect, despite having about 90 local manufacturers producing finished products like tablets and capsules.
“Most Malaysians understand their medicines as tablets, capsules, syrups, and creams. These are called finished form products. However, it does not start there.
“Malaysia is ‘virtually dependent’ on imports for medicine security and adequacy,” Lim Teng Chyuan, president of the Malaysian Association of Pharmaceutical Suppliers (MAPS) told Astro Awani’s Consider This host Melissa Idris yesterday.
MAPS represents Malaysian companies that mostly import generic pharmaceuticals into the country.
Globally, API production is concentrated in a few countries, particularly China and India, exposing Malaysia to external shocks. “China and India together form the largest supplier market for API, not just for Malaysia, but for the entire world,” Lim said.
He stressed that reliance on imports extends across all categories of medicines, including those produced locally. “In the final analysis, whether it’s locally produced, it still is dependent on imported APIs.”
Dependence is highest for newer and more complex treatments, including biologics, with only one such manufacturer in Malaysia.
“Small molecules that are still under IP protection or recently expired do not have any or much competition either from local or foreign sources, making them particularly susceptible to supply disruptions,” Lim said.
“Leaving aside highly protected products, our reliance correlates to our disease burden. The highest disease burden is in heart disease, diabetes, cancer, and infections. With some exceptions in cancer, treatments for these conditions can be supplied locally as well as through imports, particularly from India and Thailand,” Lim said.
“Some of our local manufacturers are even importing finished form products even though they have their own factory, but due to demand, it is not economical for them to manufacture locally.”
Cost pressures are already emerging, particularly from higher freight and logistics costs following disruptions linked to the Gulf conflict.
“As early as the first week of the Gulf conflict, we have been monitoring the situation. Our observations revealed mainly impacts on costs related to order fulfilment,” Lim said. “An early survey among our members revealed that the cost of inbound freight increased on average around 20 per cent.”
He said the extent of cost exposure depends on contract terms. Under cost, insurance and freight (CIF) arrangements, suppliers bear transport costs, while under ex-works (EXW) terms, buyers must arrange and pay for shipping themselves, leaving them more vulnerable to rising freight rates.
“CIF basis means that everything is accounted for, including freight and insurance. This would have the least impact on purchasers, while ex-works would be the worst hit because the buyer has to pay for the transportation from the factory up to our doorsteps,” Lim said.
Beyond international shipping, domestic distribution costs have also risen. “Then there is the cost of outbound freight related to our own local fulfilment. Once the goods enter our warehouse, we have to fulfil local demand, local supply that is also affected,” Lim said.
He noted that while the government provides some fuel subsidies, not all logistics costs are covered, particularly for deliveries to smaller or remote locations that require third-party transporters.
At the same time, logistical disruptions have begun to affect delivery timelines, particularly for air freight shipments that previously transited through Gulf airspace. “Some of the main carriers transit through the Gulf states, and because of the danger to the airspace, flights are being diverted, causing delays,” Lim said.
‘Out Of Stock’ Doesn’t Mean No Supply
Despite these cost pressures and delays, shipment disruptions have not translated into widespread medicine shortages. “It is easy to mix this up with stock shortage. That is one point you have to be very careful of,” Lim said.
He explained that supply interruptions are often localised at the provider level rather than indicative of a national shortage. “If one supplier is short on stocks, it does not necessarily mean that the country is out of stock,” he said.
Health care providers typically source medicines based on price, credit terms, and supplier relationships, meaning a disruption affecting one supplier may not affect others.
“Your supply outlet, be it the general practitioner (GP), the pharmacy or the hospital, may be out of stock of the products from their ‘preferred’ supplier. They can still source from another supplier,” Lim said.
He explained that many commonly used medicines also have multiple brands and formulations available in the market, allowing substitution when needed.
“Take for example one of the most common products used in Malaysia, paracetamol. There are about 200 products of different strengths and dosage forms available. So it’s not that it’s out of stock, just that your preferred brand will be out of stock,” he said.
Lim said local pharmaceutical suppliers are currently holding an average of three to four months of inventory, although stock levels vary depending on ordering cycles and contract volumes.
This buffer is providing temporary relief as global disruptions continue, but may only delay the impact of rising costs and supply constraints if conditions persist.
Lim said widespread price increases have yet to materialise, as manufacturers are still drawing on pre-crisis inventory of API. “Eventually the cost of APIs will hit our suppliers when they replenish their stocks – it is just a question of when.”
