KUALA LUMPUR, July 16 — Rising costs of active pharmaceutical ingredients (APIs) could affect medicine prices and treatment costs in Malaysia’s private health care sector, including clinics and community pharmacies, according to the Ministry of Health (MOH).
Health Minister Dzulkefly Ahmad said higher API costs were expected to put pressure across the country’s pharmaceutical supply chain, from local generic drug manufacturers and distributors to consumers and the government’s medicine procurement budget.
“At the consumer level, the increase in costs could potentially influence medicine prices and treatment costs in the private sector, including at clinics and community pharmacies,” Dzulkefly said in a written Dewan Rakyat reply on July 8.
“For the public sector, this situation could put pressure on government allocations and budget projections for medicine procurement.”
He was responding to Kuala Langat MP Dr Ahmad Yunus Hairi, who asked about the impact of rising API costs on locally manufactured medicine prices amid the ongoing Middle East conflict.
Dzulkefly said the conflict could affect the global pharmaceutical supply chain through higher energy costs, international logistics disruptions and increased transportation costs, placing pressure on drug production costs, including API procurement.
He said medicine supplies at government health facilities remained stable and under control so far.
Any impact on local medicine prices would depend on factors including the source of APIs, the duration of existing supply contracts, foreign exchange rates, and manufacturers’ overall production costs.
Dzulkefly noted that a large share of APIs used in global drug manufacturing is sourced from major producing countries, such as India and China.
“Therefore, any disruption to international trade routes or increase in logistics costs due to geopolitical conflict could put pressure on medicine production costs if prolonged over an extended period,” he said.
At the manufacturing level, Dzulkefly said rising API costs were putting cost pressure on local generic drug manufacturers that depend on imported APIs.
Distributors are also expected to face higher operating costs due to increases in sea freight and insurance costs, raising the working capital required by pharmaceutical wholesalers and distributors.
MOH is monitoring global pharmaceutical markets, including API prices, supply disruption risks and geopolitical developments, as well as changes in medicine prices across the pharmaceutical supply chain and at public and private health facilities.
The ministry is also encouraging the diversification of API and finished pharmaceutical product sources to reduce reliance on particular suppliers or countries.
Other measures include centralised procurement and continued price negotiations, maintaining buffer stocks for medicines under logistics concessions, and strengthening cooperation with the local pharmaceutical industry to improve supply chain resilience and reduce long-term dependence on overseas markets.
“MOH will continue to monitor the current situation and take appropriate mitigation measures to ensure people’s access to safe, quality, and effective medicines is not affected, while ensuring government expenditure is managed prudently,” Dzulkefly said.
