KUALA LUMPUR, March 31 — A local pharmaceutical distributor has warned of potential medicine price increases and supply constraints in the public health care system, citing rising input costs linked to geopolitical tensions.
In a March 27 letter to a local partner involved in managing Ministry of Health (MOH) contracts, Jardin Marketing & Distribution Sdn Bhd said higher crude oil prices from the West Asia conflict are expected to drive up the cost of raw materials, packaging, logistics, and insurance.
“Based on current market conditions, raw material costs are conservatively expected to increase by up to 50 per cent, with potential for further increases if the situation persists,” said Idris Ashraf, head of commercial at Jardin Marketing & Distribution, in his letter sighted by CodeBlue.
Jardin Marketing & Distribution is part of the Jardin Pharma Berhad group that supplies pharmaceutical products to both public and private health care sectors.
Jardin Pharma manufactures and distributes generic pharmaceuticals, nutraceuticals, and cosmeceuticals, with products covering areas such as dermatology, including treatments for conditions like eczema and psoriasis, as well as infection control products such as hand sanitisers.
The drug maker supplies products to the MOH through concession arrangements, as well as to the private health care sector, and is expanding into international markets.
Jardin’s letter was addressed to Teraju Farma Sdn Bhd, a Bumiputera-registered supplier that provides pharmaceuticals, medical equipment, and hospital-related products to government and private health care facilities, including major public hospitals nationwide.
According to its website, Teraju Farma supplies hundreds of health care facilities, including MOH hospitals, health offices, and public sector agencies, suggesting the advisory may have broader reach within the public health care system.
The letter has reached at least one district hospital in Sabah, where it was circulated internally by the pharmacy department, indicating that the advisory has begun filtering down to the facility level.
Jardin noted that many pharmaceutical products and components are derived from petrochemicals, making them directly vulnerable to oil price fluctuations.
The company also indicated that the situation may constitute force majeure – a contractual clause referring to unforeseen events beyond the control of parties that may affect obligations – describing it as beyond the control of all parties and potentially affecting cost structures and supply continuity.
‘First-Come, First-Served’: Hospitals Advised To Order Early, Prepare For Allocation
In its letter, Jardin Marketing & Distribution urged its partner to inform hospitals and health care facilities of the potential for rising costs and supply disruption, and to encourage early ordering.
Hospitals were advised to plan procurement in advance “to obtain supply at current prices (while stocks last)”, while acknowledging that future prices may be affected depending on ongoing developments.
The distributor further cautioned that supply would be subject to stock availability, and that allocation may be required if demand increases.
It also stated that current stock would be distributed on a “first-come, first-served” basis.
Jardin’s advisory suggests that pharmaceutical suppliers are beginning to adjust expectations within the public procurement system in response to global cost pressures, even as no widespread disruption has been publicly reported.
CodeBlue previously reported that while Malaysia has not yet seen disruptions in medicine supply, rising fuel costs, logistics constraints, and dependence on global manufacturing hubs – particularly India – are expected to drive up prices and could eventually strain supply if geopolitical tensions persist.
The MOH has said Malaysia currently holds up to five months of medicine stock, including buffer supplies, and that the short-term impact of the ongoing conflict remains minimal, while private hospitals have also reported stable supply so far.
However, industry observers note that cost increases typically precede supply disruptions, as manufacturers and distributors face margin pressures, particularly for low-cost generic medicines.
Pharmaceutical supply chains are closely linked to oil and petrochemical inputs, which underpin not only active ingredients but also packaging materials, plastics, and transport logistics.
Malaysia remains heavily reliant on imported pharmaceuticals, particularly generics, making it vulnerable to external shocks in pricing and supply.
Any sustained increase in input costs could place pressure on government procurement budgets and affect the availability of essential medicines in public facilities.
Jardin’s letter explicitly references MOH contracts and tenders, suggesting that the potential impact extends to the public health care system.
CodeBlue has contacted the MOH and Jardin Marketing & Distribution for comment on whether any supply disruption is expected and whether procurement or budget adjustments are being considered.
Multiple sectors in Malaysia, including manufacturers, farmers, and school bus operators, have already warned of price hikes due to peninsular diesel cost surges in the country and oil price hikes, as the Iran war continues beyond a month.
Jardin’s letter is the first reported direct impact from the Persian Gulf conflict on the government’s budget that is already under strain, as the cost of fuel subsidies surged from RM700 million in January to an estimated RM4 billion a month.
