Kuala Lumpur, 08 July 2019 – The Galen Centre for Health and Social Policy today released a policy brief titled “Drug Price Controls In Malaysia: Implications and Considerations“.

Commenting on the document, Galen Centre’s Chief Executive Azrul Mohd Khalib said “There is no one-size-fits-all approach or quick fix to achieving an optimal balance between paying the costs of providing high quality healthcare and ensuring equitable, accessible and affordable treatment for all. This has been one of Malaysia’s major challenges as an upper middle income country, making its transition to a high income nation.”

“Recognising that challenge, this Government has already taken positive and constructive steps to assess and optimise drugs and medicine purchases, through improved price negotiation, patient access schemes and pooled procurement. It is also looking at initiatives to amend prescribing behaviours and avoid possible monopolies in procurement by encouraging open tenders.”

“However, we are concerned the government is now about to impose price controls on parts of the healthcare sector. This needs to be fully thought through.”

“Evidence from other countries show that imposing price controls (meant to temporarily fix supply and demand problems) over a long period of time or permanently, could produce negative and unpredictable consequences.”

“Will patients out-of-pocket payments actually be reduced as a result of price controls? Will the savings gained from this policy translate or trickle down to patients? Will access to newer drugs be affected?” he asked.

“This move could also cause a variety of ripple effects, both short and long term, across the entire healthcare sector, affecting general practitioners,  private clinics, community pharmacists, private hospitals, pharmaceutical companies. “

“Price controls do not encourage innovation and healthy competition for industry growth. It could actually harm the local healthcare industry’s ability to deliver much needed services and products to communities in need.”

“We need to have better clarity and transparency regarding the implications of such a move. At the very least, a Cost Benefit Analysis should be conducted and the results shared with stakeholders,” Azrul emphasised.

The policy brief highlights the challenges and implications which could occur as a result of imposing drug price controls.

The paper has five main recommendations: 

• A Regulatory Impact Analysis (RIA) of the proposed price controls regulation must be conducted to determine impact of drug price controls. The results should be made publicly available and shared with all stakeholders.
• A Cost Benefit Analysis should be carried out by an independent party and presented to the Cabinet before gazettement to ascertain the impact to the industry.
• The issue of price controls should be referred to the Parliamentary Select Committee on Health, Education, Community and Social Development before the policy is implemented.
• The Ministry of Health should be more transparent in sharing proposed changes to legislation and timelines. 
• Timely and meaningful consultations should be conducted with all industry players and publish their concerns.

The policy brief was developed based on roundtable discussions and consultations with government, non-governmental and private sector stakeholders held in January and June 2019.

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The Policy Brief can be downloaded here