Urgent need to regulate medicine prices

By Paul Selva Raj

Medicines are not a commodity. Healthcare is a basic consumer right, and a major component of healthcare is the administration of medicines. Medicines cure people and should never be treated as just another commodity, where pricing and accessibility would be determined by market forces. The government has a critical role to play to ensure that all consumers, especially the low and middle income have access to affordable medicines.

A market review on the pharmaceutical sector was undertaken by the Malaysia Competition Commission. According to the report, “Malaysian drug prices are high by international standards”.
It appears that the pharmaceutical companies in Malaysia are making exorbitant profits by international standards. In another study, it was found that “Malaysia has average higher retail prescription prices compared to Australia due to the lack of pharmaceutical regulation”.

Further according to the Pharmaceutical Services Programme on Medicines Prices Monitoring Malaysia (2017), wholesale medicine prices in Malaysia are eight times greater than the International Reference Price (IRP).
And according to the Penang Institute, the median mark-up for originator’ and lowest-priced generics in private hospitals was 51% and 167% respectively.

Based on the above unjust situation referring to the excess medicine prices Malaysian consumers need to pay for medicines, the health ministry is working on a mechanism of medicines pricing that would put in place a regulatory framework to ensure access of medicines at fair prices for the rakyat.

The essence of the mechanism is that prices along the supply chain must be transparent and there would be a ceiling price at the level of wholesale and consumer prices.

According to the World Health Organization (WHO), an “affordable and fair price” is one that can be funded by patients and health budgets and simultaneously sustains research and development, production and distribution within a country. Further WHO proposes that all nations, high income and low income, in their efforts towards universal health coverage, should have policy measures to control and regulate the price of medicines.

Without price control in Malaysia, in the so-called “free market” currently, the medicine prices in Malaysia are “high by international standards”.

The time to regulate medicine prices is way overdue.

Yet the response by big Pharma against a fair and just price for medicines is extremely negative. As expected with the high prices being charged, they would want to minimise any form of regulation that would impact their profits. While making profits is obviously justifiable by any private company, excessive profits on medicines would have a serious negative impact on patients and consumer well-being. Excuses such as medical tourism would be affected if medicine prices are controlled, just indicates that some companies are more interested in making money from medical tourism rather than ensuring Malaysian patients have access to affordable medicines.
Fomca strongly supports the government initiative to regulate medicines in Malaysia to make it more affordable to the rakyat. While it cannot be denied that there are many challenges in implementing price regulation of medicines, the efforts of the Pharmaceutical Services Division of the ministry of health must be given the fullest support by all consumers, in their efforts to make medicines more affordable for Malaysian patients and consumers.

Paul Selva Raj is CEO of the Federation of Malaysian Consumers Associations (Fomca).
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