KUALA LUMPUR, Sept 12 — Health Minister Dzulkefly Ahmad has justified a controversial drug price display policy by claiming that consumers and parliamentarians have complained about expensive medications since 2004.
In an affidavit filed in the High Court here last August 25, Dzulkefly cited 70 public complaints about medicine prices from 2020 to 2025, as well as 29 questions from MPs and senators across both Houses of Parliament about drug prices from 2019 to 2025.
“Every year, the MOH (Ministry of Health) receives complaints from consumers and questions in Parliament on expensive medicine prices in the private sector. Investigations find these complaints to have basis,” said Dzulkefly in an affidavit-in-reply to a judicial review application by the Private Medical Practitioners Association of Selangor and Kuala Lumpur (PMPASKL) and Medipulse Healthcare Sdn Bhd against the drug price display mandate.
“However, no action can be taken to protect the interest and rights of consumers because drug prices aren’t yet a controlled item under the Price Control and Anti-Profiteering Act 2011 (Act 723). Therefore, there is no legal source of authority for the purposes of enforcement.
“The issue of expensive drug prices has been raised by consumers and in Parliament since 2004. Medications in Malaysia are not a controlled item in terms of price; their prices depend on market forces and suppliers are free to set drug prices at each stage of the sale and supply chain.”
Dzulkefly filed his affidavit-in-reply on behalf of all respondents in the lawsuit against the domestic trade and cost of living minister, the health minister, and the government.
PH Government Wanted Drug Price Controls
Dzulkefly, who was also health minister in the Pakatan Harapan (PH) administration from 2018 to 2020, revealed that in April 2019, the Cabinet had approved medicine price controls under Act 723 based on a joint proposal by the MOH and the Domestic Trade and Cost of Living Ministry (KPDN).
“According to this proposal, in terms of implementation, delegation of authority for the purpose of drug price controls under Act 723 to MOH public service pharmacy officers would be implemented wherein price controllers, with the approval of the KPDN minister, would appoint MOH public service pharmacy officers as assistant price controllers to implement price controls for medicines under Act 723,” said Dzulkefly.
The health minister cited a March 2, 2020 letter from the KPDN (then known as KPDNHEP) secretary-general to the MOH secretary-general on the implementation of drug price controls under Act 723.
Muhyiddin Yassin of the Perikatan Nasional (PN) government was sworn in as prime minister just a day earlier on March 1 during the Covid-19 pandemic.
Dzulkefly cited multiple studies that the PH government had used as basis for its drug price control policy, including a 2012 study published in the Journal of Pharmaceutical Health Services Research comparing retail drug prices between northern Malaysia and Australia; Malaysia National Health Accounts (MNHA) Health Expenditure Report 1997-2016; and the Malaysia Competition Commission’s (MyCC) Market Review on Priority Sector under Competition Act 2010: Pharmaceutical Sector, published in 2017.
The health minister also cited a regulatory impact statement (RIS) on implementation of a medicine price mechanism, prepared by the MOH’s Pharmaceutical Services Programme (PSP) in 2021; a 2020 cost-benefit analysis (CBA) and regression analysis for regulatory impact analysis on a medicine price mechanism by the Malaysia Productivity Corporation (MPC) and MOH’s PSP; and a 2021 CBA 2.0 slide presentation by MPC and Iqvia.
He further referenced a CodeBlue news report on the CBA 2.0 study.
Only 34% Of Industry Players Voluntarily Shared Drug Prices, Pharma Companies Cited NDA Absence
Dropping price control efforts, Prime Minister Anwar Ibrahim’s government decided in May 2023 instead to implement a drug price transparency mechanism in phases, beginning with obtaining medicine prices at the import, wholesale, and retail levels voluntarily from the industry.
However, as of September 20, 2023, only 34 per cent of all companies in the industry in Malaysia voluntarily shared drug price data with the MOH.
Only nine pharmaceutical companies, or 5.6 per cent of 160 companies, provided complete information on each stage of the supply chain. Many pharmaceutical companies declined to share drug prices, citing the absence of non-disclosure agreements (NDAs) and the commercially sensitive nature of the information.
“Therefore, we could not conduct a cost structure analysis and the MOH was unable to identify which stage of marketing was responsible for an increase in drug prices,” said Dzulkefly.
Hence, in October 2023, the government decided to mandate drug price display in private clinics and hospitals, and community pharmacies. A month later, a stakeholder engagement session was held with 654 participants, comprising representatives from community pharmacies, the public sector, private hospitals, private medical clinics, pharmaceutical companies, insurance providers, consumer groups, and private dental clinics.
Out of 16 memorandums received from stakeholders, a dozen agreed with the price display initiative. Medical and dental groups opposed it as they felt price display was impractical, besides suggesting a more holistic approach by taking into account a private clinic’s operational costs and stagnant doctor consultation fees.
A unified public consultation (UPC) was held from July 15, 2024 to August 20, 2024 on the government’s UPC portal. This included another stakeholder engagement session attended by 472 participants on August 13, 2024, where again most stakeholders reportedly supported drug price display, except doctors’ and dentists’ associations.
Drug Prices Are Cost Of Living Issue, Covid Set Precedent For Act 723 Use
The health minister described medicine prices as a cost-of-living issue under KPDN’s jurisdiction, citing efforts by KPDN and the MOH since 2019 to jointly manage the problem of expensive medications.
Citing legal opinion, he said the definition of “goods” in Section 2 of Act 723 could be expanded to include medicines, whereas Section 10 empowers the domestic trade and cost of living minister to gazette price marking orders.
Dzulkefly pointed out that even though medicines aren’t subject to any form of price controls “for now”, the majority of stakeholders in engagement sessions supported “at least” price transparency in the form of price display.
“Based on legal advice, it was thought to be appropriate for Act 723 to be enforced on the retail sale of medicines in private health care facilities and community pharmacies, including those placed behind the counter or that cannot be accessed or seen by patients or consumers,” said the health minister.
He pointed out that during the Covid-19 pandemic, the government also imposed a price cap on Covid-19 vaccines in a 2022 order under Act 723. “The definition of medicines as ‘goods’ was used in this order, thus setting a precedent.”
Dzulkefly said many countries practise drug price transparency, such as Thailand, Indonesia, Australia, New Zealand, and Taiwan where retail medicine prices can be viewed on open platforms.
Malaysia’s drug price display mandate is also in line with a World Health Assembly 2019 resolution on the transparency of markets for medicines, vaccines, and other health products, besides other related World Health Organization (WHO) instruments.
“South Africa – a middle-income country with a similar health care system as Malaysia, without national health insurance – practises transparency in retail drug prices by gazetting retail prices and publishing them for the public,” Dzulkefly added.
“Drug price transparency is an increasingly accepted practice at the international level as a standard in the health industry. By implementing price display, Malaysia shows our commitment to global best practices that will improve the transparency of medicine prices.”