Drug price controls could reduce medical tourism revenue by 60%


KUALA LUMPUR, Feb. 4 – The government’s plan to regulate prescription drug prices is expected to have a negative knock-on effect on medical tourism in Malaysia, according to a cost-benefit analysis.

According to a cost-benefit analysis published by the Malaysia Productivity Corporation (MPC) and overview by code blue recently.

As a result, the overall volume of medical tourism in Malaysia will drop by 54% and revenues will decline by around 60% in 2037.

Over the next 15 years, the net present value (NPV) impact – a method used to calculate future cash flows generated by an investment – ​​of the drug price control policy on medical tourism is estimated to be a loss of about RM8 billion. This equates to a 30% erosion of the medical tourism sector.

Without the drug pricing policy, the medical tourism sector in Malaysia is expected to generate RM23 billion in revenue for the country over the next 15 years.

The federal government has attempted to implement drug price controls through the Price Control and Anti-Profit Control Act of 2011 (Act 723) since the Pakatan Harapan administration, despite opposition from general practitioners (GPs), pharmacists, private hospitals and local and local authorities. multinational pharmaceutical companies.

The plan was to set a wholesale price cap which is determined based on the external reference price (ERP), a price comparison with Commonwealth countries, countries in the region and countries with gross domestic product (GDP) ) is close, used as references in negotiations.

However, multiple changes of government in recent years mean the controversial policy remains under review.

The Pharmaceutical Association of Malaysia (PhAMA), which represents multinational pharmaceutical companies in Malaysia, has previously expressed its willingness to report wholesale drug prices to the MOH so that the government can look into retail prices instead. But the association has warned the government that drug price controls could hurt medical tourism in Malaysia.

PhAMA President Chin Keat Chyuan said The Malaysian Reserve that drug price controls would impact patient experience, minimize treatment options, hinder access to innovative medicines and reduce Malaysia’s attractiveness as a health tourism destination.

The comprehensive cost-benefit assessment (CBA 2.0) on drug pricing policy conducted with private industry groups from November 29 to December 6 last year is the second cost-benefit analysis of proposed drug price controls .

It covers approximately 5,000 products, expanding the scope of the product beyond the first cost-benefit analysis, with MPC describing this latest review as a “more holistic impact assessment” of proposed drug price controls through “information based on data”.


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