Malaysia’s Medicine Procurement Faces Scrutiny

Delays and pricing decisions spark confusion and frustration among pharmaceutical companies.

Drug procurement processes in **Malaysia** are facing increasing scrutiny, with delays, pricing discrepancies, and transparency concerns creating a challenging environment for both multinational corporations and local manufacturers.

Tender Delays Threaten Drug Supply

Sources within the pharmaceutical industry report that significant delays in the procurement of essential medications at the national level could lead to artificial shortages. These delays stem from bureaucratic hurdles within the Ministry of Health (MOH) rather than supply chain failures.

One area affected by procurement delays involves dialysis treatment for kidney failure. Government hospitals are resorting to local purchase orders (LPOs) to secure supplies, as national tenders have not been initiated. The reliance on LPOs strains hospital budgets and places extra administrative burdens on healthcare professionals.

The procurement process can take six to nine months, further exacerbating potential shortages. Even if a tender were issued immediately, awarding the contract would take months, followed by additional time for suppliers to deliver medications from abroad.

Pricing Discrepancies Raise Questions

Reports indicate that the MOH has, in some instances, procured locally made generic medications at prices significantly higher—100% to 200%—than those of off-patent branded drugs. This has led to questions about the government’s priorities and the transparency of the procurement process.

An industry source questioned whether the government prioritizes local pharmaceutical companies over patient health, stating, “Local manufacturing is an economic priority, not a health care need. Is MOH prioritising the economy or health care?”

Another source added, “There is no level playing field now. You say you want lower prices, but when we give you cheaper, you still don’t want it. So what’s your criteria? You’re not being transparent.”

Transparency Concerns Mount

The MOH’s double supplier mandate, intended to boost medicine security, has also faced criticism, with concerns that tenders aren’t split equitably between generics and innovators. Some industry sources have also raised issues with the Skim Anak Angkat (SAA) and Skim Panel Pembuat Bumiputera (SPPB) programs, alleging that certain companies have won tenders through direct negotiation without open competition.

Compounding these issues, the Ministry of Finance (MOF) has reportedly stopped publishing the value of competing tender bids on the ePerolehan portal, further fueling concerns about transparency within the industry. According to the United Nations Office on Drugs and Crime, transparent procurement processes are vital to ensure fair competition and prevent corruption (UNODC).

“We’re all angry that we can’t see the pricing,” said one industry insider.

New Drug Launches at Risk

The perceived prioritization of local products over imported medications has raised concerns that pharmaceutical MNCs may be disincentivized from launching new drugs in **Malaysia**, potentially limiting access to innovative treatments for patients.

One industry source noted that a major drug maker only launched one product in **Malaysia** in the last five years, compared to 20 in other countries, citing a “lack of transparency and fair practices in tender issues.”

“Companies are already saying they don’t want to launch new drugs in **Malaysia** for the next five years,” the source added.

Data suggests that only 22% of new medicines are available in **Malaysia**. New medicines face nearly a three-year delay after their initial global launch, with a mere 2% launched within the first year.

Local Manufacturers Face Challenges

Local generic manufacturers also express frustration with government procurement practices, citing increasing competition from **China**. Concerns have been raised about the listing of medicines from **China** and **India** on the Approved Product Purchase List (APPL), sold at highly competitive prices.

“Local manufacturers find it very hard to match Chinese drugs,” one source explained, adding that “These Chinese products are winning MOH tenders.”

Balancing Priorities and Transparency

An industry source emphasized that governments must be transparent about the trade-offs they make in medicine procurement, particularly when choosing between prioritizing local industry and securing the most cost-effective medications.

“What the government is really procuring is not a product then; what the government is procuring is security. Therefore, it’s putting a value and a premium. So then they should say it. And that’s okay,” the source stated.

The MOH has stated it is reviewing procurement policies, but declined to comment on specific issues, noting that procurement policy is under the jurisdiction of the MOF.

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As **Malaysia** navigates these complex procurement challenges, open dialogue and transparency will be critical to ensuring access to affordable and effective medications for all citizens.