KUALA LUMPUR — The “evergreening” tactic used by pharmaceutical firms to extend the lifetime of patents nearing expiry must be addressed if Putrajaya is serious about controlling prices of medicines in its bid to keep private hospital costs reasonable, the Malaysian Pharmacists Society (MPS) said.
Its president Professor Amrahi Buang said the tactic is used by pharmaceutical companies in order to continue making profits.
As drug patents usually end after 20 years, firms try to prolong it by using “creative ideas” like introducing different dosages or different salts used to make the drugs, he said.
“This will add to the patent period to be longer than 20 years. When the patent is finished, the innovator will bring their price even below the generic ones to win the tender,” he told Scoop.
Amrahi called on the government to investigate this evergreening tactic by getting the Intellectual Property Corporation of Malaysia (MyIPO) and the Malaysia Competition Commission (MyCC) involved in the matter.
He agreed on the need for some regulation imposed on medicines prices and welcomed the National Action Council on Cost of Living’s (Naccol) move last year to display medicine prices to the public.
He was commenting on Prime Minister Datuk Seri Anwar Ibrahim’s statement in the Dewan Rakyat on Dec 10 that the government would look for ways to keep private healthcare costs reasonable following outcry over drastic hikes in medical insurance premiums.
Among the ways Anwar mentioned was to dismantle the monopoly of certain companies that procure drugs in the country, procure more generic drugs and amend the Sales of Drugs Act 1952.
Anwar also noted that big pharmaceutical companies are selling drugs to Malaysia at a much higher price compared to Thailand due to the lack of regulations and the presence of monopolies here.
Amrahi said that post Covid-19 pandemic, the government had taken major steps to ensure that the country’s supply of medicines.
However, he also noted that the local pharmaceutical industry produces only 47% of more than 500 essential medicines in the country.
“This is indeed a serious matter that the government must look into,” he said.
To increase availability of generic drugs, Amrahi said Malaysia, which already practices this, should make more effort to register and import more generic products with the support of local pharmaceutical manufacturers, he added.
Malaysian Pharmacists Society president Prof Amrahi Buang said the country’s pharmaceutical industry only 47% of more than 500 essential medicines in the country, and this must be addressed if the cost of medicines is to be lowered. – Photo credit: Amrahi Buang, December 24, 2024
Drug procurement monopoly Malaysia’s own doing
Health think-tank head, Azrul Mohd Khalib, however, said the issue of patents has to be handled carefully.
“This is an intellectual property right guaranteed by both Malaysian and international law. Is the government proposing to break patent law in the case of medicines?,” the CEO of the Galen Centre for Health and Social Policy asked.
Azrul also said it was the federal government that had long enabled a monopoly in drug procurement through Pharmaniaga, and asked if Putrajaya had the will to break its dominance.
The drug procurement monopoly was created under the Approved Products Purchase List (APPL) concession which gives Pharmaniaga, a government-linked company, the sole right to supply 30% – or around 700 items – of all drugs and medicines, and to control almost all logistics related to the pharmaceutical supply chain.
“As a third-party supplier for many of these items, there is a markup (imposed) which increases the cost of these drugs.
“Will the government break up this monopoly which the previous PH government was supposed to do, and have an open tender system?,” Azrul said to Scoop.
Pharmaniaga has long faced accusations of monopolising drug procurement for MoH, which it has repeatedly denied. In 2019 and in March last year, it said that only 33% to 35% of the health ministry’s supplies come from the group.
On generic drugs, Azrul said 65% of Malaysia’s drug supply for the public health sector are already generic pharmaceuticals, namely drugs that are already off-patent and produced by manufacturers in Malaysia, India and Egypt, among other countries.
The Health Ministry here had been practicing a “Generic First” policy in drug procurement for more than two decades, he added.
“The prices of drugs, which represent around 20% of a private hospital bill, is not the main problem of healthcare inflation in Malaysia. Hospital charges are the main problem,” he said.
Encourage pharmaceutical manufacturing locally
Azrul also explained Anwar’s remark that pharmaceutical companies sell drugs to Malaysia at a higher price than to countries like Thailand.
He said this is because of Malaysia’s limited market size compared to countries with bigger populations like Indonesia, China and Thailand.
“Based on free market principles, the larger the market, the more volume of goods which can be sold which means that lower prices are possible. Unfortunately, Malaysia is at an economic disadvantage.”
Malaysia’s economy, as an upper-middle income country on the verge of becoming a high income country is also placed in a different classification for certain products, including pharmaceuticals, he added.
“Aside from introducing a drastic measure such as drug price controls or something as straightforward and conventional as pool procurement, there are limited options available,” Azrul said.
Additionally, Malaysia can strengthen its policy to encourage foreign pharmaceutical firms to set up manufacturing facilities here, he added. This will help bring in foreign investment and create high-paying and skilled job opportunities, as well as lower the cost of medicines procured from those firms.
He cited the example of India-based Biocon Biologics – a firm which supplies most of Malaysia’s insulin needs – which has opened up a US$350 million insulin manufacturing facility in Iskandar Puteri, Johor, which is the largest in Asia.
“Is the government planning to reverse that policy and resort to procuring them from abroad instead of manufacturing them here in Malaysia?,” Azrul asked. – December 24, 2024
