1. Regulation in some countries including Australia also includes ensuring access to medications irrespective of income.
The Malaysian pharmaceutical market reflects more closely the free market model, where competition between providers is the cost control mechanism.
2. Australia‟s National Medicine policy (NMP) has four main objectives..
2.1timely access to medicines that Australians need, at an affordable cost to individuals and the community;
2.2. medicines meeting appropriate standards of quality, safety and efficacy;
2.3. quality use of medicines; and
2.4. maintaining a responsible an viable medicines industry
In Malaysia the National Pharmaceutical control Bureau
has as one of its objectives the quality and safety (via a legislative framework) of pharmaceutical products to improve the health of the population
3. Many governments go further, however by reimbursing consumers for at least part of the cost of prescription drugs, on the grounds that access to life enhancing medicine should not be related to ability to pay. The Australian government achieves this objective through the Pharmaceutical Benefits Scheme (PBS).
The Malaysian government however does not regulate prices (Barbar et al, 2007)4. Australia has a two tier system of drug regulation:
4.1. The first tier is the approval of a prescription drug for marketing by the Therapeutic Goods Administration (TGA) and the Australian Drug Evaluation Committee (ADEC).
4.2. The second tier is consideration for reimbursement under the Pharmaceutical Benefit Scheme (PBS).
5.The PBS accounts for approximately 90% of prescription expenditure and the Australian government has been able to negotiate prices for prescription drugs under the PBS at prices that are 50-70% of the world price.
6.The effect of patents on prices
When new drugs are listed on the PBS the company applies for a patent, hence drugs are listed at a price premium. The patent period enables the company to cover its costs of research and development and consequently provides an incentive for companies to participate in research and development. Once the patent period has expired then the price subsidy is reduced to that of the generic equivalent. If patients want to continue with the original drug then they pay the difference between the generic price subsidy and the premium price. To assist consumers, the government has recently enabled pharmacists to offer a generic equivalent, irrespective of whether the trade name appears on the script
7. Malaysia – Prices
Medicines vary in price across the country. International Comparative studies on prices of essential medicines have found that
pharmaceuticals sold by the private sector in Malaysia can be higher than international reference price standards. The study found that prices were
relatively more expensive in Malaysia than other similar countries, raising questions of affordability of pharmaceuticals (Hill 2007). A number of
potential supply-chain mark-ups were identified. Further, medicines both dispensed and prescribed by doctors can result in
high mark-ups being charged (Hill 2007).
Medicines sold in the private sector also varied across the country and were found to be higher than the international reference price
References
Babar, ZUD, MIM Ibrahim, H. Singh, NI Bukahri, A. Creese (2007). Evaluating Drug Prices, Availability, Affordability, and Price Components: Implications for Access to Drugs in Malaysia‟ PLOS Medicine 4(3): 466-475
Hill, S (2007). Medicines Prices and Malaysia – Untangling the Medicines Web‟, PLOS Medicine, 4(3):411-412
Salkeld et al (1998). Pharmaceuticals‟ in Economics and Australian Health Policy, Sydney: Allen & Unwin, p.115.
