KUALA LUMPUR, April 30 — The Galen Centre for Health and Social Policy has warned the government that drug price display may inadvertently cause medical inflation instead of curbing it.
Galen Centre chief executive Azrul Mohd Khalib explained that mandating price display for medicines in private clinics and hospitals, as well as community pharmacies, is theoretically aimed at empowering consumers to compare out-of-pocket health care costs and choose lower-cost options.
The policy also aims to introduce competition between health care providers, hence relying on market forces to reduce the prices of pharmaceutical products.
But the Galen Centre pointed out that unlike everyday products like eggs, chicken, fish, and other staples, the names, types, and formulations of drugs are largely unfamiliar to patients, as they mostly depend on medical professionals to prescribe what is needed for their treatment. Doctors also usually advise patients not to rely on their own internet research.
“How will consumer choice work when this is an area needing specialised knowledge to decide on what drug, dosage, frequency and application (oral, intravenous, or subcutaneous) should be administered to a patient? It could even bring about patient harm or adverse events due to inaccurate intake,” Azrul told CodeBlue in a statement.
“The influence of the ‘invisible hand’, as described in economic theory, becomes even less effective in this case when there is no known reference or standard to measure against.
“Taking advantage of this lack of awareness, private hospitals, clinics, and pharmacies could collectively and collaboratively even mark up the price of drugs even higher after adopting price displays, since patients are not likely to know the recommended retail price (RRP) of specific medicines before and during treatment.
“Instead of curbing medical inflation, this measure could even be inflationary.”
The Malaysia Medicines Price Guide (MyPrIMe) by the Ministry of Health’s (MOH) Pharmaceutical Services Programme contains a list of medicines with RRPs for stock keeping units (SKU), but the website was last updated eight months ago on August 29, 2024. The actual retail prices of the listed drugs may differ from the RRPs displayed on MOH’s portal.
In contrast, the PriceCatcher app by the Ministry of Domestic Trade and Cost of Living (KPDN) lists the actual retail price range for products like fresh, dry, and packaged goods across various supermarkets or stores and is updated every day.
Neither KPDN nor the MOH have announced the gazettement of the drug price display order under the Price Control and Anti-Profiteering Act 2011 (Act 723), ahead of the target implementation date tomorrow on May 1.
A check of the Attorney-General’s Chambers federal legislation portal shows no sign of the order. The most recent order related to Act 723, published last Monday and coming into operation tomorrow, relates to the setting of a maximum retail price for 1kg of pure palm cooking oil.
Associations representing doctors and community pharmacies widely oppose the drug price display policy. The Federation of Private Medical Practitioners’ Associations, Malaysia (FPMPAM) previously told CodeBlue that it has advised its members not to display medicine prices until the order is gazetted, after which FPMPAM will advise accordingly.
The Galen Centre stressed that it is necessary for enforcement officers to know what they’re enforcing, in response to CodeBlue’s question on whether it is sufficient for non-medically trained KPDN officers to simply ensure that drug price lists are visible and easily readable, without necessarily understanding what they’re looking at.
“This is a highly specialised area, even more than automobile repair and modification workshops. There are many questions which are still unanswered due to the absence of an actual Order from the relevant authority,” Azrul said.
“For paracetamol alone, there are at least 10 different brands in multiple formulations and forms, such as soluble tablets, capsules, syrup, and suppositories. Should they all be listed in the name of transparency?
“What if what is being listed is inaccurate, incomplete or even misleading? If the government is serious about enforcing this policy, the KPDN enforcers should know what to look for and what they are looking at.”
The Galen Centre cited other potential unintended consequences from medicine price display, such as a significant burden in regulatory compliance on non-computerised general practitioner (GP) clinics in particular.
“A private clinic could have a hundred drugs in its dispensary which would need to be listed. Should the price display be in the form of a transparent folder file (the type used by Malaysian graduates to display their academic certificates), printed on A1 sheets of paper and fixed on the walls of the clinic waiting room, or digitally listed on tablets and large screen displays in the hospital lobby?” Azrul questioned.
“How often will they need to be updated and how much detail will be needed to be displayed to ensure compliance? This should not be an opportunity for ‘gotcha’ moments for enforcers to trap health care facilities into non-compliance.”
Azrul also predicted that the challenges with drug price display compliance could force private clinics to do away with their dispensaries altogether, putting into practice dispensing separation, where doctors provide diagnosis and treatment, while medicine is collected from a pharmacy via prescription.
“It could be too much of a burden maintaining an onsite dispensary despite the loss of revenue from the sale of medicines.”
The Galen Centre pointed out that unlike other countries with dispensing separation, Malaysian patients are not used to taking prescription scripts from their doctors and getting their medicines from a pharmacy.
“If they feel after the first visit that they can’t afford the treatment, particularly if they are paying out-of-pocket, they may seek care in the public clinic or hospital instead,” said Azrul.
He warned the government that drug price display may hamper the ability of health care providers to provide collective package bundling, where a single payment covers multiple health care services and supplies for a specific episode of care.
“It might introduce a rigidity into the costing of pharmaceutical products where discounts or bundling may not be possible to be given.”
Unlike GP or specialist clinics that usually charge patients a lump sum without delineating separate charges for various services or medicines, private hospitals, which operate on a fee-for-service model, provide patients with long itemised bills.
Even as the MOH is pursuing drug price display, the ministry has also been touting the bundling of health care charges with a diagnosis-related groups (DRG) payment system for private hospitals.
Both contradictory policies have the same objective of curbing medical inflation.
The Galen Centre explained that the cost of pharmaceuticals is only one factor for patients in deciding which GP or specialist clinic to visit, listing other reasons such as reputation, proximity to the home, relevance to the medical condition, convenience, affordability, whether it is a panel clinic of insurers or payers, and operating hours.