Healthcare costs have surged significantly in many countries over the past decade, with drug prices being a key factor. Numerous policies, legislative measures, and reforms are reshaping how medications are purchased and marketed globally. Countries have adopted various strategies to regulate and optimize drug prices, including reference pricing, copayment systems, indication-specific pricing, and value-based contracts.
In Malaysia, the dual healthcare system—comprising public and private sectors—handles drug pricing differently. While the government negotiates prices in the public sector, the private sector relies on market-driven pricing (Ashraf & Ong, 2021). Research has shown that drug prices in Malaysia, across both sectors, are higher than the international average (Hamzah et al., 2020; Wong et al., 2019; You et al., 2019), highlighting the critical role of pricing in ensuring medicine accessibility for Malaysians.
Several factors contribute to these elevated prices, including a fragmented procurement system, limited negotiation leverage, an underdeveloped local generic drug industry, disorganized pricing mechanisms, and a lack of price transparency. Such challenges could compromise Malaysians' access to affordable, high-quality healthcare in the long term. Enhancing transparency in drug price negotiations has been suggested as a way to address these issues. Currently, Malaysia does not publicly disclose drug prices for either sector, with the government only providing a recommended retail price through its Consumer Price Guide (Ministry of Health, 2022).
For comparison, Australia demonstrates greater transparency in drug pricing. The Pharmaceutical Benefit Scheme (PBS) website (Department of Health, 2022) publicly lists medicine details, including name, form, strength, and pack size. It also provides information on available brands, enabling patients to choose between more affordable or expensive options—a practice that could serve as a valuable model for Malaysia.
The Australian website provides extensive details about drug pricing, including the maximum quantity price, patient charges, markups, and any additional fees. It also explains the methodology behind price calculations, defines pricing terms, and provides examples for clarity. Notably, the listed price corresponds to the formulary price. In contrast, Malaysia only displays the recommended retail price, while the formulary price remains inaccessible to the public. This lack of transparency hinders further research on drug pricing. Additionally, the Australian website offers downloadable data, whereas the Malaysian platform does not include a download option, making access to information less convenient.
In developed nations such as Canada, Germany, and the United Kingdom, drug submission documents from pharmaceutical companies are publicly available. These documents provide insights into drug analysis, financial impact assessments, efficacy, safety, and comparisons with alternative drugs. Expert opinions and appraisals are also accessible to the public. Malaysia, however, does not provide public access to drug submission files, limiting opportunities for public and researcher involvement in the drug pricing process.
Countries like France, Germany, and Canada incorporate assessments of added therapeutic benefits in their drug evaluations. These assessments are publicly available, allowing readers to understand the rationale behind changes in benefit ratings. For instance, the French website includes detailed descriptions of pricing terms, reimbursement rates, indications, patient leaflets, and summaries of drug characteristics. Currently, Malaysia does not consider added therapeutic benefits in its drug application process, missing an important factor that could help negotiate better contracts and fairer pricing.
Malaysia could adopt several practices from other nations to improve drug pricing transparency. For example, it could emulate Australia by publishing comprehensive pricing information, including associated markups and fees, and clearly outlining pricing methodologies (Department of Health, 2022). Additionally, making drug submission files with financial, safety, and efficacy analyses publicly available (National Institute for Health and Care Excellence, 2022) would enhance transparency. Establishing a committee to assess added therapeutic benefits, similar to the French system (Ministère des Solidarités et de la Santé, 2022), could further aid in price negotiations and regulatory improvements.
Transparent medicine pricing is essential, and Malaysia could benefit from following the examples set by other countries. Public involvement in the pricing process is currently nonexistent, and reforms are urgently needed to improve regulation and enhance transparency. Without these changes, the continued rise in healthcare expenditure risks becoming unsustainable in the future.
