Dr Milton Lum points out that drug prices displayed on MOH’s website were last updated in August 2024. “Yet the government expects private clinics and hospitals, with limited resources, to display prices of hundreds and thousands of drugs respectively."
The number of occasions that I have read Bank Negara Malaysia’s (BNM) annual report can be counted on the fingers of one hand.
But when BNM’s 2024 annual report was released, I was flabbergasted by the recommendations to address medical inflation with “The first strategic thrust is to facilitate greater price transparency. Initiatives under this pillar include the display of retail prices for drugs and the publication of price ranges for common health care services. This publication enables policyholders and ITOs to compare prices across different medical providers while promoting healthy competition”.
There is no further elaboration in the report on how the drug prices display by private clinics and hospitals will address the issue of increasing health care costs.
It appears that BNM is echoing the narrative of some politicians and misinformed individuals that drug prices display “would empower patients to make informed decisions about their health care, encourage healthy market competition and ultimately contribute to lowering overall costs”.
Truth be told. Very few countries have managed to reduce health care costs without compromising safety and quality. It will be even more difficult in Malaysia in which total health care expenditure is less than that of similar middle income countries, the demographics are changing and the incidence of the unhealthy is high.
This article addresses the misperception that drug prices display will lower health care costs.
Drugs Dispensing In Medical And Pharmacist Practices
There is a vast difference between the dispensing practices of doctors and pharmacists.
When a patient consults a doctor, a provisional diagnosis is made after history taking and a physical examination carried out, following which investigation(s) may be carried out.
The laboratory, imaging or procedural investigations confirm, or otherwise, the diagnosis made. Treatment is then prescribed – this may be drugs, procedures, or other interventions appropriate for the individual patient’s condition.
The patient has the option of getting drugs dispensed from the private clinic, hospital or pharmacy. In the case of the latter, the doctor writes a prescription for the patient.
The doctor is accountable for the prescription made and can be subject to a complaint to the Medical Council, or even litigation, particularly when an adverse event occurs. For example, when a penicillin or erythromycin drug is knowingly prescribed to a patient who is allergic to the drug.
Drug side effects and interactions are major issue in medical practice. A common situation is the increased risk of gastrointestinal adverse events in those taking nonsteroidal anti-inflammatory drugs (NSAIDs) analgesics like aspirin, ibuprofen, naproxen, diclofenac. Many patients are unaware that even over-the-counter (OTC) painkillers (analgesics) can cause potentially serious adverse effects especially when combined with other common drugs like antihypertensive drugs, corticosteroids or anticoagulants.
On the other hand, the pharmacist does not diagnose or institute investigations. He or she dispenses over-the-counter-drugs or drugs prescribed by a doctor, whose bona fide status can be verified on the Medical Council’s website.
Health Care Facilities Are Not Sundry Shops
It appears that there is a misperception that drugs can be purchased from private clinics or hospitals like in sundry shops / supermarkets.
Anyone can make purchases from sundry shops or supermarkets. The prices of some items are displayed in accordance with the Price Control and Anti Profiteering Act. If one wants to compare prices, one can go to another sundry shop or supermarket.
Try doing that in any private clinic or hospital.
No one can purchase drugs from a private clinic or hospital, not even if one has a prescription from another health care facility. The private clinic or hospital will, in accordance with professional practice, only dispense drugs when prescribed by its own doctor(s).
Drug Prices Display Will Increase Health Care Costs
According to the Frequently Asked Questions (FAQ) distributed at the Ministry of Health’s (MOH) town hall on February 27, 2025, the drug prices can be displayed in a detailed format in a catalogue, notice board, laptop/personal computer/tablet, or television kiosk/electronic screen.
Private clinics and hospitals do not receive subsidies or tax benefits. As such, the capital and administrative expenditures for such display will have to be borne by patients themselves.
The MOH and Anti Competition Commission had confirmed that private clinics and hospitals can charge for regulatory compliance.
If a patient decides to obtain the drugs from another private clinic or hospital, the patient has to consult another doctor, incurring additional costs.
If a patient wants to purchase drugs from a retail pharmacy with a doctor’s prescription, there are additional costs of transport and time.
In short, mandatory drug prices display will inevitably increase health care costs.
Patients’ Rights
Patients’ rights are provided in the regulations of the Private Health Care Facilities and Services Act in which patients have a right to information about the “estimated charges for services based upon an average patient with a diagnosis similar to the tentative or preliminary diagnosis of the patient; and of other unanticipated charges for services that is routine, usual and customary”.
Patients also have a right to an itemised bill.
The exercise of these rights is dependent on patients’ health literacy. According to the World Health Organization (WHO), it is “personal knowledge and competencies that enable people to access, understand, appraise, and use information and services in ways that promote and maintain good health and well-being for themselves and those around them”.
There are few studies of Malaysians’ health literacy. In a study conducted as part of the National Health Morbidity Survey 2019, health literacy was “categorized at a lower sufficiency level”. It was found that “Limited health literacy groups were prevalent among respondents with older age (68 per cent), lower education level (64.8 per cent), and lower household income (49.5 per cent)”. (Int. J. Environ. Res. Public Health 2021, 18, 5813. doi.org/10.3390/ijerph18115813)
For example, there is limited knowledge about diabetes and hypertension which occur in one in five and three in 10 Malaysians respectively. A review of Malaysian studies of diabetes knowledge “highlighted a suboptimal knowledge level among adults with and without diabetes mellitus”. (Malaysian Family Physician 2024;19:26). The prevalence of drug non-adherence in uncontrolled hypertension in a primary care setting in Sarawak was 39.3 per cent (Malaysian Family Physician 2022; Volume 17, Number 3).
Omissions In BNM’s Recommendations
Critical health care cost containment strategies omitted in BNM’s recommendations include:
Healthy lifestyle promotion.
Increasing screening uptake.
Improving health literacy especially about non-communicable diseases (NCDs) and need for optimal NCD control to prevent complications.
Capping of drug prices.
Ceasing governmental drug procurements through intermediaries.
Display of prices of health insurance policies for the public to make informed choices on purchase of policies.
Addressing “cherry picking” (or “cream skimming”) in which insurance coverage is provided only to those less likely to file claims particularly non-coverage for senior citizens above certain ages.
Food For Thought
Drug prices displayed on the MOH website was last updated on August 29, 2024, which was seven months ago. Despite its vast resources, the MOH did not display current prices. Yet the government expects private clinics and hospitals, with limited resources, to display prices of hundreds and thousands of drugs respectively.
While mulling over public statements made on the proposal for drug prices display, Sam Peltzman’s and Nobel laureate George Stigler’s economic analyses of regulation came to mind.
The-Peltzman-Stigler model is a framework which explains the relationship between special interest groups and government regulation i.e. regulation is often designed to benefit special interest groups rather than the general public.
The special interest groups use their political influence to shape regulations such that it creates barriers, protects their market share and generates economic rents. The model emphasizes that politicians and regulators may be motivated by their own self-interests like seeking political funds or future job opportunities rather than solely serving the public good.
Leeson and Thompson, in their review “Public choice and public health” (Public Choice (2023) 195: 5-41), highlighted three themes i.e. “(1) Public health regulations often are driven by private interests, not public ones. (2) The allocation of public health resources often reflects private interests, not public ones. (3) Public health policies may have perverse effects, undermining instead of promoting health-consumer welfare”.
What motivated the proposal to display drug prices is for the reader to decide.
In summary, the display of drug prices in private clinics and hospitals will increase health care costs for patients. It may even lead to private clinics stocking fewer drugs which could result in sub-optimal care consequently.
Dr Milton Lum is a Past President of the Federation of Private Medical Associations, Malaysia and the Malaysian Medical Association. This article is not intended to replace, dictate or define evaluation by a qualified doctor. The views expressed do not represent that of any organisation the writer is or was associated with.