After prescription drugs, calls for Putrajaya to zero-rate all medicines

All medicines with registration numbers ending with suffix 'A', which are prescriptive medicines, will be zero-rated starting 2016. Medical practitioners and consumers, however, said the zero rate should be extended to all medicines. – The Malaysian Insider file pic, November 2, 2015.

Stakeholders have welcomed the recent announcement in Budget 2016 to make prescription drugs zero-rated under the goods and services tax (GST) system, but hope Putrajaya will eventually zero-rate all medicines.

The Malaysian Medical Association (MMA) cautioned that the move to zero-rate prescription drugs would not necessarily translate into price cuts for all patients.

Many of these medicines were getting more expensive due to the weakening ringgit.

The budget announcement essentially means that patients with chronic illnesses such as diabetes, hypertension, cholesterol and ailments such as asthma, who are on long-term medication, will not pay the consumption tax.

Federation of Malaysian Consumers Associations secretary general, Datuk Paul Selvaraj, said they had been pushing for this since the GST was implemented in April, and were glad the government responded positively.

"None of us wants to be on medication if we can help it, we want to be healthy for the rest of our lives.

"And when people are sick, their pockets also get 'sick' , especially for serious illnesses, where the medical bill can go very high," he told The Malaysian Insider.

Paul (pic, right) hoped that in the longer term, the government would look at zero-rating all medicines.

Tabling the budget on October 23, Prime Minister Datuk Seri Najib Razak said all types of medicines for non-communicable diseases would be zero-rated, adding that this covered all types of controlled medicine under the Poisons List Group A, B, C, D, as well as an addition of 95 brands of over the counter (OTC) medicines.

Also included are medicines for 30 types of illnesses such as cancer, diabetes, hypertension and heart disease, increasing the brands of medicines under zero rate from 4,215 to 8,630.

MMA president Dr Ashok Philip said the announcement was a step in the right direction, but added that drug prices were going up due to the depreciation of the ringgit.

"Removal of GST can help to reduce the price of drugs in private clinics, hospitals and pharmacies.

"However, I should point out that many drugs are going up in price due to the depreciation of the ringgit, so the patient may not actually get a price cut," he said in an email reply.

He said they had not received the list of medicines involved in the recent announcement, adding that MMA hoped all medicines would be zero-rated eventually.

Dr Ashok also proposed that no GST is charged on consultants working independently in private hospitals.

"At present, most of them have to charge their patients GST for procedures and consultations done as in-patients.

Consultants working independently in private hospitals currently charge GST for procedures and consultations on in-patients. – AFP file pic, November 2, 2015."Taxing those who are being treated for illnesses is not right.

"The government should seek to lighten the burden of sick people, not add to it," he added.

Pharmaceutical Association of Malaysia executive director, Ewe Kheng Huat, said the move to zero-rate all prescriptive medicines was ”wonderful news for patients”.

He said the announcement covers all medicines with registration numbers ending with suffix "A", which are prescriptive medicines.

"This would generally cover medicines for ailments from coughs and colds to heart disease, diabetes and also cancer," he told The Malaysian Insider.

Ewe said, however, that this will only come into effect in January next year.

He hoped all OTC medicines would be zero-rated in the future.

"The latest announcement means all prescriptive medicines are covered.

"They are broad and benefit all patients who are prescribed medicines from doctors and pharmacists," he added.

Ewe said medicines that remain out of the zero rate list after the budget announcement are mostly OTC medicines, such as lozenges, cough mixture without active ingredients and certain vitamins among others.

He suggested that the relevant government agencies update the GST list for medicines following the budget announcement so that people can be better informed.

- TMI