Malaysia is paying too much for medicines; who really benefits?

 

MALAYSIA spends billions of ringgit each year on medicines for the public healthcare system. Yet a significant share of that spending still goes towards innovator or brand-name medicines, even when lower-cost generic alternatives are available.

In 2025, the government spent RM3.5 bil on medicines. Of that, RM2.06 bil, or 59%, was spent on innovator medicines, while RM1.44 bil, or 41%, went to generics.

According to CodeBlue, about two-thirds of government pharmaceutical spending was on imported medicines, whether innovator products or imported generics.

The question is not whether patients deserve access to the best medicines. They do. The real question is whether Malaysia is getting the best value for every healthcare ringgit it spends.

Generics are not second-rate medicines

Generic medicines approved by Malaysia’s National Pharmaceutical Regulatory Agency are required to meet the same standards of quality, safety and efficacy as their branded equivalents.

Where clinically appropriate and available, they provide the same therapeutic benefit at a substantially lower cost.

Not every branded medicine has a generic equivalent. Some remain under patent, while biologic medicines follow different regulatory pathways. However, there is still considerable scope to expand the use of generics where suitable.

If Malaysia gradually increased generic procurement where clinically appropriate, the savings could be substantial.

Imagine redirecting even RM500 mil to RM1 bil annually towards:

• Building new hospitals and clinics;
• Expanding cancer treatment programmes;
• Reducing waiting times;
• Hiring more doctors, nurses and allied health professionals;
• Strengthening mental health services; and
• Improving healthcare access in rural communities.

This is not simply about cutting costs. It is about using limited healthcare resources more effectively.

Other countries have already shown what is possible.

• Japan dispenses generics for more than 80% of prescriptions.
• The UK’s National Health Service prescribes medicines primarily by their generic names.
• Countries such as Sweden, Denmark and New Zealand have long embraced generic substitution without compromising patient safety.

Malaysia does not need to reinvent the wheel.

What should change?

First, make generic substitution the default wherever clinically appropriate.

Pharmacists should be empowered to dispense an approved generic equivalent unless the prescribing doctor specifies that a particular brand is medically necessary.

Second, prescribe by generic name.

Generic prescribing should become standard practice across the public healthcare system, supported by electronic prescribing systems that highlight lower-cost alternatives.

Third, strengthen value-based procurement.

High-cost medicines should undergo rigorous health technology assessment to ensure public funds are spent on treatments that deliver genuine clinical value rather than simply carrying premium price tags.

Fourth, strengthen local pharmaceutical manufacturing.

The COVID-19 pandemic exposed the risks of relying heavily on imported medicines. Supply disruptions affected access to critical products, demonstrating that medicines are not merely healthcare commodities but strategic national assets.

Malaysia should strengthen domestic pharmaceutical manufacturing, biotechnology, vaccine production and pharmaceutical research to improve long-term supply resilience.

Fifth, improve transparency.

Publishing an annual Medicines Value Report detailing expenditure, procurement patterns and cost savings would help build public confidence and accountability.

Finally, educate patients.

Many patients continue to equate higher prices with better medicines. Doctors, pharmacists, universities and the media all have a role in explaining that approved generic medicines offer the same quality, safety and effectiveness as branded products when used appropriately.

Proof that generics work

The story of hepatitis C treatment illustrates what is possible.

Treatment that once cost around RM300,000 became available for roughly RM3,000 after generic versions entered the market.

That transformation was driven by scientific innovation, public policy and competition working together.

Malaysia’s challenge is not simply how much it spends on medicines, but how wisely it spends them.

Every unnecessary ringgit spent on higher-cost medicines, where equally effective generic alternatives exist, is a ringgit that cannot be invested elsewhere in the healthcare system.

Fiscal discipline and compassionate healthcare are not competing goals. Used wisely, they reinforce one another.

Patients deserve affordable medicines. Healthcare deserves sustainable financing. Taxpayers deserve better value from every ringgit spent. 

KT Maran is a Focus Malaysia viewer.

The views expressed are solely of the author and do not necessarily reflect those of  MMKtT.

- Focus Malaysia.