ZAHEER-UD-DIN BABER, M IZHAM M IBRAHIM

Z. Baber

M. Ibrahim

PROMOTING affordability is a major component of Malaysia's National Drug Policy, and is linked to access - a key policy objective. Within 25 years of independence the Government has been successful in providing health services for all.¹ Availability of medicines at negligible cost in Government hospitals and clinics is a key success indicator of the health care system.

Drug price regulation does not exist in Malaysia, and the Government has no control over the prices of medicines. The Malaysian Drug Control Authority, a regulatory body for pharmaceuticals, is not concerned with the prices. Its primary objective is to ensure the safety and quality of pharmaceuticals.² Under such a system, market forces are expected to stabilise drug prices.

In Malaysia, medicines are available to the public almost free of charge. But regardless of this, many patients get their medicines from private clinics, hospitals, retail pharmacies and supermarkets or through dispensing doctors. It is also an established fact that leaving the financing and supply of drugs entirely to market forces may fail to achieve public health objectives.³ So it is very important to know the public out-of-pocket expenditure on medicines in this price-deregulated system. To research this, a study was carried out to investigate consumer attitudes about the affordability of medicines, and to compare the drug prices from different retail pharmacies with the international reference prices (IRP).⁴ For this purpose, 13 innovator/brand drugs were selected (the majority from the WHO's core list of essential medicines). Retail pharmacy prices were obtained from private retail outlets (n=6) in Kuala Lumpur (Federal Territory). It should be noted that there is no value added tax for medicines in Malaysia.

Consumer attitudes

To assess consumers' perceptions, 230 questionnaires were distributed to the public randomly at major shopping centers at three different geographical locations (Kuala Lumpur, Penang and Perak) across Malaysia. Prior to the actual study, a pilot study was conducted to test the accuracy and validity of the questionnaire.

A response rate of 86% was achieved within a period of two months. Among the respondents, 47.5% were males and 52.5% were females. The racial distribution was 14.5 % Malays, 70.0% Chinese, 12.5% Indians and 3.0% belonging to others races. Among the respondents, 6.0% were professionals, 10.5% businessmen, 11.0% clerical staff, 12.0% housewives, 10.0% managers, 13.5% executives, 16.5% students and 20.5% were others. As far as the educational level of the respondents was concerned, 32% of the respondents had secondary school education, 19.0% pre-university, 31% were either graduate or postgraduates and 18% were others.

The distribution of the monthly income of the respondents was: 41.5% earning up to RM 1000 (1 US$ = RM 3.82), 26% between RM 1000 - 2000, 10.0% between RM 2000 - 2500 and 9.0% have a monthly income of RM 2500 - 3000. 13.5% of the respondents earned more than RM 3000. (Racial distribution and income levels are indicative of the clientele of the particular shopping centres and are not representative of the Malaysian population as a whole). According to the response on the basic monthly expenditures on drugs, 41.5% consumers spend up to RM 100, 33% spent RM 100 - 200, 12.5% consumers spent between RM 200 - 250 and 13% of the consumers spent more than RM 250. Sixty-three percent of the consumers purchase medicines without comparing prices but 37% of the consumers do so prior to purchasing medicines.

Among the study participants, 18% viewed drugs as cheap, 26% considered them priced fairly, and 56% viewed medicines as expensive. When consumers were asked whether the government should regulate drug prices, 25% of the participants strongly agreed, 43% agreed, 13% disagreed with pricing regulation and 19% had no opinion. Thirty-seven percent of the consumers obtained medicines from private hospitals/clinics, 42% purchased from retail pharmacies, 13% got them from the government hospitals, and 8% bought from elsewhere. Fifty-seven percent of the study subjects believed that the price influences their decision to purchase medicine.

Twenty-nine percent of the consumers purchase vitamins, health tonics, nutritional supplements, or traditional medicine, 26% antibiotics, 20% analgesics, 5.5% contraceptives, and 19.5% other medicines. Regarding the lowering of drug prices in the country, 24.5% of the participants strongly agreed, 52.0% agreed, 17.5% were neutral, and only 6% disagreed to the lowering of the drug prices. Regarding the relationship of price with quality of the drugs, 7% subjects strongly agreed that high price matches drug quality, 33.5% agreed, 40% disagree, whilst 19.5% did not have any opinion.

The present survey revealed that a large number of people get medicine from the private retail pharmacies. Some of the possible reasons for getting medicine from retail pharmacies are: long queuing and waiting time in public health facilities, and the non-availability of certain medicines in the public hospitals.

Drug prices

The median prices of innovator brands from retail pharmacies were compared with the international median prices obtained from the International Drug Price Indicator Guide, 2002.⁴ Price difference in ratios was calculated by using the HAI/WHO manual Workbook.⁵ (see Table 1 for results). These ratios reflect the high price paid by Malaysian consumers for brand-name innovator products.

This is a preliminary study on consumers' perceptions and on differential drug pricing, and gives an insight into the situation in Malaysia. The Malaysian Government practices an open market policy and so the pharmaceutical industry fixes its own medicine prices. The Government's assumption is that eventually market forces will promote competition, and that prices will be at a reasonable level. But this does not seem to be happening. The lack of price control gives an opportunity to maximise profits on drug sales.

The Government is trying to boost the pharmaceutical industry, but industry growth must not be at the expense of consumers. There may be several other factors that may contribute to the increase in drug prices. These include lack of a standard drug pricing policy, a small consumer market (compared to neighbouring countries, such as Indonesia and Thailand) and large-scale importation of medicines.

To conclude, there is a need for a detailed investigation into differential drug pricing and pricing mechanisms in Malaysia. A thorough analysis will help to promote proper regulation of drug prices and ensure equity and access for the population.

References

1. Balasubramaniam K. Health care: who cares? Towards affordable quality health care for all in Malaysia. Privatization, quality and rights. Proceedings of the Asia Pacific Consultation on Quality of Health Care Services. Maduri, India, 11 - 14 December 1996.

2. Memorandum on drug prices in Malaysia - the need for control. Consumers Association of Penang, Malaysia, 6 December 1994.

3. Quick JD, Rankin JR, Laing RO, O'Connor RW, Hogerzeil HV, Dukes MN, Garnett A, (eds). Managing drug supply, 2nd ed. West Hartford CT: Kumarian Press; 1997.

4. International drug price indicator guide 2002. Boston: Management Sciences for Health; 2002. Available at URL: http://erc.msh.org

5. Medicine prices; a new approach to measurement. Geneva: World Health Organization; 2003. WHO/EDM/PAR/2003.2. Available at URL: http://www.who.int/medicines/library/prices.shtml/

Table 1. Drug price variations - medians of private retail prices (expressed as ratio over international reference price)