Amid debate over regulating price of medicine in Malaysia, cost of HIV drugs hits record low

Students hold red ribbons during an event to mark World AIDS Day at a high school in Hefei, Anhui province, China December 1, 2017. — Reuters pic
Students hold red ribbons during an event to mark World AIDS Day at a high school in Hefei, Anhui province, China December 1, 2017. — Reuters pic

KUALA LUMPUR, July 15 — A single prescription of a generic antiretroviral therapy (ART) drug for HIV treatment once cost nearly RM2,000 in federal subsidies.

At government hospitals, patients would have to pay up to RM200 to help foot the bill.

Now, some of the medicine can be bought for as low as RM30.

The Health Ministry (MoH) said the prices of these once-expensive drugs have dropped by more than two-thirds at least, which it attributes to the new government’s move to liberalise the supply side.

Health Minister Datuk Seri Dzulkefly Ahmad claimed eliminating the monopoly helped encourage competition.

Under previous Barisan Nasional (BN) administrations, the Pakatan Harapan (PH) leader said most drug supplies were sourced from crony vendors.

“Previously, some of the products were single sourced i.e. no other competitor in the market,” Dzulkefly, who is also Amanah’s MP for Hulu Selangor, told Malay Mail.

“For the public or government sector — during tender process — we get better pricing for products when there is no monopoly. The drop in price is between 76 and 88 per cent.”

ART is a type of HIV treatment that uses antiretroviral medicine to treat HIV infection by inhibiting the virus and blocking its growth.

This, in turn, helps strengthens a patient’s immune system, as well as slow and stop symptoms and prevent HIV transmission to others.

The medication therapy is recommended because it helps patients live longer and healthier lives.

And doctors often encourage HIV patients to start ART as soon as possible, particularly for those who are pregnant, have AIDS, certain HIV-related illnesses and co-infections, and early HIV infection (defined as the period up to six months after infection with HIV).

But ART drugs are known to be expensive. A box of 600 mg tablets of Efavirenz, a Non-Nucleoside Reverse Transcriptase Inhibitors (NNRTIs), for example, can cost up to US$894 (RM3,700). Most HIV patients require a combination of two or more types of drugs.

In Malaysia, these drugs are mostly subsidised. But because ART requires strict adherence to be effective, MoH only pays in full for medicine dispensed to patients in the first phase of treatment. For patients who are compliant, the medicine continues to be given free.

Those who fall off the regimen or carry a more advanced HIV will need to move on to a different ART phase that requires different drugs.

At that point, patients will have to start paying for medication and the more advanced the HIV phase, the more expensive the drugs become.

For advanced stage HIV-positive patients, the seismic dive in ART drug prices came not only as a huge relief, but gave them renewed hope as cheaper medication means more now have access to treatment.

“I started taking the medication after my immune system took a turn for the worse. My CD count was only in the single digits so technically, I had AIDS with all its complications,” said one patient, referring to the number of white blood cells which fight and destroy any virus.

“Hospitalisation was inevitable. Medication then was only the 12-hour type. It was a worrying time but luckily, I had an excellent team at University Hospital looking after me.”

The same patient said ART drugs helped him clear the threshold of AIDS, and today his viral load is undetectable.

But he stressed that this “is a lifelong journey and following the instructions given by the doctors is vital.”

The PH administration reviewed the medicine supply tender system shortly after taking power last year, in what was seen as an attempt to eliminate the entrenched patronage that has long gripped the public healthcare sector.

Charles Santiago, DAP Member of Parliament for Klang, estimated procurement middlemen acting for the Health Ministry have cost taxpayers between RM3.7 billion and RM4.8 billion.

But as the government now looks to introduce price controls for medicine, pro-market groups claim such a move could undo what progress has been achieved by liberalising supply.

Galen Centre for Health and Social Policy, an independent research and advocacy organisation, for one, argued that price controls could hurt local pharmaceutical firms that manufacture generics.

Already bogged down by the high cost to produce bioequivalent generics, producers are likely to forego innovation and focus production only on in-demand drugs to recoup expenditure.

“Regulatory compliance already requires generics to be bioequivalent, which is costly, up to RM1 million per drug,” Galen Centre said in a policy paper published earlier this week.

“Restricting the industry’s ability to recover such expenditures and investments through its pricing strategies, constricts and discourages local innovation and private sector investment in the local generics industry.”

And the move could have a detrimental effect across the entire health care sector, the group added.

Private hospitals and clinics, community pharmacists, wholesale distributors and tender agents will likely see operation costs and profit margins take a hit if the government keeps the price of medicine too low, the paper suggested.

But those in favour of price controls would likely disagree. Santiago, responding to Galen Centre’s study, said how pharmaceutical firms price their drugs has always been a grey area.

“They always claim the cost comes from R & D,” the Klang MP told Malay Mail.

“But the truth is they spend a third on marketing and promotion. That’s where most of the cost is.”

And MoH itself has yet to finalise a pricing mechanism. Deputy Health Minister Dr Lee Boon Chye told Malay Mail that talks with stakeholders — including pharmaceutical companies — are still ongoing.

“I cannot comment on the paper because we are still consulting everyone,” Lee said.

For now, MoH seems keen on the “price reference” model already adopted by richer countries like Germany, Spain and the United Kingdom.

Dzulkefly said in May the MoH will likely use external reference pricing to benchmark medicine prices in Malaysia against cheaper drug prices in certain countries, so that local drug prices do not exceed the benchmark.

The countries that will be referenced have yet to be decided.

Price reference entails some form of but not total control, which means drug prices would still be floated according to indexed prices.

Those supportive of price referencing said governments usually consider prices that would still give industry players a profit.

Health Director-General Datuk Dr Noorhisham Abdullah in a brief interview with Malay Mail suggested the PH administration remains keen to keep the supply side competitive despite its plan to regulate prices.

“As long as we embrace competitive market pricing, we can bring down the cost of medicine,” he said.

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