Drug price display – at what price?

IN a healthcare system stretched by inflation and frayed by mistrust, Malaysia’s new ruling mandating the display of drug prices in private clinics and hospitals is more than a regulatory update – it’s a flashpoint in a long-brewing debate over fairness, access, and survival in medicine.

Effective May 1, the law – gazetted under the Price Control and Anti-Profiteering Act – requires all private healthcare providers to clearly display medicine prices.

Non-compliance may result in fines of up to RM50,000 for individuals and RM100,000 for corporate entities.

To consumer advocates, it’s a long-overdue move. To some doctors, it’s a step too far.

At the heart of the issue is a crisis no one disputes: medical inflation hit 15% in 2024, a historic high.

For years, Malaysians have been grappling with rising healthcare bills, made worse by opaque pricing and inconsistent practices in the private sector.

The government says the new ruling will empower patients. By making drug prices visible, consumers can compare costs, demand fairness, and avoid being blindsided at the checkout counter.

The Federation of Malaysian Consumers Associations (Fomca) calls it a breakthrough.

“Consumers deserve to know what they’re paying for and have the right to choose,” says president Marimuthu Nadason. “This is a matter of pricing and doctors have gone scot-free for too long.”

“Why are doctors or medical practitioners afraid of transparency? Lawyers march to Putrajaya for justice, but doctors march to Putrajaya for profits.

“We are happy the minister has implemented the new rule and made sure it is mandatory and should not backtrack on this ruling. Consumers should know what they are paying for,” he tells StarBiz 7.

But not everyone is cheering.

The Malaysian Medical Association (MMA) responded with a rare protest march to Putrajaya – not against transparency, they insist, but against the way it’s being enforced.

MMA argues that drug price display rule belongs under the Private Healthcare Facilities and Services Act, not under an anti-profiteering law meant for grocery shops and petrol stations.

It says it supports the principle of price transparency, but isn’t this new order about being transparent?

Are doctors or medical practitioners afraid of losing their seemingly lucrative business of dispensing drugs?

According to a survey, private clinics are charging between 23% and 75% higher for common and long-term medications compared to community pharmacies.

Doctors warn that medicine pricing is often used to cross-subsidise low consultation fees, especially for patients under third-party administrator (TPA) panels.

They fear that losing this revenue stream could threaten the viability of many clinics, with some saying up to half of them could shut down if margins are further squeezed.

“The higher prices of medicine dispensed at clinics are to make up for the low consultation fees and to compensate those patients that are covered by the ‘panels’.

“Most panels have a very low ceiling price that they can charge. Hence I believe they will charge others higher to compensate,” a doctor tells StarBiz 7.

“I am not saying it’s the right thing to do. The general practitioners (GPs) association has been complaining about the low fees for many years but nothing has changed.

“If they are allowed to charge consultation fees fairly, then go ahead and control prices for the medicine. If GPs are not able to sell medicine or lose income from selling, probably half of them will close shop,” he adds.

GPs are constrained by the consultation fees, which had been capped at between RM30 and RM125 depending on the severity of the patient’s condition.

It is true that doctors should be fairly compensated but not at the expense of patients.

Meanwhile, the Association of Private Hospitals of Malaysia (APHM) had previously recommended that member hospitals implement drug price transparency in outpatient departments by April 2025 to enhance cost transparency.

“What I’m made to understand is that the government’s intention in gazetting the order for medicine price display is to empower patients in making choices for out-of-pocket healthcare expenses.

“Like all regulations, many factors have to be taken into account to ensure that the order benefits the healthcare system as intended – the three-month grace period provided will give all stakeholders a chance to provide the government with feedback. Hopefully, the challenges faced during implementation, if any, can be addressed.

“APHM has urged all member hospitals to comply with the order and to compile feedback during the three-month grace period, ”APHM president Datuk Dr Kuljit Singh tells StarBiz 7.

Performative transparency

Doctors also warn that the ruling misrepresents the complexity of clinical care as medicine should not be reduced to a retail transaction which risks misleading patients and disrupting the doctor-patient relationship.

Regional chief executive (southern and eastern) at IHH Healthcare Bhd Dr Kamal Amzan reiterates that the doctors at the march are not against transparency, but “performative transparency”, stressing there is significant difference between the two terms.

Explaining to StarBiz 7, he says Act 586 – otherwise known as the Private Healthcare Facilities and Services Act 1998 and designed to regulate and control private healthcare facilities and services, ensuring patient safety, quality care, and accessibility – differs from Act 723.

“Act 586 governs the licensing and operational standards of private healthcare facilities, while Act 723 mandates price displays for medicines and services in ways that reduce complex medical care to retail-style transactions.

“That may look good politically, but it misleads the public and undercuts the very service being provided,” he points out.

Kamal says displaying prices without context suggests profiteering, when in reality, many private providers are already operating on razor-thin margins just to keep systems running and fill the gaps left by the overstretched public sector.

His concern is that the extra regulation would risk making care slower, more fragmented, and more transactional than therapeutic, especially if physicians are compelled to justify every item.

He says: “This would disrupt clinical flow and put administrative noise into the heart of care. Take antibiotics, for example. A physician chooses a specific drug based on clinical judgement - targeted at the most likely bug, considering resistance, allergies, and comorbidities.

“But a patient staring at a price list might ask, ‘Why not the cheaper one?’, without knowing that switching could be clinically inappropriate, or even dangerous.”

Kamal is worried the regulation could turn medicine into a debate over price tags, and not outcomes, and may delay decisions and risk confusion in moments where clarity matters most.

On the matter of comparing prices of the same medication, he notes that a medication may cost less at another hospital or a pharmacy, but these other premises may not have the infrastructure, clinical support, diagnostics, or specialists required to treat the patient’s condition in the first place.

“The cost of care is not just the pill, but everything built around it to ensure the right treatment, given safely and on time.

“What happens if a patient – or their insurer – insists on a transfer to chase a cheaper drug? And in the midst of that, the patient deteriorates? Who then bears the ethical, professional, and legal responsibility for that outcome?” Kamal asks.

While understanding that consumers want fairness and affordability, he feels that this needs to stem from systemic reform, proper financing models, and responsible policy, arguing that the next step for the government should be a serious, collaborative redesign of how care is billed and communicated.

This would ensure patients understand what they are paying for and why, without compromising the clinical experience.

“Most importantly, we must fix what was always meant to be the foundation, which is public healthcare. Strengthen the hospitals and clinics that were supposed to carry the weight of universal access.

“When they falter, the pressure shifts to the private sector – and then the blame does too,” says Kamal.

Meanwhile, an equity research head at a foreign house who is familiar with listed healthcare groups disagrees with the stance taken by the protesting doctors and private healthcare companies. He believes the new ruling will promote transparency and constitutes a small step in the right direction.

“Authorities should continue to take steps in promoting transparency in pricing, recognising the need for private practitioners to make money and also for the public to understand their costs,” he tells StarBiz 7, before acknowledging that the new regulation may mean private hospitals will see pricing pressures.

Meanwhile, an analyst with a local brokerage who focuses on health economics concedes that from the perspective of a consumer, mandating private healthcare facilities in Malaysia to display the prices of medicines has strong arguments in its favour, particularly given the context of soaring healthcare costs.

Balancing act

However, she says the fairness of the new regulation depends on balancing transparency with the operational realities of private healthcare providers.

Displaying medicine prices, she says, empowers consumers to make informed decisions about their healthcare.

“In Malaysia, where private healthcare costs have risen significantly – out-of-pocket spending accounted for 35% of total health expenditure in 2021, as per World Bank data – price transparency helps patients compare costs across clinics or pharmacies.

“This is especially critical for chronic disease patients who face recurring expenses,” she says.

In addition, the analyst points out that soaring healthcare costs, driven partly by unregulated pricing in the private sector, have strained Malaysian households, evidenced by a 2023 study by the Galen Centre for Health and Social Policy that revealed private hospital charges had increased by 10% to 15% annually, outpacing inflation.

As such, she says mandating price displays could deter arbitrary mark-ups on medicines, fostering competition and potentially stabilising costs for consumers.

On top of that, she is of the view that public reference pricing will also build trust between consumers and healthcare providers, suggesting that when prices are hidden, patients may suspect profiteering, especially in a system where private GPs often dispense medicines directly.

The analyst explains that clear pricing aligns with consumer rights to know what they are paying for, reducing disputes and enhancing accountability.

Moreover, she adds that Malaysia’s rising healthcare costs disproportionately affect lower- and middle-income households, who rely on private clinics due to long waits in public facilities.

“Transparent pricing enables these consumers to budget better or seek more affordable alternatives, addressing equity concerns in a country where public healthcare is underfunded, at approximately 4% of gross domestic product, well below the 6% to 7% average seen in comparable economies,” she observes.

On the other hand, the analyst understands the argument by private GPs that displaying prices, combined with high operational costs such compliance with regulations and third-party administrator fees, might force them to raise consultation fees or medicine prices to maintain viability.

Citing a 2025 MMA survey that indicated 60% of GPs are operating on thin margins, she says additional regulatory burdens could indirectly increase costs for consumers, negating the intended benefits.

Echoing Kamal’s point, she says that unlike retail goods, medicine pricing in healthcare involves variables like consultations, diagnostics, and dispensing fees, which may not be fully captured in a simple price list. Consumers might also misinterpret displayed prices as all-inclusive, leading to confusion or mistrust if additional charges apply.

“While price transparency helps, it does not address root causes of soaring healthcare costs, such as high import prices for medicines, rising operational costs for private facilities, or inadequate public healthcare funding.

“Consumers might see marginal savings but still face overall cost pressures,” she says.

Given her investigation into the matter, the analyst believes that the mandate is fair from a consumer standpoint, as it enhances affordability and trust in a costly system, but emphasises that its success depends on addressing providers’ concerns to prevent unintended cost increases.

“Consumers deserve clarity, but the policy must be part of a holistic strategy to tackle Malaysia’s healthcare cost crisis,” she says.