Submission by the Consumers Association of Penang (CAP)
on the Implementation of Mandatory Sale Price Display for Medicines
For a long time, CAP and many other consumer groups have been calling for the mandatory display of the selling price of medicines sold in all healthcare facilities.
We are pleased that this policy will finally be implemented, as it has been extremely unfair to consumers and patients when certain types of healthcare facilities, such as private clinics and hospitals, have been allowed to practise non-upfront price disclosure to consumers.
The Medicines Price Monitoring Survey in Malaysia 2017 and 2020 have repeatedly found that medicines sold in private clinics and hospitals are among the most expensive. We believe that there is a causal link between the current practice of non-upfront price disclosure and high mark up. In 2020, the median markup rate for originator and generic drugs in private hospitals with inpatient facilities was 117.1% and 233.5%, respectively, while in private clinics it was 45.8% and 142.3%, respectively.
We believe that the market can only work well for society if there is price competition, comprehensive and accurate information, adequate and timely supply (of medicines) and consumers (patients) can make informed choices. This is not the case in the current pricing situation in private clinics and hospitals.
We are puzzled as to what makes medicines so special that for such a long time these manufactured goods have been given special treatment for retailers not to display prices, while we do not know of any other manufactured goods that have 'enjoyed' such a similar status. At a time when even most services in the commercial world display prices, we do not understand why private clinics and hospitals cannot do the same.
Technically, it is certainly no excuse that they cannot produce a comprehensive list of medicines for price display, even digital ones would do. In addition the prices of their other non-medical products and services have not even been included in any price regulation policy discussion. Why is it not a technical problem? Because the APHM and MMA claim that their members have long practised detailed billing or are able to provide a price breakdown on request for a detailed receipt. This shows that all the price information is already in the system, so there is no reason for APHM and MMA to not display the prices up front?
Detailed billing is only what consumers expect, it is not the full picture of price transparency. For example, if price display is not mandatory, would a consumer be willing to go into a restaurant without the price of the food being displayed and only get the detailed bill later when you pay? Pricing is the first fundamental step in consumer protection, both sides have to agree on a price BEFORE the transaction takes place, before it can be called fair.
No one would call a price list in a restaurant menu a form of advertising, it goes against the basic understanding of advertising. The concern of some health professionals expressed in the consultation on 2 November has no basis or logic .
In most cases, the practice of not displaying prices would conceal profiteering conduct , as government agencies and consumers can only prove profiteering if previous prices and dates are known. As a consumer group CAP strongly supports that medicines should not be treated differently from other market products when it comes to price display and transparency.
During the 2 November consultation, a representative of a private hospital claimed that there are situations, for example in an emergency, where only the in-patients know which medicines are used to treat them, price labelling at the bedside will make no difference. This is a very misleading argument that ignores many other scenarios where patients do have time to plan and decide where to go for treatment and where to buy medicines.
Some argue that medicines are only one part of the total cost of healthcare, so why focus on that? We urge them to look at cancer medicines in particular, where the patients concerned face financial catastrophe, such medicines are not 'only a part' of the total cost of treatment.
Also, with the price display mechanism in place, effective and convenient price comparison is possible, and this would put the onus on retailers not to set an exorbitant price (and hope that patients will foot the bill afterwards) and let the market moderate the range and let consumers make an informed decision with the available price information.
Community pharmacies are unhappy with the practice of price dumping of medical products by the large chain pharmacies, and we believe that with the mandatory price display mechanism, this kind of market behaviour would be easily exposed and tantamount to anti-competitive practices, and would be subject to investigation by the Malaysian Competition Commission. Consumers may choose convenience and familiarity over a small difference in the price of medicines, similar to other commercial products sold by the local community.
The mandatory price display mechanism and policy is truly long overdue but a fundamental element for fair market competition and consumer protection. We firmly believe that this policy is non-negotiable and will definitely be an effective market intervention to moderate excessive profits and predatory pricing by private clinics and hospitals.
This policy is one of the most basic and achievable to meet
the expectation of the National Medicines Policy (DUNAS) where it explicitly
states that there is a need for a medicine pricing mechanism across the public
and private sectors to ensure reasonable and affordable pricing, price
transparency and that the cost of medicines will not be the barrier to access
to medicines for the rakyat.
