Pharmaceutical Association of Malaysia (PhAMA) Proposes ‘Value-Based Pricing’

Pharmaceutical Association of Malaysia (PhAMA) Proposes ‘Value-Based Pricing Approach’ To Help Improve Patient Access in Malaysia


PhAMA_ (L-R) Dr Ait-Allah Mejri, First Vice President of PhAMA, John McKendry, President of PhAMA, & Professor Dr Kenneth Lee, School of Pharmacy, Monash University Malaysia

Shift to Value Pricing and Patient-Centric Care Critical to Increase Economic Sustainability of Malaysia’s Health Care System

PETALING JAYA, 24 November 2016 – The Pharmaceutical Association of Malaysia (PhAMA) today recommends that health authorities in Malaysia review their current approach in evaluating new or innovative drugs by focusing on value that encompasses better patient outcomes and quality of life. The recommendation was made in conjunction with the presentation of PhAMA’s white paper “Value Pricing for Improved Patient Access in Malaysia” at the Health Economics Forum organized by Monash University Malaysia Campus. PhAMA’s latest paper aims to serve as a guide for future value-based assessment of pharmaceuticals that draws on the lessons learned from the current reimbursement practice for innovative medicines in Malaysia’s public health care institutions and from the implementation of new pricing and reimbursement models in developed countries.

The research paper highlights areas for improvement in the current assessment models in Malaysia so that the right drug gets to the right patient at the right time, and thus recommends a Value-Based Pricing (VBP) model as a viable new approach towards a patient-centered, value-driven and more sustainable health care system.

Over the past years, challenges to Malaysia’s health system have intensified with unprecedented pressures linked to ageing population, change in disease burden and rising costs. A recent study has shown that up to 45 percent of hospital patients in Malaysia face financial catastrophe as a result of high direct out-of-pocket (OOP) payments. Against this backdrop, all stakeholders concur that a new evaluation of the situation is essential if Malaysia wants to meet its 2020 objectives of sustainable and equitable access to quality care both at the societal and individual levels.

Pharmacist chemist woman working in pharmacy drugstore

“Discussions about costs are important. No patient should have to worry about whether they can afford the care they need. At the same time, it is important to look at costs across the health care system and not just the share going toward life-changing medicines,” said John McKendry, President of PhAMA. This paper is an important part of an ongoing multi-stakeholder initiative to advance health care solutions that focus on the patient and support better value. In particular, the white paper outlines five principles that PhAMA believe are essential to the success of the government’s plan to prioritize value improvement in health care delivery and for future evaluation of the cost-effectiveness of new medicines.

The FIVE principles are:

  1. To promote “Equity, Efficiency and Effectiveness” in the context of health care decision-making and health outcome measurements in Malaysia.
  2. To review the threshold approach that is currently being applied in Malaysia (and its associated challenges).
  3. To consider new frameworks like Multi-criteria Decision Analysis that could offer an improvement on the use of simple thresholds and its relevance to Malaysia.
  4. To implement managed entry agreements and patient assistance programs.
  5. To drive more multi-level engagement, government-innovative industry collaboration and leadership.
Colorful illustrated foreground silhouette of people in a meeting
Meaningful engagement with other stakeholders including patients, providers, payers and researchers

PhAMA supports the use of sound evidence for informed decision-making in health care. “Our participation in the conversation about value assessment will not end with the release of our value-pricing white paper. In fact, our work has just begun and this will open the conversations between industry and government with patient outcomes in mind,” added Mr McKendry. Moving forward, PhAMA is firmly committed to meaningful engagement with other stakeholders including patients, providers, payers and researchers, to incorporate and transfer core principles presented in the white paper to practical solutions for patients in Malaysia.