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Research Paper
JPHSR 2012, 3: 103–107
© 2012 The Authors
JPHSR © 2012 Royal
Pharmaceutical Society
Received November 16, 2011 A study comparing the retail drug prices between Northern
Accepted November 17, 2011
DOI Malaysia and Australia jphs_80 103..107

10.1111/j.1759-8893.2011.00080.x
ISSN 1759-8885
Mohamed Azmi Hassalia, Asrul Akmal Shafiea,
Zaheer-Ud-Din Babarb and Tahir Mehmood Khanc
a
Discipline of Social and Administrative Pharmacy, School of Pharmaceutical Sciences, Universiti Sains
Malaysia, Penang, Malaysia, bSchool of Pharmacy, Faculty of Medical & Health Sciences, The University of
Auckland, Auckland, New Zealand and cDepartment of Pharmacy Practice, College of Clinical Pharmacy,
King Faisal University, Alahsah, Kingdom of Saudi Arabia

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Abstract
Objectives The current study aims to compare the retail prices of the 10 most prescribed
drugs in Northern Malaysia and Australia.
Methods A cross-sectional study was conducted to compare the retail prices of the 10 most
used prescription medications in Penang, Malaysia, with the retail prices of the same drugs
in Australia. Data collection was done using a standard form. Percentage difference was
calculated using simple mathematical formulae in Microsoft Excel.
Key findings Findings demonstrate that the mean retail drug prices in Penang, Malaysia,
were 30.30–148.28% higher than the mean retail prices in Australia. In addition, variation
between retail prices was also noticed between pharmacies in Penang, with a difference
between highest and lowest of 80%.
Conclusion Malaysia has average higher retail prescription drug prices compared to Aus-
tralia due to the lack of pharmaceutical market regulation, which could impose limits on
prices, profits and total spending on pharmaceuticals.
Keywords Australia; comparison; Malaysia; retail prescription price

Introduction
Prescription drug expenditures are one of the fastest growing components of national health
budgets.[1] Price is clearly one of the greatest barriers to the access to essential drugs.[2] It has
been reported that the purchase of medicines contributes significantly to the healthcare
budget of developing countries and that drug expenditures may account for 50–90% of
non-personnel costs.[3] Furthermore, cost-related underuse among the non-insured popula-
tion is very common; even small increases in drug prices can dramatically affect medication
adherence among the poor.[4]
Globally different schemes are implemented to regulate drug prices; for example France
and Italy regulate drug prices directly through price control. However, Germany and Japan
maintain price control indirectly through reimbursement under social insurance schemes. In
Britain the National Pharmaceutical Pricing Authority monitors prices through the Pharma-
ceutical Price Regulation Scheme, which controls the prices of branded prescription medi-
cines by regulating the profits that companies can make on sales.[5]
Conversely, the Malaysian health sector lacks pricing control, and a ‘price deregulation
system’ is employed in which manufacturers, distributors and retailers set medicine prices
without government interference. Indeed, due to deficient price control medicine prices in
Malaysia have been reported to be escalating even faster than in the developed world.[6–8] In
the private health sector drug prices are considerably higher because doctors are allowed to
dispense and prescribe medicines and they tend to charge higher mark-ups. Furthermore,
mark-ups are also known to be higher in the pharmaceutical supply chain, contributing to
Correspondence: Mohamed high drug prices overall.[9]
Azmi Hassali, Discipline of Social In addition to price deregulation, which occurred in 1994, the Malaysian government
and Administrative Pharmacy, has approved a privatized drug-distribution system for public health care facility. It was
School of Pharmaceutical
Sciences, Universiti Sains
believed that this system would help to reduce administrative and financial burdens and
Malaysia, Penang, Malaysia. would ensure an efficient healthcare sector and facilitate the economic growth.[10] Unfortu-
E-mail: azmihassali@usm.my nately, the predictions for this ‘free market economy’ went wrong and immediately after the

103
104 Journal of Pharmaceutical Health Services Research 2012; 3: 103–107

privatization of the distribution system a substantial increase Table 1 Drug category based on indication and poison schedule
of about 3.3-fold was observed in medicine costs.[11] Recent
Drug category Drugs investigated Poison list
studies confirm the sustained increasing trends in the price of
in this study
certain essential medicines like anti-infective and cardiovas-
cular agents.[5,7,8] Perhaps in the public sector the variation in 1 Analgesic (non-steroidal Diclofenac Group C
prices can be controllable because the chain of command is anti-inflammatory drugs)
managed by the Malaysian Ministry of Health. However, due 2 Anti-asthmatic agent Salbutamol Group C
to the occasional scarcity of medicines that sometimes occurs 3 Antidiabetic agent Metformin Group C
and the long waiting hours at public outlets many people Gliclazide Group C
4 b-Blocker agent Atenolol Group B
prefer to seek health care from dispensing doctors or private
Metoprolol
hospitals.[12] It is evident that in the private sector (i.e. private 5 Calcium-channel blocker Amlodipine Group B
hospitals, clinics, physician-operated dispensaries and com- Nifedipine Group B
munity pharmacies) there are major variations in drug prices. 6 Dyslipidaemic agent Atorvastatin Group B
It is woeful to see that many generic medicines were found to

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Simvastatin Group B
be more costly at clinics run by dispensing doctors when
compared with the price of the drugs at local pharmacies.[5] In
spite of these documented cases, it is distressing to see that
Malaysian government authorities and the pharmaceutical In Australia, there are four types of price available for
industry claim that medicine prices in Malaysia are reason- prescription products: Private, National Health Scheme, Con-
able. It remains a mystery why the authorities are not willing cession and Safety Net. The Private and National Health
to acknowledge the price differences, which are mainly due to Scheme prices are open to the public and customers can
the lack of a pricing policy. Previous studies focusing on the choose whichever prices suit them best. However, Concession
cost of medicines in Malaysia have made the comparison at and Safety Net require one to have the appropriate entitlement
the national level only. So far, no price comparison has been cards to qualify for the marked price. Based on the present
made with developed nations that have implemented a pricing health scheme in Australia, the prices of all prescriptions are
policy. It can be assumed that, if made, such comparisons listed as Pharmaceutical Benefits Scheme (PBS) prices. These
would be helpful in drawing the attention of the authorities to prices are set by the government and under current legislation
this critical issue in healthcare costs. cannot be discounted. If the price does not appear in the PBS
The current study compared Malaysian drug prices with field, the prescription is only available as a Private prescrip-
those of a developed nation, Australia. However, both coun- tion. Private prescriptions are those not subsidized by the
tries have different health and economic indicators and gross government, leaving the patient to pay the full price for the
national product (GNP) per capita, but the preliminary data prescribed item.[13]
will be helpful to see the price disparities. This study aims to To ensure the uniformity of the data a standard data-
compare the retail prices of the 10 most prescribed medicines collection form was designed. The entire range of data in
between Malaysia and Australia. This will be the first study to each case (i.e. brand name, company name, dose strength
draw the attention of the Malaysian government authorities and retail selling prices) was considered to make the com-
and pharmaceutical industry to the retail price differences parison. The medicines included in the study were divided
between countries which do have a drug policy and those into groups based on their indication and poison schedule
which do not have one. (Table 1).
The medicines that were included in the study are listed in
Table 2. The differences in retail prices between Malaysia and
Method Australia are stated in terms of percentage per unit dose.
A comparative study was planned to calculate the percentage
price differences in retail prices of the 10 most utilized medi- Results
cines in Malaysia with the prices of similar products in Aus-
tralia. Three main areas were defined in Penang State (a state The mean retail prices per dose of 10 out of the top 20 most
in Northern Malaysia): Bukit Jambul, Pekaka and Bayan purchased drugs in Malaysia were compared with the mean
Lepas. Twenty-five pharmacies were approached by conve- prices per dose of three large retail pharmacy stores in Aus-
nience sampling from these three places. Of these, five were tralia. The prescription drug prices were collected from 20
dropped because the pharmacist was not willing to share the retail pharmacies in Penang while the retail prescription drug
actual retail prices of medicines. prices of Australia were obtained online.
The retail selling prices in Australia were obtained online, Comparison based on the mean price difference revealed
by taking the average selling prices of the three most famous that retail price of the selected medicines in Malaysia were
retail pharmacy chain stores in Australia; that is, Chemist higher than the retail price in Australia. The lowest mean
Warehouse, Terry White Chemist and My Chemist. Chemist price percentage difference noted was 30.30% for Noten®
Warehouse is the largest pharmacy retailer in Australia while (atenolol) 50 mg tablet and the highest was 148.28% for
Terry White Chemist is an Australian-owned pharmacy group Betaloc® (metoprolol) 50 mg tablet. Detials about the com-
with over 150 franchises.[13,14] My Chemist is a group of inde- parative percentage differences are shown in Table 2.
pendent pharmacies with over 40 stores in Victoria, New Furthermore, standard deviations and mean and median
South Wales and South Australia.[15] retail prices of the 20 selected pharmacies in the state of
Drug prices in Malaysia and Australia Mohamed A. Hassali et al. 105

Table 2 Retail prescription drugs price differences between Australia and Malaysia

Brands (prescription drugs) Number of Mean retail Malaysian price relative Manufacturer
retail pharmacies price per dose* to Australian price
in Penang selling MYR AUS Price difference % Difference (Malaysia
the drug
(in MYR) compared with Australia)

1 Norvasc® (amlodipine) 10 mg 20 3.34 2.17 1.17 +53.91 Pfizer


tablet
2 Lipitor® (atorvastatin) 20 mg 19 5.07 3.12 1.95 +62.50 Pfizer
tablet
3 Glucovance® (metformin+ 16 0.79 0.38 0.41 +107.89 Merck Serono
glyburide) 500/5 mg tablet
4 Diamicron® (gliclazide) 80 mg 17 0.91 0.48 0.43 +89.58 Servier
tablet

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5 Noten® (atenolol) 50 mg tablet 18 0.86 0.66 0.20 +30.30 Alphapharm/Merck
6 Ventolin® nebuliser (salbutamol) 7 4.31 2.29 2.02 +88.21 GlaxoSmithKline
2.5 mg dose
7 Voltaren® (diclofenac) 50 mg 15 1.52 1.05 0.47 +44.76 Norvatis
tablet
8 Adalat LA® (nifedipine) 60 mg 12 3.49 2.45 1.04 +42.45 Bayer HealhCare
tablet
9 Zocor® (simvastatin) 80 mg 9 4.71 3.31 1.40 +42.30 Merck Sharp and
tablet Dohme
10 Betaloc® (metoprolol) 50 mg 16 0.72 0.29 0.43 +148.28 AstraZeneca
tablet

*Conversion rates based on international exchange rate on 14 August 2010: 1 AUS=2.83042 MYR.

Table 3 Comparison of retail prescription drug prices in Malaysia

Brands (prescription drugs) Maximum price Median price Minimum price Mean price Standard
per dose (MYR) per dose (MYR) per dose (MYR) per dose (MYR) Deviation (SD)

1 Norvasc® (amlodipine) 10 mg tablet 8.67 2.82 1.60 3.34 1.76


2 Lipitor® (atorvastatin) 20 mg tablet 7.17 4.50 3.83 5.07 1.04
3 Glucovance® (metformin+glyburide) 1.39 0.78 0.53 0.79 0.23
500/5 mg tablet
4 Diamicron® (gliclazide) 80 mg tablet 1.10 0.90 0.58 0.91 0.12
5 Noten® (atenolol) 50 mg tablet 0.50 0.30 0.23 0.86 0.07
6 Ventolin® nebuliser (salbutamol) 2.5 mg dose 4.40 4.40 4.00 4.31 0.14
7 Voltaren® (diclofenac) 50 mg tablet 2.67 1.20 0.30 1.52 0.52
8 Adalat LA® (nifedipine) 60 mg tablet 4.86 3.40 2.40 3.49 0.60
9 Zocor® (simvastatin) 80 mg tablet 6.60 5.00 1.20 4.71 1.61
10 Betaloc® (metoprolol) 50 mg tablet 0.83 0.73 0.60 0.72 0.07

Penang were also calculated to see the possible retail price mark-up price for the Bukit Jambul region was found to be
differences between the pharmacies in Penang (Table 3). The higher than for the pharmacies in other regions. Details about
price of calcium-channel blocker Norvasc® (amlodipine) was the price variation of the selected medicines in the three
highly variable within Penang (MYR3.34⫾1.76). Interest- regions are given in Table 4.
ingly, other antihypertensive medicines (i.e. Noten and
Betaloc) were found to be less variable in terms of retail price Discussion
(SD ⫾0.07). It was also noticed that for some drugs the price
of a unit dose was exceptionally high. The highest retail This was perhaps the first study in Malaysia to compare the
mark-up price for Norvasc was MYR8.67 per 10 mg tablet, price of medicines with those in a developed country. In
and for Lipitor® (atorvastatin) the highest price was Malaysia, drug prices vary across the country. As there is a
MYR7.17 per 20 mg tablet. See Table 3. lack of generic medicines on the National Essential Drug List
Moreover, to see the price variation for the selected drugs and the Drug Formulary in the public sector, patients buy such
in the state of Penang, mean prices were compared among the medicines from private sector outlets such as retail pharma-
three regions (Bukit Jambul, Pekaka and Bayan Lepas) from cies. Unfortunately, due to the absence of a national drug
which the pharmacies were selected for data collection. pricing policy it is hard for the public to get essential drugs at
Overall, every region has its own prices. However, the the same price across the country.[16] Cross-national differ-
106 Journal of Pharmaceutical Health Services Research 2012; 3: 103–107

Table 4 Comparison of retail mean prices among three areas in Penang

Brands (prescription drugs) Mean retail price per dose (MYR)


Bukit Jambul Pekaka Bayan Lepas
®
Norvasc (amlodipine) 10 mg tablet 3.65 2.84 3.36
Lipitor® (atorvastatin) 20 mg tablet 5.33 4.88 5.08
Glucovance® (metformin+glyburide) 500/5 mg tablet 0.79 0.81 0.79
Diamicron® (gliclazide) 80 mg tablet 0.94 0.77 0.95
Noten® (atenolol) 50 mg tablet 0.34 0.35 0.30
Ventolin® nebuliser (salbutamol) 2.5 mg dose 4.20 4.29 4.40
Voltaren® (diclofenac) 50 mg tablet 1.03 0.69 1.52
Adalat LA® (nifedipine) 60 mg tablet 3.68 3.16 3.61
Zocor® (simvastatin) 80 mg tablet 5.00 4.87 4.82
Betaloc® (metoprolol) 50 mg tablet 0.73 0.72 0.71

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ences in pharmaceutical prices are of great interest around the dispensing doctors and community pharmacists. In our
world. Cross-national price comparisons for pharmaceuticals current study sample it was seen that there was a major varia-
enable policy makers to draw conclusions about differences in tion in price in the three regions that were selected for the
average price for individual products, and allow governments study from Penang. It was surprising to note that the variation
to set domestic prices.[17] in the prices of medicines was mainly dependent on the pur-
Based on the price comparison, this study reveals that chasing power of the residents. Pharmacies in Bukit Jambul
retail prescription drugs in Penang pharmacies generally were found to sell the medicines at higher prices than the other
cost more than the same drugs in Australian pharmacies. regions. Overall, the pharmacies in Penang were found to
The minimum variation noted in price was 30.30%, while have different mark-ups on individual products. Lack of
the maximum was 148.28%. It has already been documented monitoring or responsibility from the government and regu-
that in Malaysian private pharmacies and in the clinics of latory authorities results in a situation where manufacturers,
dispensing doctors innovator-brand drug prices were 16 distributors, dispensing doctors and community pharmacists
times higher than the international reference drug prices can sell the medicines on their desired price to maintain
(IRP), while generic drugs were 6.6 times higher.[18] The normal supply and demand.[5]
current results have clarified that in developed countries like Access to affordable and lower-priced medicines are
Australia drug prices are controlled for the public’s conve- the aims of the National Medicine Policy of Malaysia. The
nience and in Malaysia, due to the lack of drug-pricing National Medicine Policy states that drugs shall continue to be
control policies, people pay higher prices to gain access to exempted from taxes and import duties to help maintain the
essential medicines.[8] The main reason behind this price prices at the lowest possible level.[27–29] However, in the phar-
variation is the mark-up on the sale of medicines. Malaysian maceutical market the free market strategy alone may be
retail pharmacies mark-up about 25–38% on innovator unable to control the prices in Malaysia. High drug prices
brands and 100–140% on generic medicines,[19] which makes have been an issue in Malaysia since the 1980s when the
medicine in Malaysia more expensive than in other devel- government abolished 5% surtax and 5% duty in order to
oping countries like India and Sri Lanka. On the other hand, reduce the cost of drugs. However, the prices remain higher
the pharmacy mark-up in Australia is a paid by the Austra- and the issue arose again in 1990s when non-governmental
lian Government to pharmacists for supplying the medicine. organisations acting in the public’s interest complained of
On average, the Australian mark-up varies from 4 to 15%, increasing drug prices.[5,30] The current drug-pricing issues
which far lower than that of the Malaysian pharmacy mark- highlight the need to implement a medicine pricing policy and
up, which results prices variation in every community phar- a price-monitoring system in Malaysia. By doing so, the
macy outlet.[20] For example, a higher price deviation was Malaysian government can ensure access to cost-effective
noticed for Norvasc (amlodipine). The highest price and the treatment for its citizens.
lowest price per unit dose differed by 80%. Furthermore, in
five retail pharmacies that we approached the pharmacist
was not willing to reveal the actual selling price or recom- Limitations
mended selling price of the prescription drugs. In addition, A small sample size is one of the major limitations of this
there is no interference by the government in the sale of study. Therefore, these findings cannot be generalized for the
medicine, allowing all manufacturers, distributors and retail whole of Malaysia. Secondly, this study has only compared
pharmacists to fix the prices for all medicines.[21,22] On the brands that are manufactured by the multinational drug com-
other hand, in developed nations, due to pricing regulations panies. Generic medicines marketed and distributed by local
and government subsidies,[23–25] medicines are available at and international pharmaceutical firms can be compared with
affordable prices to the public.[26] the Australian generics to further clarify the in-depth cost
Overall, it would be appropriate to say that the concept of variations. Furthermore, this study has not included any dis-
‘free market economy’ in Malaysia has placed the monopoly count that may be given by the pharmacist to permanent
of medicine sales in the hands of manufacturers, distributors, customers.
Drug prices in Malaysia and Australia Mohamed A. Hassali et al. 107

Conclusion health for all-now. Privatisation, Quality & Rights Proceedings


of the Asia Pacific Consultation on Quality of Health Care Ser-
Drug-pricing control and subsidy by the government to phar- vices; Madurai, India, 11–14 December 1996: 4–33.
macies were the two main factors resulting in low retail prices 11. Izham M et al. Drug distribution system in Malaysia: the priva-
of drugs in Australia. Overall, it is seen that due to the lack of tization of the general medical Store. National Conference on
these two factors in Malaysia retail drug prices are higher. Privatization & Health Care Financing in Malaysia; Penang,
Furthermore, every pharmacy has its own percentage mark-up Malaysia; 5–6 April 1997.
12. Moe S, Khin Saw Naing D. Health care financing: consumers’
and prices were found to vary based on the purchasing power
perspectives. Arch Pharm Pract 2011; 2: 47–49.
of residents in Penang. 13. Chemist Warehouse. Chemist Warehouse profile. www.
chemistwarehouse.com.au/aboutus/prescriptions.asp (accessed
Declarations 28 August 2010).
14. Terry White Chemists. Terry White Chemists profile. www.
Conflict of interest terrywhitechemists.com.au/about-us (accessed 28 August 2010).
The Author(s) declare(s) that they have no conflicts of interest 15. Mychemist Group. Mychemist Group profile 2008.

Downloaded from https://academic.oup.com/jphsr/article/3/2/103/6096403 by guest on 02 July 2023


www.mychemist.com.au/company-profile/default.aspx?none
to disclose.
(accessed 28 August 2008).
Funding 16. Hassali MA, Shafie AA. Price comparison between innovator
and generic medicines sold by community pharmacies in the
This research received no specific grant from any funding state of Penang, Malaysia. J Generic Med 2008; 6: 35–42.
agency in the public, commercial or not-for-profit sectors. 17. Patricia MD, Jeong DK. International price comparisons for
pharmaceuticals. Pharmacoeconomics 1998; 14: 115–128.
Acknowledgements 18. Babar ZU et al. A survey of medicine prices in Malaysia by using
The authors would like to acknowledge the following third WHO/HAI methodology. Research Report. Penang, Malaysia:
year pharmacy students for help with the data-collection UCSI-USM, 2005.
phase: W.Y. Mak, Y.H. Ng, J.H. Ong, S.C. Wong, S.S.N. Tan, 19. Consumer Association of Penang. High Cost of Medical Care.
The Money Book. Penang: Consumer Association of Penang,
S.K. Salleh, M.A. Hasan, M.B. Daim, N.J. Ali, O. Yahya, M.
2004: 184–185.
Masrus, M.I. Nasaruddin, A.S. Baharudin, N.W.N. Rahimi 20. Australian Government Medicare Australia. Pharmacy mark-up.
and A. Husin. 2010. www.medicareaustralia.gov.au/provider/pbs/pharmacists/
pricing.jsp (accessed 28 August 2010).
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