Can the Trans-Pacific Partnership Agreement Cripple Malaysia’s Healthcare System?


By Unny Sankar

I was coming out from a pharmacy after buying fever and cough medicine for my four year old son when I saw a poster by local Non-Governmental Organizations (NGOs) on the wall. It read that the Malaysian healthcare system was going to be shattered because the price of medicines was going to escalate beyond affordability. The Malaysian NGOs insist that if Malaysia signs the Trans-Pacific Partnership Agreement (TPPA), the price of medicine will soar and cripple our healthcare system. In fact it was reported in the local media that the NGOs were picketing right in front of the hotel where the trade negotiation was taking place.

The NGOs oppose the TPPA because they believed the price of drugs will skyrocket in and Malaysia will have less access to generic drugs. The NGOs were well-meaning, but they are wrong. On the contrary, the TPPA trade pact will increase the number of brand drugs in Malaysia as many developed countries that produce brand drugs are part of TPPA. And the TPPA will have no impact on the availability of generic drugs in Malaysia.

The TPPA is a free trade agreement between twelve member states comprising developed and developing countries. Among the countries of interest to Malaysia are United States, Australia, New Zealand, Canada, Chile and Singapore. The goal of this free trade agreement is to facilitate trade and investments in addition to liberalizing the economies of the participating countries. The negotiation were done secretively; none of the negotiated chapters or texts of the free trade agreement are available in the public domain.

The NGO’s principle concern is access to affordable drugs. According to the NGOs, prices will increase because of the adoption of stringent intellectual property rights provisions akin to those of developed nations. But in Malaysia, there are already thousands of generic drugs which are considerably cheaper than brand drugs and the TPPA will have no impact on the price and availability of generic drugs.

The NGOs also argue that trade negotiators are jeopardizing the healthcare system by not examining carefully the intellectual property rights provisions in TPPA. What the NGOs fail to acknowledge is that the Ministry of Health Malaysia conducts its consultations with all stakeholders to ensure that safeguards for domestic interests are in place. Therefore, any new intellectual property rights provisions for medicines have been scrutinized carefully to ensure access to affordable drugs. In addition to that, the intellectual property rights provisions negotiated in TPPA are only applicable to new medicines. When the patent protection is in effect for newer medicines, the medicine will be expensive whether or not there is a free trade agreement.

The patent protection term for all brand pharmaceutical products remains for 20 years and there can be no amendments to extend it. As a result, once an innovator drug has reached its 20th year of patent protection, generic drugs are allowed to enter the market and the price will be half or even lower than the original price. This environment creates a healthy competition between brand and generic drugs which eventually lowers the price of the brand drugs.

The Malaysian healthcare system relies heavily on generic medicines. The more new medicine that enters the Malaysian market after signing the TPPA the more varieties of generic medicines there will be once the patent protection term expires.

Rather than fighting the TPPA, NGOs should work hand in hand with the Malaysian pharmaceutical industry to capitalize on this ongoing free trade agreement. And they should pressure the Government to provide long term funds or grants for research and development in the field of pharmaceuticals so that new drugs are created in Malaysia. In this way, we will be able to create a clear path for research and development for medicine in Malaysia.

Currently Malaysia is only producing generic drugs, so there are no significant benefits to implementing stringent intellectual property rights. Nevertheless, I am sure that one day Malaysia will benefit from the stringent intellectual property rights provisions when brand drugs are produced by local pharmaceutical companies. It will certainly show the level of development we have achieved over the years. The TPPA is a win-win deal for Malaysia. Therefore the NGOs should put on their thinking cap and take advantage of this trade agreement for the betterment of our country.