KUALA LUMPUR: The United States' proposed tariffs of up to 200 per cent on imported generic medicines may reverberate far beyond its market, with industry experts warning of a major reshaping of global pharmaceutical supply chains, manufacturing strategies and investment flows.
While Malaysia has limited direct exposure to pharmaceutical exports to the US, the country could still feel the knock-on effects as manufacturers reassess production locations, supply networks and sourcing strategies.
This will potentially affect active pharmaceutical ingredient (API) supplies, production costs and medicine availability, they added.
The proposed policy includes a two-year zero-tariff transition period before tariffs of 100 per cent and later 200 per cent are imposed, with the objective of encouraging pharmaceutical manufacturers to relocate production to the US.
No Immediate Concern For Patients
Association of Private Hospitals Malaysia president Datuk Dr Kuljit Singh said the overall impact would depend on how the policy is ultimately implemented and how the global pharmaceutical industry responds.
He noted that trade measures and geopolitical conflicts inevitably disrupt supply chains and contribute to higher business costs.
"For now, however, there is no immediate cause for concern for patients receiving care at private hospitals.
"We will continue to monitor developments closely and work with our suppliers and partners to ensure the uninterrupted supply of essential medicines and the continued delivery of quality healthcare services," he told Business Times.
Long-term Risks Outweigh Short-term Opportunities
Galen Centre chief executive officer Azrul Mohd Khalib believes Malaysian pharmaceutical exporters with significant exposure to the US market could face considerable commercial challenges once the tariffs are fully implemented.
Although the US accounts for around 15 per cent of Malaysia's pharmaceutical exports, Azrul said the impact could be severe for companies dependent on that market.
"The indirect effects could be more significant, particularly if global manufacturers redirect products, investment and production capacity to other markets.
"This could intensify competition for Malaysian companies and disrupt established supply chains," he said.
Azrul also warned that Malaysia may eventually experience higher medicine prices if global pharmaceutical companies prioritise more profitable markets or if production costs continue rising.
"We are already seeing this happening due to the armed conflict around the Strait of Hormuz.
"Malaysia must strengthen local manufacturing and ensure medicine procurement considers supply security and resilience, rather than focusing only on the lowest price," he said.
Possible Disruption, Indirectly
Malaysian Medical Association (MMA) president Datuk Dr Thirunavukarasu Rajoo said it was still too early to determine the extent of any impact on medicine prices or access in Malaysia.
However, Thirunavukarasu said the global pharmaceutical supply chain is highly interconnected and any increase in manufacturing costs or disruption in the supply of APIs could create cost pressures across the supply chain.
"The actual impact on Malaysia will depend on how global manufacturers respond and how global supply chains evolve.
"The situation should therefore be monitored closely to ensure patients continue to have timely access to essential medicines," he said.
Thirunavukarasu said there is potential for indirect disruption if manufacturers reprioritise production, adjust supply chains or face higher production costs.
"While there is currently no evidence of widespread medicine shortages in Malaysia arising from these tariffs, it is important that any emerging supply issues are identified early before they affect patient care," he said.
Patients Remain Priority
Thirunavukarasu welcomed the Health Ministry's efforts to strengthen pharmaceutical supply chain resilience, including continuous monitoring of global developments and engagement with industry stakeholders.
He said proactive collaboration between regulators, healthcare professionals and manufacturers would become increasingly important should global pharmaceutical trade become more fragmented.
"Ultimately, while trade policies are shaped by economic and geopolitical considerations, they should never compromise patients' access to safe, effective and affordable medicines.
"Our shared priority must remain uninterrupted access to essential medicines for all Malaysians," he said.
No Immediate Direct Impact
Pharmaniaga managing director Datuk Zulkifli Jafar said the company does not currently export pharmaceutical products to the US and therefore expects no direct impact from the new tariff regime.
However, Zulkifli acknowledged that the global pharmaceutical supply chain remains highly interconnected and indirect implications could arise if suppliers or vendors are affected by the tariffs.
"We will continue to monitor these developments closely and engage with our suppliers to assess any potential impact on cost, availability and continuity of supply.
"Where necessary, we will review our sourcing strategies, identify alternative suppliers and maintain appropriate inventory levels for critical materials to strengthen supply resilience," he said.
He added that Pharmaniaga would continue investing in its pharmaceutical and biopharmaceutical manufacturing capabilities to support Malaysia's long-term medicine security and strengthen the resilience of the national healthcare system.