Pool purchasing to cut Asean’s medicine costs, strengthen supply, says expert

Malaysian pharmacists are optimistic that regional medicine purchasing could lead to significant cost reductions and increased supply resilience in Southeast Asia, according to pharmacy expert Amrahi Buang. Pooled medicine procurement by Malaysia's health, defense, and higher education ministries has already yielded an estimated 17.7% savings, or RM179.6 million, for the country.

Buang believes the strategy would be particularly advantageous for high-cost and orphan drugs for rare diseases, as small patient populations limit the bargaining power of individual nations. Consolidating demand within Asean could create larger order volumes, facilitating better negotiations with pharmaceutical manufacturers.

Buang commented on the plans for Malaysia to co-lead a regional medicine procurement framework alongside the Philippines, Singapore, and Thailand. The framework and financing mechanism are set to be developed between 2027 and 2028, with a pilot program aiming for implementation by 2030. The Malaysian health ministry's study, comparing contracts from 2018-2020 to 2020-2022, found that switching from original-brand medicines to generics also contributed to the savings.

While Malaysia's domestic success demonstrates the potential for a regional Asean model, Buang cautioned that navigating different pricing dynamics would be necessary for the expansion. A larger purchasing pool could provide greater leverage when negotiating for patented and rare-disease medicines lacking generic alternatives. Regional cooperation could also facilitate coordinated stockpiling and access to a broader network of manufacturers, helping countries withstand supply disruptions and reduce reliance on individual suppliers.

However, Buang noted that regional savings would depend on factors such as the medicines purchased, countries' economic capacities, and differences in regulatory requirements. For the mechanism to succeed, participating countries would need reliable demand forecasts, standardized product specifications, transparent pricing, and guaranteed purchase volumes.

The procurement initiative aligns with the Asean drug security and self-reliance action plan under the Asean Strategic Health Agenda 2026-2030, established during the 17th Asean Health Ministers Meeting in Kuala Lumpur in September.