- 10 months ago
With the recent US tariff rate hikes and a funding crisis in the United Nations, how can the global healthcare system survive? Join our discussion with healthcare analysts to discover how Global South countries are charting a different path.
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00:00This is Awani Global with me, Naila Huda.
00:09And this week, our attention is still turned towards the impact of the US tariffs.
00:13But adding to this is the funding crisis in the United Nations,
00:17with reports suggesting that there will be a potential restructuring of agencies
00:22like the World Health Organization or WHO.
00:25This raises the question of who will lead global health in times of crisis
00:29in an exclusive report by Reuters.
00:31They reviewed a confidential document listing what they termed as suggestions
00:35of consolidating dozens of UN agencies into just four primary departments,
00:41Peace and Security, Humanitarian Affairs, Sustainable Development and Human Rights.
00:46And with Malaysia's healthcare depending on global supply chains,
00:50will this effect be felt at home with disruption towards healthcare supplies access,
00:55including medical devices?
00:57And that's what we want to unpack today on Awani Global with our panelists.
01:01We have Jean-Michel, Director of South-South Diagnostic Alliance
01:04and Ilyana Shafiqah Mukhris-Mudaris, Research Associate at the Kazanah Research Institute.
01:10Thank you so much for joining us today.
01:11How are you guys doing?
01:13Thank you, Naila.
01:15Jean-Michel, I do want to start with you.
01:17Looking at the US hiking up tariffs, what do you think is the immediate fallout
01:23in global health?
01:24Who is going to feel this the most?
01:27So I think, you know, as you mentioned in your introduction,
01:29it comes within a context also of immense pressure on the global health system.
01:35And the main problem I see is more uncertainty.
01:40And uncertainty is not good when it comes definitely to the supply of many goods but of medicines.
01:48So I think uncertainty in supply chain is a real problem in ensuring access, for example,
01:56to some of the medicines.
01:58And, of course, the immediate fallout is always for the same.
02:02It's for the most vulnerable.
02:04It's for people who depend the most from access to medicine because they have a chronic disease.
02:14And those ones will be, as usual, the ones who suffer, especially the poorest ones, unfortunately.
02:22Yeah, and we've seen that much of the global drug supply, especially with generic medications,
02:27and even with medical devices and equipments as well.
02:30They come from countries like India and China.
02:33So what would happen to that ecosystem if we're going to see US tariffs start to price them out of the market?
02:41The thing is, we cannot price those countries out of the market
02:45because they are essential in the supply line.
02:49You know, like, for example, China is the main provider of active pharmaceutical ingredients.
02:53So if you start putting tariff up on this API, as we call them, it's the whole drug supply that increases.
03:02So we cannot price them out.
03:04We still need to buy the drugs, but they are more expensive.
03:08And that means you buy less with donor money, you buy less with UN money,
03:14or if you are an individual, your drug becomes more expensive.
03:20So we will never price them out. That's the problem.
03:23And the concern here, of course, is that the increase in price,
03:27the increase in cost is going to fall to consumers and hospitals.
03:31Ilyana, is this what we're going to see in Malaysia,
03:33especially with Malaysia importing around about 88% of medical devices from foreign countries,
03:39focusing mostly on high-tech products.
03:42Could these rising costs from tariffs be passed down to Malaysian consumers?
03:48Well, we would say directly no,
03:50because the US tariffs will not cause medical devices imported into Malaysia to rising costs.
03:54It applies to imports into the US.
03:58But Malaysia's imports are subject to our own import duties, which are very low.
04:02For example, diagnostic imaging equipment, that's typically subject to 0% to 5% import duty,
04:07whereas sometimes items like PPE have no import duties exerted on them in special cases.
04:13So we wouldn't necessarily say the tariff would immediately cause an increase in prices.
04:17However, we know that there's a lot of worry about the possible indirect effects,
04:21as Jean-Michel mentioned, the uncertainty.
04:23And this comes from the scenario where, for example,
04:25an item we typically import from the US contains an active pharmaceutical ingredient
04:30or component that are from countries subject to high tariffs.
04:34Or I think Code Blue also highlighted that in cases where we export items to the US
04:40and later re-import them, there will be a risk of higher costs compared to before.
04:45There's also the possibility of US tariffs on other countries causing global price shifts
04:49in raw materials or components, which can raise the cost globally and thus affecting Malaysia
04:54or even US-based medical device companies adjusting their global prices
04:58to offset their tariff burdens, causing to price hikes in our country.
05:02But again, there's a lot of ifs and buts here.
05:04So really, the only thing we can say is to wait and see.
05:07But in light of the issue of higher than average medical inflation rate seen here in Malaysia,
05:12it could be time for us to reassess our healthcare resources, procurement pathways,
05:16and how best to optimize them and whether we should consider investing in our own capabilities.
05:21Laila, I think, you know, Liana is totally right.
05:24The supply chain is so global.
05:26When you start shaking one hand, you don't know what's happening to the other hand.
05:30And that's really the risk that we see now and the problem that we will have to tackle.
05:36Yeah.
05:36And, yeah, Jean-Michel, you did mention as well the ones that are going to feel this,
05:40the ones that are going to be impacted the most are going to be low income, middle income,
05:45the most vulnerable communities and countries the most.
05:47With the tariffs, and after this, we're going to touch on, obviously, the UN with restructuring and whatnot.
05:54Could you see this as undoing or reversing some of the milestones, the gains that we've achieved in health crisis,
06:02in issues such as HIV treatment, perhaps the access to HIV treatment,
06:06a pandemic preparedness that's been built up over the years.
06:09Could this reverse some of the achievements, Jean-Michel?
06:12Oh, absolutely.
06:13I think, you know, if we are talking, we have two scenarios.
06:16One of scarcity of drugs, for example, or diagnostics.
06:21And we have experienced what happens when there is scarcity with the COVID-19 vaccines.
06:26It's the richest who have access to it.
06:28So the richest countries.
06:29So low and middle income countries will suffer.
06:33But the second scenario is the global increase in prices.
06:36And again, you just buy less with the money that you have.
06:41And if you are a low and middle income country and the government budget is already under pressure
06:47in managing different priorities, it is more than probable that, you know, access to HIV drug will suffer.
06:59We will definitely see an undoing of some of the progress, especially in the disease you mentioned, HIV.
07:06And I'm quite confident, you know, we will also see people dying from the shakeup that the global health system is going through at the moment.
07:16You mentioned vaccines and you mentioned COVID-19 treatment where it was a sort of every country fending for itself situation
07:26and richer countries definitely got an advantage over poorer and middle income countries.
07:33Do you see this as that repeating or perhaps this is a much bigger, broader trend, what we see with vaccine nationalism now
07:40with medical devices, APIs, active pharmaceutical ingredients.
07:45Is this going to be a situation where we'll all have to fend for ourselves?
07:49Is international solidarity really sliding?
07:52Ilyana, what do you think?
07:54Yeah, I think so.
07:55I think with COVID-19, we saw that although we tried to establish things like COVAX,
08:00which was supposed to ensure fair allocation of vaccine doses to cover like high risk groups in all countries,
08:06it still took them time to secure access to these vaccines.
08:09And there was an evident race with countries that had an advantage to be able to procure these vaccines.
08:15And manufacturers also prioritized like earlier bilateral customers.
08:19And there were export restrictions that had a negative impact on the supply for COVAX.
08:23So you could see that there were countries that wanted to, in the case of the global north,
08:27or had to, in the case of the global south, mainly look out for themselves in these times of health crisis.
08:33And a consequence of this is that lower middle income countries and upper middle income countries are more vulnerable,
08:38unless they are able to develop more regional production hubs.
08:43And in this sense, I think that the global south is becoming a rising pharmaceutical powerhouse
08:48through domestic policy and through regional alliances.
08:54And Malaysia as well.
08:55I think we have plans to advance the development of therapeutics and diagnostics in the global south.
09:00As part of the chair, we have played sort of a central role in the efforts to boost regional collaboration,
09:06leading to affordable medical innovations.
09:09And an example of the success has been, for example, our ravidasevir,
09:13our low-cost antiviral for hepatitis C, which normally costs a lot for the global south,
09:19but through partnerships with Malaysia, Thailand, Egypt, and the Drugs for Neglected Diseases initiative,
09:25we managed to achieve a treatment plan that was much, much cheaper.
09:28So we have some blueprints of success for south-south cooperation,
09:32and maybe this is time we look at how we can take collective action on our side
09:36to strengthen our healthcare capacity.
09:39I mean, Jean-Michel, this sounds like it's more up your street, right,
09:42with south-south diagnostics and creating that sort of alliance and cooperation.
09:47In crisis, perhaps there is room for an opportunity.
09:50What do you see this as? Maybe creating more space for the global south?
09:55Opportunity, it's a tough word because, you know, people will die.
10:00But I see totally what you mean that, and Liana, you're right,
10:07we need to respond, and regional response is a way to go, in my opinion.
10:13But also, we underestimate the capacity of countries like Malaysia
10:20to contribute meaningfully to research and development.
10:25And that's, you're right, the HCV treatment,
10:27is an excellent example of that.
10:31So we need to work with our neighbors,
10:34especially the ones who are probably at the same level of us,
10:40like Thailand, and together, so ASEAN is, of course,
10:46an interesting political shell, but we know it's a complicated one
10:51because there are different levels of development among all ASEAN members,
10:55but there need to be at least some leadership from a few countries in ASEAN
11:00that can pull other countries.
11:01And I can see Malaysia playing a very important role with that.
11:05And that is what we want to do with the Salsa Diagnostic Alliance, yes.
11:11Yeah, and perhaps adding more salt to the wound
11:14is when we're seeing what's happening with the UN as well,
11:17US cutting their funding,
11:19and following from that, major potential UN reforms,
11:24folding WHO functions into a much broader humanitarian agency.
11:28You know, the global health is already underfunded and undermined as it is,
11:35and this is perhaps adding even more salt.
11:38Ilyana, what do you think this would do to global health governance?
11:44I think just generally,
11:46you can see the point from the UN or from the US
11:50where the merger is supposed to bring about the potential benefit
11:53of centralized governance,
11:55better streamlined funding and operations,
11:57because there are so many different entities
12:00and in response to global budget cuts.
12:03But there are definitely trade-offs to this efficiency.
12:06So, for example,
12:07I think one of the things mentioned in the article by Rudis
12:10was that the merger of the UN AIDS Agency and WHO,
12:14the World Health Organization,
12:15as a specific example.
12:17And they structurally run in very different ways.
12:20So, WHO sets technical guidelines
12:22and standards for health.
12:23And then UN AIDS is more evocative in nature
12:26and is more of a multi-struct agency kind of body.
12:32So, because the WHO's focus is more biomedical,
12:34rooted in public health policy,
12:36the global health response to HIV,
12:38if a merger occurs,
12:40may risk losing its multidimensionality,
12:43which includes things like legal reform,
12:45stigma reduction, community empowerment,
12:47things that are not necessarily in the direct mandate of WHO,
12:50but could be some things that they advocate for.
12:54So, when you make a list of organizational priorities,
12:56some things may be drowned out
12:58and that's the risk of things like mergers like this occurring.
13:02And also in terms of the way WHO governance
13:05is less confrontational and often cautious
13:08around politically sensitive issues,
13:10UN AIDS may lose its ground as a human rights
13:14and social justice advocate
13:15in a setting where that's needed,
13:18especially with HIV.
13:18So, sure, a merger could better align services,
13:22but global health governance may also shift
13:25towards a more like medicalized model of health
13:27with a reduced focus on things like responsiveness,
13:30equity and innovation,
13:31as well as grassroots level involvement.
13:33So, there are trade-offs that we would be seeing
13:36if something like a merger does occur.
13:38Jean-Michel, what's happening to the WHO,
13:55to international health institutions?
13:58Does this come as a surprise to you
14:00or do you think this was eventually going to happen?
14:02It was eventually going to happen.
14:04I think COVID-19 has been a stress test
14:10with the global health system
14:11has essentially failed.
14:13And it has failed because it is functioning too much
14:19in the 20th century with a vision of the world
14:23which is very north-south,
14:26where the knowledge is in the north,
14:27the south is a recipient.
14:29As I mentioned before,
14:30the south is now an active contributor to innovation.
14:35And this needs to be much more recognized.
14:38The global health system is less and less...
14:42It's not global.
14:43It's a Western-led system.
14:47And so, we need to open up, if you want,
14:51or at least we need to integrate,
14:54again, countries that have a potential,
14:56like Malaysia, like Jordania, like Morocco.
14:58Those are just examples from the top of my head.
15:01And we need to integrate them
15:03in the decision-making system around the table.
15:07And probably, you know, we should move...
15:10This is very radical,
15:11but we should move WHO out of Geneva,
15:14one of the most expensive cities in the world.
15:17So, that would already be quite out of savings.
15:20And if it was based in many of the higher middle-income countries
15:27that have the capacity to welcome,
15:32to manage, you know, the infrastructure,
15:34the resources to manage an organization like WHO.
15:37So, I think it's time for some radical changing like that.
15:41Moving away from this cartel mentality,
15:44you know, which is led by the Global North and Big Pharma,
15:48and also geographically moving away
15:50to be much closer to where the issues are.
15:53To move away from Geneva,
15:56to move away from the Global North,
15:58then what do you see or foresee
16:00in the future of global health diplomacy?
16:03Who do you see as being the superpowers
16:06that would take charge
16:08or should take charge in this, Jean-Michel?
16:10I think if we don't make that necessary move
16:15to, you know, open up what's essentially,
16:19as I mentioned, for me, a cartel,
16:20there's been some literature on that,
16:23there will be parallel systems setting up.
16:26And one of the leaders of that parallel system
16:28would be China, you know.
16:29I think if there is another outbreak like COVID,
16:33China won't even bother with the global health system
16:35because they've been quite anti-China,
16:38especially when we look at the vaccines.
16:39So, they will go directly in bilateral negotiation
16:42as they have done before.
16:44And, you know, they won't bother.
16:48And then, eventually, India will do the same.
16:51So, we'll end up with, you know,
16:53two or three global health systems,
16:55which are not global.
16:57And that would be really a shame.
16:59So, it is time that the current global health system,
17:04you know, move away from its very colonial,
17:09Western-driven vision of the world
17:12and integrate the knowledge, the expertise,
17:16the abilities, the voice,
17:19and not in a meaningful way, in a real way,
17:23by, you know, the concept that I push
17:26is turning the tables around.
17:28It is time to turn the table around,
17:29which is the concept that we base
17:32the South-South Alliance on,
17:35which is, you know,
17:36putting endemic countries' researchers
17:38in the driving seats.
17:40And that's crucial if we want to see success.
17:44I do want to go back to the issue of disruptions.
17:48Going back to the issue of U.S. tariffs,
17:51what's happening with the UN,
17:52surely is going to eventually have an impact
17:55on countries that might not even be affected
17:58directly by the tariffs.
18:00But eventually, we want to see
18:01what could potentially happen to Malaysia
18:03and is Malaysia even prepared
18:05to face such disruptions?
18:07Ilania, what do you think
18:08if we were to see these disruptions continue
18:11and perhaps get even worse,
18:12especially with health supplies in Malaysia,
18:15do we have sufficient health care reserves,
18:18health care supply reserves?
18:20Do we have the production capabilities?
18:22You mentioned there's some capability
18:23and there's been some progress
18:25in clinical research and developments.
18:27But are we ready for that yet?
18:29And how long could we see the impact
18:32being felt by Malaysians?
18:35So the short answer is we are not there yet
18:38in terms of having sufficient reserves
18:40for local production capabilities
18:41if a global health crisis were to hit right now.
18:45But I think that we, again,
18:46as we were talking about earlier,
18:48we could be on the right track to achieving this.
18:51So one of it is that we already have initiatives
18:54for research and development from universities
18:56and we have domestic manufacturers
18:58such as Duopharma,
18:59which have the capacity to do things
19:01such as fill and finish production.
19:03However, we are faced by certain constraints
19:05and there is a study by the World Bank
19:07after COVID-19,
19:08which did look at like our capacity
19:11for vaccine manufacturing.
19:12And we face, for one,
19:16a low domestic consumption
19:17that is not able to sustain
19:20the substantial upfront investment
19:22needed to establish a full manufacturing facility.
19:25And secondly,
19:26our vaccines may not be fully compliant
19:28to WHO standards
19:29since our facilities are not advanced enough
19:31or budgets are insufficient
19:33to sustain them
19:35during the vaccine development stage.
19:37And we also lack trained technical personnel
19:39and scientists in vaccine research and development,
19:42which usually comes from substantial exposure
19:44and training.
19:45So this highlights the need
19:47for a lot more investment
19:48in our production sector.
19:49But Malaysia has been showing strong support,
19:52such as through the launch
19:53of the National Vaccine Development Roadmap,
19:55our NIMP,
19:56National New Industrial Master Plan,
19:59which is hoped to be able to tackle this,
20:01but it requires active follow-through
20:03and really substantial investments.
20:06And in terms of medical devices,
20:08which we mentioned earlier on in the interview,
20:10in this sense,
20:11we do have quite a good capacity for it.
20:14We have the highest concentration
20:16of medical device MNC manufacturing sites in ASEAN.
20:20But the fact of the matter is
20:21that what is made in Malaysia
20:23is not necessarily made for Malaysia.
20:26So should we be leveraging
20:27these capacities for local production?
20:29Can we afford to sustain it
20:31to bring up the industry
20:32if we do change the way that we work,
20:35you know, less imports, more exports?
20:38Or the other way around.
20:40Also, we still rely heavily on imports
20:42for more advanced equipment
20:44from countries like US, Germany, Japan, China,
20:46because of the high costs, the complexity.
20:49So how do we scale up to meet the demand
20:51for these more complex items?
20:53So these are questions
20:54that the government has to think about.
20:56And again, we come back to the idea
20:57that I think John-Michelle and I
20:58have been mentioning
20:59most of the interviews
21:01that regional collaboration
21:02could be the answer
21:03because of limited capacities
21:05that each country has.
21:07So another platform
21:08we can take advantage of
21:09could be BRICS,
21:10where they're exploring
21:11barrier-free regulations
21:13for biosimilars and biologics.
21:15And it could be good
21:15if Malaysia could jump in.
21:17But I think my final point
21:19would be that Malaysia
21:19has to really commit
21:20to strengthening
21:21its public health care system as well
21:23and really pushing through
21:24with reform efforts
21:25because that is where
21:26people turn to in times of need.
21:28So we have to ensure
21:29that our public facilities
21:30are adequately funded,
21:31appropriately staffed,
21:32and properly equipped
21:33to meet the demands
21:34of our population.
21:35So thinking about
21:36the global supply chain
21:37but also thinking about
21:38our capacity to deliver
21:39health care on a local level
21:40is needed to really
21:41be resilient
21:43to the next health crisis.
21:45If I may, Naila,
21:47I also think that
21:48drug development,
21:50vaccine development,
21:51more than diagnostic development,
21:53is a very complex affair.
21:54And what we need
21:58is to really have
21:59a strategic reflection
22:02on how to tackle
22:04this level of innovation.
22:08It's not easy
22:09and I don't think
22:10we see that today
22:11but I think that's
22:12what the country needs.
22:13It needs a roadmap
22:14and supported by investment.
22:18So it needs a direction
22:20and it's never easy
22:22because it means
22:23making choices
22:24so some researcher
22:26might feel, you know,
22:28cheated
22:28because suddenly
22:29their share of the cake
22:31of the financing
22:32is going down
22:32but we need a strategy.
22:34I think if we come back
22:36to the example
22:37of the development
22:38of Javidazvia,
22:39I think it's been
22:40very disruptive
22:41in a way
22:43because it forced
22:44the MOH
22:45to get out of its silo
22:48and that's what
22:49we need to see more.
22:50But at the same time
22:51it's been very structuring
22:53because it has given
22:54a direction
22:54and that is what
22:56we need to see
22:58at the country level,
23:01you know,
23:01something that is disruptive
23:03so get people
23:04out of their comfort zone
23:05but at the same time
23:06channel them
23:07in the right direction
23:09and it's possible.
23:11Yeah.
23:11But do you think
23:12overall Malaysia
23:13is on the right track?
23:14Do you agree?
23:15I think Malaysia
23:17is at the right time
23:19rather than the right track.
23:20So I think we are
23:21at the moment
23:22where there are
23:22a lot of people
23:23in Malaysia
23:24that are asking
23:25themselves the question
23:26how can Malaysia
23:28contribute to innovation,
23:30to R&D
23:31and strengthen
23:32its security of supply.
23:33so we are at the right moment.
23:35There is a lot of capacity
23:36and I hope we manage to
23:40so I feel very strongly
23:42that I'm part of that ecosystem
23:44and I support this ecosystem
23:45having lived in Malaysia
23:47for a long time
23:48and contributed to R&D
23:50and I hope we don't miss
23:52that opportunity
23:53and that we are able
23:54to deliver on a roadmap
23:58and on a direction
23:59that will be beneficial
24:00for the country economy
24:02and for people.
24:05Yeah, I think we'd like
24:06to end on that
24:07very hopeful
24:07and optimistic note.
24:09Thank you so much
24:09to our panelists today
24:10Jean-Michel and Ilyana
24:12for joining us
24:13to discuss a little bit
24:14about how the US tariffs
24:15and how potential
24:17restrictions and reforms
24:19at the UN
24:19might impact global health
24:21and including Malaysia.
24:23Thank you so much
24:23for your time today
24:24and that's all
24:24for Awani Global
24:25this week with me
24:26Nala Huda.
24:27We'll catch you another time.
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