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- #considerthis
Global disruptions are beginning to move beyond energy markets into the supply of essential goods, which raises questions about how resilient Malaysia’s healthcare supply chains really are. Can healthcare systems hold up if disruptions persist? On this episode of #ConsiderThis Melisa Idris speaks with Lim Teng Chyuan, President of the Malaysian Association of Pharmaceutical Suppliers (MAPS).
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00:10hello and good evening i'm melissa idris welcome to consider this this is the show where we want
00:15you to consider and then we consider what you know of the news of the day global disruptions
00:20are beginning to move beyond energy markets and into the supply of essential goods and that raises
00:26questions as to how resilient is our health care supply are our health care supply chains really
00:34for malaysia and can the system hold if these disruptions persist well joining me on the show
00:41to discuss this further is limping chuan who is the president of the malaysian association
00:47of pharmaceutical suppliers better known by its acronym maps tc thank you so much for joining
00:54me on the show today uh to start our conversation uh can you briefly describe just how reliant is
01:02malaysia on imported inputs across the pharmaceutical chain so we have a broad picture thank you very
01:11much and thank you for seeking our views most malaysians understanding about their medicines is
01:20what they see as tablets capsules syrups creams etc and nicely packed in blister packages or bottles
01:28and complete with dose measuring cups these are called finished form products however it does not
01:35start there with that first statement i would like to say that malaysia is virtually dependent on imports
01:43for medicine security and adequacy despite having around 90 local manufacturers involved in prescription and
01:52otc medicine production i like your pick of the word inputs our local manufacturers import most of the active
02:01pharmaceutical ingredient or in short apr and that is a key input if we assess on the basis of finished
02:09forms
02:09import supply only about one third of our needs measured in terms of physical consumption
02:16sources of finished form farmstead supply in malaysia can be seen from two main sources
02:23that is locally produced and imported malaysian healthcare outlets source generics from locally manufactured
02:32as well as imports we are reliant on imported inputs for all categories of products in the final analysis
02:41whether it's locally produced it still is dependent on imported apis local manufacturers do blunt the
02:50intensity of this reliance on finished form however the heaviest reliance at any point in time including present day
02:58is in innovative new drugs including small molecules and biologics there's only only one manufacturer of
03:08biologics locally small molecules that are still under ip production or recently expired do not have any or much
03:16competition either from local or foreign sources making them particularly susceptible to supply disruptions
03:25products leaving aside ip protected products our reliance correlates to our disease burden
03:32the highest disease burden would be in health related heart related diabetes mellitus cancer and infections
03:40with some exception in cancer products supporting the treatment in these high disease burden areas can be
03:47supplied locally and also by imports particularly from india and thailand some of our local manufacturers are
03:54even importing english from goods even though they have their own factory but due to demand it is not
04:02economical for them to manufacture locally china is seeking actively to enter our market but it is still small
04:11they did play a major role in covid vaccination china and india together form the largest supplier market for api
04:22not just for malaysia but for the entire world okay all right so so thank you for laying that out
04:29even
04:29you've given us quite a good overview now what have you been observing tc since the uh war on iran
04:37began i'm
04:37just wondering whether you are starting to see or notice signs of disruption uh in terms of supply
04:43okay as early as early as the first week of the gulf conflict we have been monitoring the situation
04:51our observations revealed mainly impacts on costs related to order fulfillment we work with suppliers
04:59on cif fob and x workspaces depending on the contract of supply cif basis means that everything is
05:07uh is counted for including freight and insurance this would have the least impact on purchases
05:16while x works would be the worst hit because x works means that the the buyer has to pay for
05:23the transportation from the factory up to our doorsteps an early survey among our members revealed that
05:30the cost of inbound freight increased on average around 20 percent then there is the cost of outbound freight
05:38related to our own local fulfillment so once the goods enter our warehouse we have to fulfill
05:44local demand local supply that is also affected we are however thankful to the government for the
05:52diesel subsidy but some parts of our operations do not get subsidized example in our third party forwarders
05:59sometimes we just cannot supply to the really small places in malaysia so our our own transporters
06:07do not cover us so we need to get third party to do it we did not see any supply
06:15disruption initially
06:17a month or so into the conflict some of our members reported shipment delays it is easy to mix this
06:23up with stock shortage that's this one point we have to be very careful generally a big portion of
06:30pharmaceuticals are sent by f rate because the value is high enough to justify that premium so we avoid the
06:38straight entirely but some of the main carriers especially products from europe transit the gulf states so
06:46they can come from germany they land in in uae and then they are trans shipped back to our country
06:55because of the danger to the airspace such flights are diverted south to the african continent
07:02and because it's a new role new route they get offloaded so while arranging for the next leg of the
07:10air transport because it's no longer the
07:13the standard way of doing business so arrangements have to be made to facilitate this new flight pathway and that's
07:20why it's causing some delays
07:22of course okay as in most contracts there is force majeure courses as well one of our members has reported
07:30that a supplier has started invoking that clause
07:33what we have not seen however is an across the board increase in product costs although we have seen some
07:39members affected
07:41but this would change drastically in the coming months if the blockage is prolonged
07:49manufacturers may not have increased their prices now as the api the one that i mentioned earlier key input
07:57the api that they have purchased could have been paid for before the conflict eventually the cost of api
08:04will hit our suppliers when they actually replenish the api as an input into their production it's just a
08:11question of when that the prices will increase that that's a really good question um
08:17um how what what what are you anticipating when you speak to your members what kind of timeline are
08:23they looking at in terms of how much buffer they have okay uh each supplier carries different buffers
08:31so we have those who actually ran out of stock already and they are anticipating their new shipment
08:38some have three to four months some even longer because when we sign a contract with our suppliers
08:46we have what we call it minimum order quantity so a shipment has to come in no matter how much
08:52it is
08:53we have to take that shipment one container or one one pallet so depending on the demand that supply can
09:00be
09:00as short as a month can be as long as a year so it depends on the timing um and
09:07our ordering cycle
09:08so so if it if it blends nicely into our ordering cycle we may have three months stock so on
09:15average
09:15we have about three to four months stock um but that is uh generally speaking we can't go into the
09:24specifics because uh there are some data protection issues uh when comes competition so i'll just leave it
09:32okay uh something you said a bit earlier is really interesting to me you said we have to make the
09:37distinction between delays versus shortages can you elaborate and i'm just wondering how should we
09:45understand that as um as the public and also as government and policy makers are they do they understand
09:53the distinction are you coordinating in terms of what you know and what you're observing across your
09:58members in your supply chains yes um we just had a meeting with the uh with the pharmacy services
10:08program the meeting ended in just barely an hour ago so we are coordinating very closely with them
10:16there are two two uh issues here one is supply to the government um that would be under government
10:24contracts then we have the supply to the general public your private hospitals pharmacies clinics and so
10:31on um the the problem is that most our of our members would fall into a a big issue um
10:41when our members
10:44quoted the government for the supply there was no gulf issue so uh being companies we want to go in
10:52with
10:53the best price possible so we may go in with the brazen thin margins but with the escalation in um
11:00freight
11:01and in terms of uh actual product costs which eventually will hit us so there's some worry uh among our
11:10members that uh that will be issues with forces incurred by uh the companies so we are engaging with the
11:18uh pharmacy services to ensure that somehow we come up with a solution for which works best for both sides
11:26on the other hand the private market uh there's a bit more flexibility because we are not bound by a
11:33contract price
11:34however the companies will have to start thinking about if we increase our prices
11:39whether there would be uh fallouts uh patients may uh just totally fall off treatment so it's something
11:49that we have to manage but we are trying to um as best as possible work with our suppliers to
11:57ensure that
11:58the impacts would be minimal and what should policy makers be prioritizing tc uh to ensure that
12:06the impact is minimal and that there is continuity of access um the policy makers uh have to consider some
12:18forms of flexibilities uh when it comes to supply and prices so uh we are in the industry we want
12:26to
12:26ensure that the supply is maintained but at the same time uh likely or not we are also business
12:32so if if uh we cannot continue our business with our business we fall then there's also no more supply
12:41so it works best both ways that the government is more flexible uh listening to industries which we
12:47are very thankful that they are doing it okay and for the public what should we understand about
12:54what's to come uh they talk about a multi-wave of impact from the war on iran uh what should
13:00we be
13:01thinking about what should we understand about the risk of delays and shortages and what should we
13:06avoid doing uh in the meantime the risk of shortages remains a possibility as i outlined earlier flight
13:14delays flight diversions uh prices probably going up um however we are actually working at uh relieving the
13:26administration the public may still experience some shortages whether real or perceived i need to
13:32explain how it can be perceived generally all healthcare factors and i'm talking now private yeah
13:39uh get supplies on the mix of factors example price price credit terms confidence with the supplier
13:48if one supplier is short on stocks it does not necessarily mean that the country is out of stock
13:54your supply outlet be the gp the pharmacy or the hospital may be out of stock of the products
14:01from their preferred supplier unless the product is an ip product protected product or single source
14:08albeit of patent they can still source from another supplier take for example one of the most common
14:16products used in malaysia paracetamol there are about 200 products of different strengths and dosage forms
14:24available as is amlodipine for high blood pressure and metformin for diabetes so uh the the
14:37health care provider can still get the sources just not from their preferred give you other example betanethosone
14:44which is using allergy and salbutamol for for asthma airway statins for cholesterol like the etovastatin or
14:53suvastatin uh they have high dozens of products available in malaysia so it's not that it's out of
15:01stock just that your preferred uh brand will be out of stock okay all right so for us to bear
15:08that in
15:08mind i appreciate you uh coming on the show and sharing some of these industry insights with us
15:13gc i appreciate your time that was lim ting chuan from maps or the malaysian association of
15:20pharmaceutical suppliers we're going to take a quick break here and consider this we'll be back with more
15:25stay tuned we'll be right back
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