Dzulkefly: Malaysia preparing to diversify healthcare supply chains as US tariff pause creates uncertainty (2025)

KUALA SELANGOR, April 14 — Health Minister Datuk Seri Dr Dzulkefly Ahmad said the Ministry of Health (MOH) is taking steps to safeguard Malaysia’s healthcare industry amid uncertainties surrounding potential tariff changes by the United States.

He said the ministry is currently exploring alternative sources for generic medicines and medical devices from countries such as China and India in efforts to reduce reliance on the US and Europe.

“The ministry is also reviewing the number and value of contracts involving Single Registration Holders that are set to expire within the next one to two years to assess the availability of alternative generic products in the market.

“The National Pharmaceutical Regulatory Agency (NPRA) will provide a green lane for processing registration applications for generic products from abroad, particularly those from China and India,” he said at a press conference after attending the KPJ Kuala Selangor Specialist Hospital official launch and Hari Raya open house here today.

Dr Dzulkefly said that between 2023 and the first quarter of 2025, a total of 12 contracts between the MOH and local pharmaceutical companies, involving pharmaceutical products sourced from the US were signed amounting to RM162.47 million (US$36.43 million). These contracts are set to expire progressively starting in 2026.

He said continuing to procure drugs from the US could lead to increased costs if the US proceeds with reciprocal tariffs on ingredients used in these products.

“The cost of imported drugs and medical devices will increase if the active pharmaceutical ingredients (API) used in the drugs or the components in the medical devices affected by the tariffs.

“Local generic drug producers may incur higher costs in procuring APIs from abroad due to increased demand from the US pharmaceutical suppliers.” he said.

He said the pharmaceutical companies currently exporting products involve cancer therapy, cardiology, oncology and injection solutions to the US are Novugen Pharma Sdn. Bhd and Biocon Sdn Bhd.

Dr Dzulkefly said the ministry held an engagement session with key industry associations, some representing major US pharmaceutical companies, on April 9, and these associations included the Pharmaceutical Association of Malaysia (PhAMA) and Malaysian Organisation of Pharmaceutical Industries (MOPI).

Other relevant parties involved were the Malaysian Association of Pharmaceutical Suppliers (MAPS), Malaysia Medical Device Association (MMDA) and Association of Malaysian Medical Industries (AMMI).

According to Dr Dzulkefly, in 2024, Malaysia’s medical device exports to the US were valued at RM13.69 billion (US$3.07 billion), representing 36.97 per cent of the country’s total global medical device exports, which amounted to RM37.03 billion.

Out of the RM13.69 billion in exports to the US, RM5.01 billion or 36.6 per cent consisted of surgical and examination gloves.

He said that Malaysia’s pharmaceutical exports to the US in 2024 were valued at RM560 million, accounting for 18.48% of the nation’s total pharmaceutical exports, which stood at RM3.03 billion.

“We are monitoring closely the developments, particularly the recent 90-day tariff pause announced by US President Donald Trump.

“For now, pharmaceuticals are reportedly on the exempted list, but there is still no clarity regarding medical devices. Therefore, we will continue to monitor the situation closely and respond appropriately. Every challenge also brings opportunity,” he also said.

On the question of whether the ministry is open to price negotiations, Dr Dzulkefly said the MOH is open to any measure to navigate the current situation for the sake of the nation.

“That’s the way forward. However, that’s not under my portfolio. That’s for the Investment, Trade and Industry Ministry and Finance Ministry to handle,” he added. — Bernama