The Malaysian government has “made a decision that we will not adhere or agree to the demand of the US to meet its compulsory licensing and data exclusivity requirements” as talks continue on the establishment of a Free Trade Agreement (FTA) between the two countries, Malaysia’s Deputy International Trade and Industry Minister, Datuk Ahmad Husni Hanadzlah, has said.

Discussions on the proposed FTA are due to start up again this month, after negotiators failed to get agreement by the end-March deadline which would have enabled the deal to be fast-tracked, without amendments, to a vote in the US Congress.

Among the most contentious issues are proving to be Malaysia’s record on intellectual property rights (IPR) protection and the country’s affirmative action campaign, under which the government awards tenders to locally-owned firms rather than Chinese companies. Opponents claim that the agreement would increase medicine prices and cost local people their jobs.

However, Mr Ahmad Husni has denied that medicines would become more expensive under the FTA, stressing that generic drugs would still be marketed in the country and that, rather than threatening jobs, the terms of the deal would require investments which would increase local employment opportunities.

Local manufacturers’ concerns that the FTA would stop them producing generic drugs have also been described as “largely misconceived” by the American-Malaysian Chamber of Commerce (AMCHAM Malaysia), which says that strong IPR and data protection “does not hurt local generic drug manufacturers or make them lose out.”

The Industrial Master Plan 3 (IMP3) for 2006-2020 launched last year by Malaysia’s Prime Minister, Datuk Seri Abdullah Ahmad Badawi, identified pharmaceuticals as an important growth sector and the country expects to leverage on its bilateral agreements to remain globally competitive, while the BioNexus and biotech hub initiatives are part of the government’s National Biotechnology Policy to generate growth in this sector, the trade group points out.

Countries with data protection, such as the USA and Australia, have very strong and flourishing generics industries, says AMCHAM Malaysia. Moreover, it points out that Jordan’s pharmaceutical exports rose 33%, from $150 million in 1999 to $200 million in 2001, after the country signed an FTA with the USA. And in Singapore, which signed with the USA in 2004, generics’ market share remained the same, at 22%, for 2005 and 2006, while their volume growth increased over 31% during March 2004-March 2005 and nearly 28% in March 2005-March 2006, it adds.

Meantime, a recent study reports that, in Malaysia, where market force determine prices, medicines cost much more than they do in India and Sri Lanka, where there are government regulations designed to make drugs affordable. The prices of 48 key medicines in Malaysia are, on average, 16 times higher than their international reference prices (IRP), and only 25% of generic medicines are available through the public sector, say researchers Babar Zud, Ibrahim Mim, et al.

Reporting in PloS Medicine, they estimate that it would take a low-paid Malaysian government worker three days’ wages to afford a month’s supply of the widely-prescribed ulcer treatment ranitidine. By Lynne Taylor