Abstract:Background: Escalating pharmaceutical costs strain public health budgets, particularly in low- and middle-income countries. To address procurement fragmentation and inequities, Malaysia implemented inter-ministerial pooled procurement (PP) in 2020 across the Ministry of Health (MOH), Ministry of Defence (MOD), and Ministry of Higher Education (MOHE). Methods: A cross-sectional study analysed procurement data from 82 medicines, comparing two-year periods before (2018 2020) and after (2020 2022) PP implementation. Estimated savings, price differentials, and dissavings were calculated. Multiple linear regression assessed determinants of cost savings, including inter-ministerial collaboration, brand substitution, supplier characteristics, number of bidders, negotiation, and procurement volume. Results: PP generated RM179.6 million (17.7%) in overall savings from RM1.01 billion expenditure. Inter-ministerial collaboration significantly increased savings (β = RM1.2 million; p<0.05), underscoring the benefits of joint bargaining. The most influential determinant was switching from innovator to generic medicines, linked to an average additional RM2.0 million in savings (p<0.05). Conversely, switching to innovator products tended to increase costs. Other factors, such as procurement volume, supplier concentration, and number of bidders, were not statistically significant in multivariable analysis, although they influenced outcomes descriptively. Conclusion: Malaysia’s pooled procurement demonstrates that generic substitution and cross-ministerial pooling are the strongest drivers of efficiency, delivering fiscal savings and more equitable access to medicines. Strengthening these levers, supported by digitalisation and better demand forecasting, can further optimise collaborative strategies to ensure sustainability and responsiveness to the evolving health impacts shaped by social and environmental change.
Keywords: Health Systems and Universal Health Coverage (UHC), pool procurement, generic substitution, inter-ministerial
