Tuesday, 15 June 2021: The Center for Market Education (CME) published a new policy paper titled Dietary Supplements in the Malaysian Context: Policy Recommendations for Enhancing Freedom of Choice and Healthcare Savings, authored by Benedict Weerasena (CME Fellow and Economist at Bait Al-Amanah), Dr Carmelo Ferlito (CME CEO) and Prof Paolo Bellavite (Professor – retired – of General Pathology at the University of Verona in Italy). The paper is available for free download here.  

“We are glad to have conducted this research, which I believe to be very timely”, explained Dr Carmelo Ferlito. “In fact – he added – for protection against Covid-19 and other infectious diseases, a nutrition model rich in suitable dietary supplements including omega-3 fatty acids, vitamins C and D, and phytonutrients is highly recommended. This aligns with the rise in demand of system-boosting products in Malaysia during the Covid-19 pandemic. At this regard, prevention needs to be one of the key factors in fighting the war against the virus”.

Similarly, dietary supplements consumption has proven effective in preventive several non-communicable diseases (NCDs), such as cardiovascular events and diabetes. Considering that Covid-19 is considered a syndemic – a disease with prevalence of heavy symptoms in individuals with different NCDs – prevention against NCDs becomes supportive in preventing development of Covid-19 in a severe way. 

The paper highlights that the demand for dietary supplements in Malaysia is on an upward trajectory similar to global trends, due to increasing awareness regarding personal health and well-being, in addition to evolving eating habits amid time-pressed and hectic urban lifestyles. This is because dietary supplements have been proven to boost immunity, reduce the risk of infections, overcome malnutrition and contribute to significant healthcare savings as a whole. However, the discriminatory regulatory and fiscal framework at present has reduced access to dietary supplements in Malaysia, especially among vulnerable communities. 

The research brought to light not only the importance of dietary supplements to prevent several diseases, but also the potential healthcare savings connected with a higher level of consumption. “For every one ringgit spent on omega-3 and B vitamin supplements as preventive daily intake levels – Benedict Weerasena explained – a significant RM4.50 and RM1.72 can be saved respectively in avoided coronary heart disease (CHD) costs. The total estimated potential net savings in avoided hospital utilization cost, productivity loss and burden of disease cost is RM42.44 million and RM16.74 million respectively, on average per year in Malaysia”. Similarly, for the prevention of Type 2 Diabetes Mellitus (DM), RM 1.31 can be saved per RM 1 spent on chromium picolinate, amounting to a total potential net cost savings of RM248.27 million per year. 
One of the main findings is that individual expenses for dietary supplements act as an alternative form of insurance which diminishes the risk of substantial expenses for future medical treatments, both at individual and healthcare system levels.

Despite the positive growth in demand, Malaysia still lags behind its Asian counterparts, as less than 30% of the population consumes dietary supplements compared to countries like South Korea (60-70%), Taiwan (40-50%) and Australia (40-50%). The low consumption of dietary supplements impedes progress in overcoming the triple burden of malnutrition, obesity in adults, and anaemia among women of reproductive age, in which Malaysia is the only Southeast Asian nation with this triple burden. 

At this regard, the Center for Market Education proposes the following policy reforms:

  1. Revision of the current import duty policy on the ingredients of dietary supplements, with the implementation of simple and immediate bilateral agreements for truly free trade. 
  2. Ingredients and final products related with dietary supplements should become SST exempt. This is grounded in the importance of freedom of choice with regard to healthcare decisions and individual courses of treatment. 
  3. Introduction of lifestyle tax relief for individuals for the purchase of nutrients and dietary supplements, with a limit of RM 1,500 per year, considering how tax reliefs nudge in favour of healthy behaviours. 
  4. Overarching subsidies which creates a negative dependence mentality should be avoided, while a limited and targeted subsidy strategy towards vulnerable groups can be considered, coupled with end-of-subsidy monitoring plan.
  5. Education initiatives, implemented by federal and local governments together with cooperation from supplement producers and related NGOs, will be an effective long-term strategy to increase dietary supplementation.

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About CME: The Center for Market Education (CME) is a boutique think-tank based in Kuala Lumpur, Malaysia. As an academic and educational institution, CME aims to promote a more pluralistic and multidisciplinary approach to economics and to spread the knowledge of a sounder economics, grounded in the understanding of market forces. In order to do so, CME is not only involved in academic initiatives, but it organizes seminars, webinars and tailor-made economics classes for students, journalists, businesspeople and professionals who wish to better understand the relevance of economics for their daily lives and activities. Economics matters and needs to be presented in a fashion in which the link with reality is clearly visible. In this sense, we look not only at theoretical economics but also at policy making, with an emphasis on the unintended consequences generated by political actions.