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Executive Summary 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... more
Executive Summary
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. Thus, this paper presents several policy recommendations towards greater accessibility to dietary supplements.
Main Findings
• From extensive global research, dietary supplements have been shown to enhance nutrition, prevent deficiency, reduce the risks of costly disease-related events among high-risk populations, while boosting productivity and improving overall well-being.
• Preventive daily intake of 1g of omega-3 EPA+DHA and 1.7g of phytosterols reduces the relative risk of cardiovascular events by 4.9% and 2.3% respectively, while a daily intake of 1000mg calcium and 15 μg of Vitamin D reduce the incidence of fractures by 15%.
• For every one ringgit spent on omega-3 and B vitamin supplements as preventive daily intake levels, 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.
• 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. Thus, individual expenses for dietary supplements act as an alternative form of insurance which diminishes the risk of substantial expenses for future medical treatments.
• For protection against Covid-19 and other infectious disease, 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.
• The market size of the Malaysian dietary supplements industry recorded an estimated CAGR of 3.0% between 2018 and 2020, reaching RM2.1-2.2 billion (USD 519-544 billion) in 2020. The growing trend testifies to the importance of freedom of choice and empowerment of consumers in healthcare solutions.
• 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.
• The current system of taxes and duties involving dietary supplements have indirectly made products more expensive and limited consumer choices, especially among vulnerable households where affordability is a key barrier. Almost all traditional and non-traditional dietary supplements are charged 5% sales tax.
Policy Recommendations
• The Malaysian government should revise the current import duty policy on the ingredients of dietary supplements, implementing simple and immediate bilateral agreements for truly free trade. Although concerns may arise on the need for protection of domestic industries; yet this would adversely impact consumers and also impede local producers from boosting product quality.
• With regards to SST as duty and SST as tax on manufactured products, we propose that 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.
• We recommend an 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.
• Instead of advocating for overarching subsidies which creates a negative dependence mentality, a limited and targeted subsidy strategy towards vulnerable groups can be considered, coupled with end-of-subsidy monitoring plan.
• We believe that local government action in education, together with cooperation from supplement producers and related NGOs will be an effective long-term strategy to increase dietary supplementation.
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. Thus, this paper presents several policy recommendations towards greater accessibility to dietary supplements.
Main Findings
• From extensive global research, dietary supplements have been shown to enhance nutrition, prevent deficiency, reduce the risks of costly disease-related events among high-risk populations, while boosting productivity and improving overall well-being.
• Preventive daily intake of 1g of omega-3 EPA+DHA and 1.7g of phytosterols reduces the relative risk of cardiovascular events by 4.9% and 2.3% respectively, while a daily intake of 1000mg calcium and 15 μg of Vitamin D reduce the incidence of fractures by 15%.
• For every one ringgit spent on omega-3 and B vitamin supplements as preventive daily intake levels, 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.
• 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. Thus, individual expenses for dietary supplements act as an alternative form of insurance which diminishes the risk of substantial expenses for future medical treatments.
• For protection against Covid-19 and other infectious disease, 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.
• The market size of the Malaysian dietary supplements industry recorded an estimated CAGR of 3.0% between 2018 and 2020, reaching RM2.1-2.2 billion (USD 519-544 billion) in 2020. The growing trend testifies to the importance of freedom of choice and empowerment of consumers in healthcare solutions.
• 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.
• The current system of taxes and duties involving dietary supplements have indirectly made products more expensive and limited consumer choices, especially among vulnerable households where affordability is a key barrier. Almost all traditional and non-traditional dietary supplements are charged 5% sales tax.
Policy Recommendations
• The Malaysian government should revise the current import duty policy on the ingredients of dietary supplements, implementing simple and immediate bilateral agreements for truly free trade. Although concerns may arise on the need for protection of domestic industries; yet this would adversely impact consumers and also impede local producers from boosting product quality.
• With regards to SST as duty and SST as tax on manufactured products, we propose that 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.
• We recommend an 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.
• Instead of advocating for overarching subsidies which creates a negative dependence mentality, a limited and targeted subsidy strategy towards vulnerable groups can be considered, coupled with end-of-subsidy monitoring plan.
• We believe that local government action in education, together with cooperation from supplement producers and related NGOs will be an effective long-term strategy to increase dietary supplementation.
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