OBJECTIVES : Diffusion of new medicines is crucial for patients as they get access to new therapies that might be more effective in treating their disease. However, the introduction of these new therapies is expensive and accounts for the growth in public sector pharmaceutical spending, and remains a challenge for policy makers to balance patient’s access to new medicines. This study aims to assess diffusion patterns of new chemical entities (NCEs) products and identify the determinants that influence the adoption of NCEs within the Ministry of Health (MOH) Malaysia.

METHODS : We matched NCE products registered in Malaysia from 2009 to 2014 to MOH procurement data. We calculated the utilization levels measured in standardised Defined Daily Dose (DDD) as DDD per 1000 population followed by 6 explanatory variables: Price per DDD, Market Competition, Market size, Expenditure, Generic share, and Formulary Category. The estimation was performed using Panel Data Regression with Random Effect Model.

RESULTS : Out of 363, only 132 formulations (36%) were utilized in MOH setting. The results suggested that estimated price elasticity of demand was inelastic at 0.92 and significant. The total spending, market size and market concentration were significantly positive related to utilization. The estimated marginal effect indicates that the utilization of NCEs if all factors held equal will increase by 1.7 percentage points with a higher market concentration. Generic share (% DDD) is negatively significant related to utilization whereas formulary with specialist category had a positive significant effect when compared to non-formulary. The time trend term was positive and significant implying a growing share of NCEs over time.

CONCLUSIONS : Understanding the determinants of new therapies’ utilization will help to improve public sector approach to ensure access to new medicines that are effective and affordable to the Malaysia's public healthcare system.