Overview:
Nearly half of the medicines, medical supplies and laboratory materials required by Palau’s public health system are currently out of stock, according to the Ministry of Health and Human Services. Officials say overseas supply disruptions, rising prices and regulatory restrictions are making it difficult to secure alternative suppliers.
By: Eoghan Olkeriil Ngirudelsang
Koror, Palau — Forty-eight percent (48%) of the prescription drugs, medical supplies and laboratory materials required by Palau’s public health system are currently unavailable, the Ministry of Health and Human Services has reported.
During a Senate hearing last month on the FY 2026–27 budget, Director of Hospital Services Clarette Matlab told lawmakers that “48% not in stock encompass medical supplies, drugs, and lab supplies”.
Matlab said the 48% shortfall is driven mainly by problems with overseas suppliers, including sudden price increases that force Palau to reopen negotiations just as shipments are due.
“Sometimes, when the drugs are about to be shipped, prices then increase so that we’d have to negotiate again back and forth,” she said.
Because Palau imports most of its prescription medicines from the United States, disruptions in the U.S. supply chain have a direct impact on local availability. Matlab explained that the U.S. relies on raw pharmaceutical ingredients from India and China, some of which are currently difficult to bring into the country, constraining production and exports.
“There is currently a supply problem in the United States. The U.S. uses raw ingredients from India and China, many of which they cannot bring into the U.S. right now and therefore cannot manufacture the drugs. So, if they do have them, they keep them to themselves and do not supply to us,” Matlab said.
Senators asked whether Palau could diversify its sources by importing directly from countries such as Taiwan or India. Matlab said authorities have attempted to obtain medicines from Taiwan, but international control mechanisms have repeatedly stalled those efforts.
“We have tried getting them from Taiwan but due to restrictions and policies of the international control board that they must go through, each time we ask – when we reach that point, they tell us that it cannot be obtained because of restrictions,” she said.
For India, Palau’s regulations require that imported prescription drugs be certified by the World Health Organization (WHO), the U.S. Food and Drug Administration (FDA), or the drug regulatory authorities of Australia and New Zealand.
Matlab said an Indian supplier once submitted a bidding proposal but was disqualified because the WHO does not recognize the Indian Pharmacopoeia, India’s official quality benchmark for medicines.
“In fact, there was an Indian Supplier who submitted bidding proposals but failed because WHO does not recognize the Indian Pharmacopoeia, so when bidders offer drugs approved only by this certification, then we cannot obtain them,” she said.
During the hearing, Senator Kuartei said that “not necessarily India, but any drug company must be certified by WHO, or we ask WHO to certify a company if we want to get such drugs, and they can actually do the certification for us,” Kuartei said.
The exchange highlights a core dilemma for a small island state like Palau: while global medicine supply chains are increasingly concentrated and prone to disruption, strict regulatory requirements intended to safeguard quality can sharply narrow the list of eligible suppliers.