Delisting A Poison: A Costly Fallout And Nicotinization of a Nation

Assessment by Yogarabindranath Swarna Nantha, Sean Thum, Hoomashini Gunasegaran

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Source for policy review

1.   Boo Su-Lyn. High Court rules liquid nicotine was delisted unlawfully [Internet]. CodeBlue. 2026 May 15 [cited 2026 May 18]. Available from: https://codeblue.galencentre.org/2026/05/high-court-rules-liquid-nicotine-was-delisted-unlawfully/

2.   Kenyataan Media (17^th May 2026) – Kementerian Kesihatan Malaysia – Maklumbalas Berhubung Keputusan Mahkamah Tinggi Kuala Lumpur Mengenai Isu Pengecualian Cecair And Gel  Nikotin Daripada Akta Racun 1952

3.   Berita Harian. KKM akan kemuka rayuan keputusan mahkamah berhubung pengecualian nikotin - Dr Zaliha [Internet]. 2026 May 12 [cited 2026 May 18]. Available from: https://www.bharian.com.my/amp/berita/nasional/2026/05/1557460/kkm-akan-kemuka-rayuan-keputusan-mahkamah-berhubung-pengecualian

4.   CodeBlue. Cutting civil servants’ salaries ‘absolute last resort’: PM’s economic adviser [Internet]. 2026 May 14 [cited 2026 May 18]. Available from: https://codeblue.galencentre.org/2026/05/cutting-civil-servants-salaries-absolute-last-resort-pms-economic-adviser/

Problem Statement

Another imbroglio—the Ministry of Health Malaysia (MOH) finds itself in the eye of the storm amid yet another round of public scrutiny, if not outright contempt. On 15 May 2026 —in what is increasingly being regarded as a moral victory for the public—the High Court of Kuala Lumpur overturned the declassification of liquid nicotine as a poison, a stunning volte-face to a decision made by then Health Minister Dr. Zaliha Mustafa on 21 March 2023.

The response from MOH was immediate—a public statement was issued on 17 May affirming its respect for the rule of law. MOH pledged to take the necessary steps to comply with legal procedures and convene broader stakeholder discussions to determine what further measures could be taken to protect the health of the nation.

Coming to the defense of her earlier reasoning, Dr. Zaliha cited “economic reasons” as the basis for her policy decisions. Yet a closer examination suggests a fundamental misreading of the highly predictable dynamics of market forces.

The delisting of nicotine, which was undertaken amid the spectre of a potential addiction crisis, has now set into motion both market and non-market forces that may prove exceedingly difficult to reverse without colossal effort and sustained commitment from the government.

Proposal Highlights

For contextual clarity, a brief recap of the events preceding the delisting process is, at this point, necessary.

The 2023 decision was undertaken against a backdrop of several established scientific realities. Firstly, smoking prevalence remains at 19% despite a high level of public awareness (80%) regarding its detrimental health effects (Global Adult Tobacco Survey, 2023). Secondly, this finding alone suggests that conventional tobacco control policies have had limited effectiveness in addressing the entrenched nicotine dependence now observed within the population, particularly following the delisting and wider accessibility of high-concentration nicotine products (Global Adult Tobacco Survey, 2023).

Prior to its removal from the Poisons Act 1952, nicotine was governed under a tightly controlled regulatory regime. This move centralized authority within the state, creating a quasi-monopolistic structure in which distribution, formulation, and access were subject to strict oversight. In such a system, regulation actively shaped market behaviour. Firms were compelled to internalize a portion of the negative externalities associated with nicotine consumption through compliance costs, licensing requirements, and enforcement risks.

This produced three important effects. Firstly, high regulatory barriers deterred low-quality or short-term actors and suppressed opportunistic market entry. The quality of products available in the market remained relatively inelastic despite fluctuations in demand, meaning that product standards remained stable. Additionally, profit margins were indirectly capped by compliance obligations and exposure to enforcement actions. As a result, the industry existed in a state of controlled viability in which commercial activity was possible, but structurally dependent on regulatory tolerance.

Analysis

Once liquid nicotine was delisted, a substantial share of the market swiftly shifted into the hands of the nicotine industry itself. This transfer of largely undiluted control over an addictive substance carries significant societal and regulatory implications. Numerous companies quickly entered the liquid nicotine sector, capitalizing on a narrow policy window in which comprehensive societal guardrails and a modern regulatory framework had yet to catch up.

Within this regulatory vacuum, market forces began to overwhelm the non-market safeguards traditionally intended to restrain excessive profit-seeking behaviour. Liquid nicotine products now remain not only unstandardized, but effectively unregulated across varying nicotine concentrations and formulations. Consequently, product quality has become increasingly elastic in response to market demand. In the absence of meaningful oversight, the stage is thus set for a potentially rapid and unpredictable deterioration in product quality.

However, this deterioration often remains obscured by the fluid nature of consumer behaviour. Consumers can easily migrate from one brand to another among the multitude of companies that have proliferated under these policy lapses, each promising a supposedly “better” nicotine experience. Rather than collectively voicing dissatisfaction or exiting the market in a manner that signals declining standards, consumers simply transition between competing products. A classic scenario of tasting "old wine in a new bottle" gradually unfolds.

Unfortunately, companies may remain unaware that their products require quality recuperation or market correction, as market churn masks the underlying erosion of standards. Worse still, markets may respond through a destructive game of attrition, using dangerous escalation in the nicotine content of their products as a means of justifying competitive advantage. At the time of writing, we are already witnessing these trends take on a life of their own within society, slowly transforming from warning signs into lived reality (NCSM, 2023).

The immediate impact of this action is already palpable. The market is now saturated with nicotine salt e-liquids, many containing nicotine concentrations nearly double those of conventional free-base nicotine formulations. Nicotine salts, notoriously, deliver greater nicotine doses with far less throat irritation, allowing users to comfortably inhale higher concentrations without restriction (NCSM, 2023). Taken together, these developments suggest that delisting nicotine has created fertile ground for the industry’s use of fruit flavours to entice youth initiation and addiction, particularly among vulnerable adolescents from lower-income groups (MOH, 2021).

Only time will tell what impact the delisting will have on national health in the long run. We may soon learn whether profits were made at the expense of—or in exchange for—a legacy of unprecedented health burdens.

Policy Implications

Realistically, this move does create a new revenue stream for the government. To be fair, this reflects the deeper structural constraint of Malaysia’s continued dependence on a relatively narrow fiscal base. In such a context, the temptation to open up new revenue streams, particularly from high-demand sectors, is understandable.

But this is precisely where the policy tension lies.

Revenue derived from harmful or addictive goods introduces a form of fiscal entanglement in which the state becomes, to some extent, dependent on the continued consumption of the very products it seeks to regulate. Over time, this creates conflicting incentives between revenue optimization and harm minimization. In this respect, MOH cannot have its cake and eat it too—it is not possible to achieve chronic disease reduction targets while simultaneously increasing exposure to their primary risk factors.

On another note, by justifying the decision to delist nicotine under the pretext of economic benefit, we may fall victim to a profound miscalculation, namely a "state-induced" economic burden attributable to smoking. When indirect and intangible costs are taken into account—such as lost productivity due to illness and premature death—the annual cost-of-illness attributable to smoking reaches a staggering RM18.39 billion (Global Adult Tobacco Survey, 2023).

This is why this issue cannot be reduced to a simple question of whether revenue is needed. Rather, it compels us to ask: what is the long-term model for healthcare financing?

At present, Malaysia’s healthcare system remains heavily reliant on general taxation. While this has enabled broad access, it is increasingly strained by demographic shifts, epidemiological transition, and rising cost complexity. However, after weighing both tangible and intangible costs, do tobacco excise duties sufficiently offset the associated healthcare expenditure? If new revenue streams are to be introduced, they must be structurally aligned with public health goals, not placed in contradiction to them.

The fundamental problem with the delisting of nicotine from the Poisons List is one of policy coherence. Following the poorly advised move in 2023, we have witnessed a rise in youth vaping, the mixing of illicit substances into vape liquids, and, more worryingly, healthcare costs associated with treating these complications exceeding the tax revenue collected.

This is concerning because revenue cannot be pursued in a manner that expands future health liabilities faster than it finances them.

Step Forward and Proposed Actions

The High Court’s decision now places policymakers in a genuine and complex conundrum.

On one hand, there is an immediate obligation to restore legal and regulatory integrity. On the other, the market that has already been liberalized cannot simply be rolled back without generating significant economic and enforcement disruption.

We welcome the Ministry’s statement indicating that it will work closely with the Attorney General’s Chambers (AGC). This reflects that the institutional commitment to operate within the rule of law remains intact. However, at this stage, procedural correctness alone is insufficient.

What is required is decisive policy coordination under conditions of uncertainty. The next phase must move beyond statements toward structured action. This includes the rapid reinstatement of regulations to close the most dangerous gaps in nicotine concentration, labeling, and distribution; the introduction of interim guidelines capable of functioning while comprehensive legislation is being recalibrated; and the establishment of clear enforcement signals to prevent further opportunistic expansion during this window of uncertainty. Above all, this requires multi-stakeholder integration that prioritises clinicians and public health experts within a controlled yet transparent policy design process.

Without this, the system risks entering a prolonged grey zone in which legality is contested, enforcement is inconsistent, and harm continues to accumulate. The government must be the voice that signals the direction of both market and non-market forces, leaving the nicotine industry to comply with the needs of the nation.

A careful balance between economic realities and public health priorities is essential. We cannot afford to destabilize market systems while simultaneously compromising population health. The question, therefore, is not whether action should be taken, but rather what practical measures can be implemented now, including the following

1. Establish nicotine-content thresholds under Ministry of Health (MOH) regulation—The MOH should determine permissible nicotine concentration limits for commercially available vape products. At present, only products containing very low nicotine concentrations should be permitted for open retail sale. Products with higher nicotine content should require clinical assessment, prescription authorization, and controlled dispensing through licensed pharmacies.

2. Implement stronger taxation policies on both cigarettes and vape products—Aggressive excise taxation should be imposed on combustible tobacco products as well as vaping products, particularly high-nicotine liquids. Differential taxation based on nicotine concentration may help discourage excessive nicotine dependence while preserving regulatory control over the market.

Final Verdict

Health is a collective enterprise, not a monopoly to be dictated solely by market forces or reduced to the pursuit of profit. Therefore, decisions involving public health should emerge from careful, multidisciplinary stakeholder engagement that is willing to accommodate dissenting voices capable of shaping a more balanced and sustainable policy framework.

Effective governance requires the humility to recognize that no single individual possesses a complete monopoly over truth or reality. As Baltasar Gracián once observed, “The greatest mistake is he who believes himself wise while regarding all others as ill-informed.” In this context, the handling of the issue reflects yet another “C” verdict.

1. Structural Frame — C 

2. Human Resource Frame — D+

3. Political Frame — D

4. Symbolic Frame — C 

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