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Strengths
• Progressive Government Policy, aim at attracting international investment
• Improvement in manufacturing standards
• Government is commitment to biotech sector development and there has been a robust market
growth in recent years
• Absence of price controls in the private sector with a sizeable generics market, founded on low
patient purchasing power and traditionally
• Lax patent laws
• Prescribing and dispensing presently dealt with by general practitioners, boosting overall values of
the prescription mark
• Manufacturing of halal medicines improving access to other Islamic markets in the region
Weakness
• Markedly behind key players in the region such as South Korea, Singapore and Taiwan in terms
of pharmaceutical expenditure and FDI
• Lax patent law remains evidently below international standards
• Aim to increase generic drug production worsens operating conditions for multinationals
• Strict policy that is biased towards local drug producers and local manufacturer output comprise
predominantly on inexpensive, basic medicines
• Market reliant on imports
Opportunities
• Generics sector as an integral factor of market growth
• Exports growing in the face of rising regional and global demand, as well as increasing trade links
with increase in sophisticated pharmaceutical demand
• Government desire to prevent and contain disease outbreaks with ASEAN harmonization in
encouraging adoption of Western regulatory standards
• Investment in the biotech sector development supported by government initiatives and planned
investment in the expansion of medical facilities
• Malaysia becoming an attractive location for medical tourism and more transparent legislation and
the attraction of foreign investment
• Pending FTA with a number of key trading partners
• Malaysia offers a considerable contract manufacturing opportunities
Threats
• Government resistance to aligning domestic patent law fully with international standards and
failure to revise discriminatory pricing policy
• Existence of a significant counterfeit drugs sector
• Increased focus on internationally recognized norms and legislation to disadvantage local players
Pharmaceutical Analysis
• Malaysia is rank 5th out of 15 regional markets in this report, behind Australia, Japan, South Korea
and China. (This rating is done based on the pharmaceutical market, country structure, market risk
and country risk indicators)
• Key attractions are the government’s encouragement of the biotechnology sector and the strong
annual growth in its pharmaceutical market.
• Relatively low per capita consumption of pharmaceuticals, due to the low- to middle-income
status of the Malaysian economy, together with a high share of out of pocket payments that makes
demand for pharmaceuticals very income sensitive.
• Counterfeit drug industry, difficulty in applying process patents, the lack of data and poor
regulatory enforcement will continue to pose major drawbacks to multinationals.
• The generic sector mainly intended for the domestic market will gain in terms of volume where
leading domestic producers include Asia Pharmaceutical Products and Pharmaniaga.
• Forecast that the annual growth rate will increase from MYR4.12bn (US$1.22bn) in 2008 to
MYR5.96bn (US$1.96bn) in 2013.
Medical Devices Analysis
• Matrade released figures showing that exports of healthcare services and low-end medical devices, such as
surgical gloves, reached a value of MYR3bn (US$937mn) in 2007.
• Malaysia has around 180 small and medium-size manufacturers of medical devices. However,
numbers involved may increase during economic downturn, as players from other industry; ie:
engineering and product packaging turn to medical devices to combat falling demand for their
products.
• Malaysia’s Top Glove is the world’s largest producer of rubber gloves. Its 20 factories churn out nearly
15bn pairs of gloves annually and export goods to 180 countries.
Pharmaceutical and Drugs Regulations
• Drug Control Authority (DCA) under the auspices of the Ministry of Health is the main
regulatory authority.
• Five items of legislation form the basis for market regulation: The Poisons Act 1952 (Revised
1989); The Sales of Drugs Act 1952 (Revised 1989); The Medicines (Advertisement and Sales)
Act 1956 (Revised 1983); The Registration of Pharmacists Act 1951 (Revised 1989); and The
Dangerous Drugs Act 1952 (Revised 1980). Drug registration processes are lengthy, at up to two
years.
• Between 1991 and the end of 2008, Malaysia registered some 207,911 medicines in total, of which
154,507 are imports, according to the Ministry of Health’s figures released in January 2009.
(APPENDIX I)
• Investment in BioNexus companies rose from MYR1.1mn in 2007, to MYR1.3bn in 2008, with
92 such companies being developed by BioCorp in the course of 2008 (up by 119% y-o-y).
• With the BioNexus Status, companies are eligible for perks and privileges such as Tax Incentives and the
Bill of Guarantee
• Biotech Corp. provides funding as well ie: Seed Fund, Malaysia Life Science Capital Fund (MLSCF),
R&D Matching Grant and International Business Development Fund.
• There are 26 Healtcare based companies that have been awarded the BioNexus status. Ie:
StemLife Sdn. Bhd., Malaysian Vaccines and Pharmaceuticals Sdn. Bhd. and Inno Biologics Sdn.
Bhd.
Health Economics
Source: Wikipedia, Health Economic Issues in Malaysia
Health Economics
• A branch of economics concerned with issues related to scarcity in the allocation of health and
health care.
• Studies the function of the health care system and the private and social causes of health-affecting
behaviors.
• The topics of health economics are:
- What influences health? (other than health care)
- What is health and what is its value
- The demand for health care
- The supply of health care
- Micro-economic evaluation at treatment level
- Market equilibrium
- Evaluation at whole system level; and,
- Planning, budgeting and monitoring mechanisms.