CountryFocus: Healthcare, Regulatory and Reimbursement Landscape - Malaysia

Wednesday 23 April 2014, Amsterdam

Malaysia’s healthcare market has huge potential for growth. Medical tourism, easy regulatory guidelines, a lack of strict price regulation and an increasing elderly population, as well as the fact that Malaysia is not dependent on imported branded products, will provide the necessary impetus for its growth.

Its value was an estimated $1.2 billion in 2008 and is projected to reach approximately $3.7 billion by 2020, at a Compound Annual Growth Rate (CAGR) of 9.5% (MOPI, 2014). The proportion of Malaysia’s population aged 65 or above is expected to increase at a CAGR of 4.2%, from 5.5% in 2013 to 7.0% in 2020 (Department of Statistics, 2013b). Reforms, such as free outpatient registration for the elderly, will impose a financial and logistical burden on the healthcare system but will also act as a driver of growth in the healthcare market.

Medical tourism is another driving factor for Malaysia’s pharmaceutical and healthcare industry. Its healthcare tourism market increased by 51% in terms of revenue and 63% in terms of visiting foreign patients, between 2010 and 2012 (MHTC, press release, April 29, 2013). This growth has been supported by government policies, such as tax exemption for hospitals.  

Government initiatives that aim at increasing investment in the pharmaceutical industry, such as Entry Point Projects (EPP) and National Key Economic Areas, have so far been successful.  

Companies such as Chemical Company of Malaysia Pharmaceuticals, Biocon, Ranbaxy (Malaysia) Sdn Bhd and Kotra Pharma have made either significant investment or strategic agreements in Malaysia as part of the EPP3, which aims at increasing generic manufacturing for exports (ETP, 2013a). The expected patent expiry of drugs such as Abilify (aripiprazole), Celebrex (celecoxib) and Nexium (esomeprazole) will also drive the market.

The implementation, pending parliamentary approval, of a National Health Insurance System (NHIS), which will lead to universal healthcare coverage, is expected to be another driver of the pharmaceutical market. Currently, the lack of universal healthcare insurance forces people to purchase medicine from the open market and results in high Out-of-Pocket (OOP) expenditure.

The Malaysian medical device market is growing and constitutes approximately 25% of healthcare expenditure (ETP, 2012a). Initiatives, such as the voluntary registration system, launched in 2006, for medical device companies and the introduction of the Medical Device Act 2012, are expected to have a significant impact on the medical device market. In 2012, as a result of these initiatives, the medical device market saw a surge in investment from private companies. The size of the medical device market in Malaysia was approximately $585m in 2010 (ITA, 2008).


Malaysian Regulatory Authority

The Malaysian regulatory authority provides a transparent and efficient regulatory system to facilitate the approval of pharmaceutical products and medical devices, which positively influences the growth prospects of the healthcare market. In Malaysia, the National Pharmaceutical Control Bureau (NPCB) is the main regulatory authority for pharmaceutical products, working under the guidance of the Ministry of Health (MoH). The marketing authorization of a new drug requires certification from the NPCB and MoH for good laboratory practice and satisfactory safety, efficacy and quality. The total number of prescription (control medicines) and non-prescription (OTC) drugs registered in Malaysia was 23,805 during the 1991–2012 period (MoH, 2013b). The approval time for prescription drugs and non-prescription drugs is 210 working days (NPCB, 2014c).