Market Research Reports, Inc. has announced the addition of “CountryFocus - Healthcare, Regulatory and Reimbursement Landscape - Malaysia” research report to their offering.
Lewes, DE -- (SBWIRE) -- 04/22/2014 -- 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).
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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).
The patent expiry of innovative drugs opens up a significant commercial opportunity for generic drugs. Since 2012, a Bioequivalence (BE) study has been mandatory for the approval of all generic drugs in Malaysia, leading to an efficient regulatory system for generics and streamlining the approval process for them (NPCB, 2014g).
The Drug Control Authority (DCA) has a ‘‘queue’’ system for reviewing the applications and documents submitted for approval according to product category. The order of priority, from highest to lowest, is new chemical entities, biologics, generics, OTC drugs and traditional products. The drugs intended for the treatment of serious or life-threatening diseases are reviewed on a priority basis (NPCB, 2014c).
In February, 2012, the Medical Device Act 2012 or Act 737 and Medical Device Authority Act or Act 738 was published in the official gazette of Malaysia. Medical Device Act 2012 came into effect by end 2012 and has been undergoing a transition period before it is fully enforced in 2014. This act specifies the requirements for the registration of medical devices, licensing for medical device manufacturing and Conformity Assessment Body (CAB) registration (MDB, 2013a).
Private Sector Dominates Malaysian Healthcare System -
The lack of adequate facilities in the government healthcare set-up and high OOP expenditure result in the private sector dominating the healthcare system. The government provides an easy access to healthcare facilities to the population through primary care services such as 1Malaysia clinics. The primary care centers are prevalent in rural and urban areas, providing healthcare services to all of Malaysia’s population. However, the public prefer private healthcare services over public healthcare services, due to the unavailability of advanced diagnostic services and long waiting times and even the unavailability of required medicines in public healthcare facilities.
In 2011, public healthcare expenditure accounted for approximately 61.2% of total healthcare expenditure, while private healthcare expenditure accounted for approximately 38.8% (World Bank, 2014n). OOP expenditure as a share of total healthcare expenditure was valued at 41.7% (World Bank, 2014o). The lack of a law controlling drug prices creates extra burden on the public. There is no reference price policy in Malaysia, and prices are decided by manufacturers, wholesalers and retailers. The high retail price markups make drugs costly for the Malaysian population (Department of Statistics, 2014).
The government plans to introduce the NHIS, under the National Health Financial Scheme. This system will change the healthcare infrastructure, provide universal coverage to healthcare facilities and reduce the OOP payment of the population.
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Ministry of Health Healthcare Policies and Initiatives -
MoH’s healthcare policies and initiatives augur well for the growth of the healthcare system in Malaysia. The government is focusing on reducing the disease burden, especially that of the elderly population, in order to improve its global competitiveness. The MoH has framed a number of policies for the prevention and early detection of various disease conditions. Efforts are ongoing to improve the quality of life, workforce productivity and cost efficiency. This is expected to lead to improvements in patients’ health outcomes and quality of life.
- In 2010, the MoH introduced the Cardiovascular Disease and Diabetes Prevention and Control Program in Malaysia (2010–2014). This program was introduced under the National Strategic Plan for Non-Communicable Disease (NSP-NCD). Through this program, MoH is trying to reduce the prevalence of cardiovascular disease and diabetes.
- In 2009, MoH established the Malaysia Healthcare Travel Council (MHTC) to develop and promote the medical tourism industry. The purpose of MHTC is motivating public and private sector collaboration in setting up strategic plans for the promotion of healthcare services through promotional activities and increasing medical tourism.
- As of February 2013, the government had established 178 clinics through the 1Malaysia program (MoH, 2013a). These 1Malaysia clinics are operated by medical assistants, rather than doctors. They were established to reduce congestion in urban-based public hospitals.
Political Stability and Strong Government Initiatives have Resulted in Economic Growth -
In 2012, Malaysia was ranked 25th in the Global Competitiveness Index 2012–2013 for health and primary education facilities. It had been ranked 26th in the 2010–2011 period (MASTIC, 2013). Malaysia’s strong and consistent economic performance is due to its efficient and sound financial sectors, which place it among the world’s developed countries. The Transformation Initiative (2010) helped the economy enormously, by increasing investment and production in different sectors. Malaysia’s overall investment grew by 19.9% in 2012, compared with 6.5% in 2011. Private investment has increased threefold since the implementation of the ETP, increasing to 22% in 2012 (ETP, 2012a).
Owing to the multiple projects and initiatives implemented by the government, Gross Domestic Product (GDP) saw a constant growth from 2009 to 2013, and the deficit as a percentage of GDP decreased to 4% in 2013 (MoF, 2013). Significant growth in GDP, Gross National Income (GNI) and exports in the past two years shows the development of Malaysia’s economy.
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