Accompanying the growth opportunities of the market is a concerted drive by the Malaysian government to promote the healthcare
industry as an economic driver. Gone are the days when healthcare was considered purely in terms of service provision; the
key performance indicators for the Ministry of Health (MOH) are now seen in an economic light. Minister Liow explains: "There
has been a paradigm shift in the ministry's focus. The government is now examining how to make Malaysia's economy more competitive,
and this carries significant implications for the health sector in Malaysia."
The Economic Transformation Program (ETP) launched in October 2010 placed healthcare and pharmaceuticals as one of the 12
National Key Economic Areas designed to ignite the fires in Malaysia's economic engine.
Roshidah Abdullah, Director, Finance & Corporate Services, Pharmaniaga
The MOH has established six "Entry Point Projects" (EPP): health tourism, insurance services, clinical trials, generics manufacturing,
diagnostics services, and the creation of health metropolises. Taken together, these projects are designed to contribute US$
11 billion to the national economy by 2020.
Just in terms of clinical trials, the government is targeting a ten-fold increase by 2020, to 1,000 trials per year—something
Lee Toong Chow, managing director of CRO, Info Kinetics, feels is well within the country's capabilities. Malaysia's low-cost
facilities; English-speaking staff; and the National Medical Register, giving sponsors a detailed picture of the experience
of principal investigators, provide good advantages. Most importantly, however, Malaysia provides excellent ethnic diversity
for patient recruitment (50% Malay, 25% Chinese, 10% Indian, and 15% other). Indeed, Lee says his company's main selling point
was "to connect research with people in Asia." The MOH is further complementing these preexisting attributes with the expansion
of its 17 Clinical Research Centers. Secondly, the Malaysian Health Tourism Council was founded in June 2009, and although
witnessing a temporary fall in the number of medical tourists to Malaysia until mid-2010 due to the global recession, overall
the industry grew 25% in 2010. Minister Liow projects that the industry will grow 30% in 2011, eventually attracting 1.9 million
medical tourists by 2020 and contributing US$ 1.342 to the GNI.
Ultimately, the largest GDP contributor will derive from the domestic generics industry fueled by the patent loss of at least
15 blockbuster drugs over the next two to three years. Generics currently account for 33% of the domestic market in value
terms and 60% to 70% in volume—and this share could grow. However, the main growth will come from exports, and the Malaysian
trade promotion agency, MATRADE, is now aggressively promoting Malaysian pharmaceutical products in the ASEAN Economic Community
and in Middle Eastern and North African countries. The key differentiators for Malaysian generics in the international markets
will be their branded nature and Halal certification. In fact, with the global Muslim population approaching 1.57 billion,
providing a US$2.3 trillion market (excluding Islamic banking), there is great potential in providing pharmaceuticals which
conform to Halal food regulations. Overall, the government is targeting 22% year-on-year growth in the Malaysian pharma industry
to contribute US$ 5.4 billion to GDP by 2020.