Health and medical to Malaysia
(Last updated: 7 March 2013)
Trends and opportunities
The market
Healthcare in Malaysia is delivered by various public, private and Non-Governmental Organisation (NGO) providers through conventional, traditional and complementary medicine. The government is the main healthcare provider in the country and healthcare is heavily subsidised. Private healthcare costs are fully borne by patients and/or their insurers.
Malaysia’s increasingly affluent society demands international standards of medical care and services. Healthcare expenditure in Malaysia was estimated at A$12.8 billion in 2011, equal to around A$447 per capita and about 4.3 per cent of GDP. (Sources: Episcom, The Pharmaceutical Market: Malaysia, | Business Monitor International, Malaysia Pharmaceuticals & Healthcare Report, 17 January 2013)
The healthcare industry is managed by the Ministry of Health (MOH). The MOH operates the country’s network of government hospitals and public clinics, and trains medical personnel. Private healthcare is one of the 12 National Key Economic Areas that were identified by the government in its 10th Malaysia Plan (a medium-term spending plan from 2011 to 2015). The Government has allocated RM19.3 billion for healthcare management and development services in 2013. There are several strategic goals to be achieved which include transforming delivery of the healthcare system, increasing quality, capacity, and coverage of healthcare infrastructure and increasing the quality of human resources for health.
The primary challenges faced by the healthcare industry include: an overburdened public system, an ageing population, increasing financial burden to the state treasury (due to heavy subsidisation), and increasing incidences of lifestyle-related and chronic diseases. Heart disease, cancer, hypertension and circulatory problems account for most deaths and cases of hospitalisation in Malaysia. Osteoporosis is also a growing problem in Malaysia.
Medical Devices
Malaysia’s medical devices and supplies are mainly imported, especially for high-tech medical devices. Espicom Business Intelligence estimates current growth in the market to be a strong at 9.1 per cent per year, reaching US$1.9 billion, or US$61 per capita, by 2016.
The country’s medical device exports are dominated by latex products such as surgical gloves and catheters as Malaysia’s major natural resource is rubber. The government offers incentives for local manufacturers to produce more advanced medical equipment.
Pharmaceuticals
The market is based on a strong domestic generics sector and heavy reliant on imports of branded and patented medicines. The production of generic drugs has high potential due to the expiration of patents for blockbuster drugs over the next decade. Total spending in Malaysia on pharmaceuticals (including over-the counter, or OTC, drugs and prescription drugs) was estimated at around RM5.55 billion (A$1.72 billion) in 2011. (Source: Business Monitor International, Malaysia Pharmaceuticals & Healthcare Report, 17 January 2013)
The pharmaceuticals industry, especially through drug manufacturing and clinical trials, will continue to develop as an increasingly attractive option for foreign firms, with high levels of government support in the form of tax incentives, Entry Point Projects (EPP) and increased research and development initiatives.
Medical Tourism
Malaysia aims to become the hub for medical devices in Asia and the preferred destinations for healthcare tourism due to the low costs of healthcare services, complemented by advanced medical technology and infrastructure. In 2011, approximately 583,000 medical travelers sought treatment in Malaysia and among the most sought-after treatments were orthopedic, cardiac care and cancer. The country’s healthcare services are in high demand among patients from Indonesia, India, Japan, Britain and the United States. The government provides incentives to private hospitals to upgrade their facilities for medical tourism to ensure private hospitals have international standards of healthcare facilities. (Source: Malaysia Healthcare Travel Council)
Aged care
Aged Care facilities in Malaysia are still largely in the early stages of development. Retirement homes in the country are mostly owned and run by private companies or charitable organisations. It is a rising concern in the market for both the government and private sector as:
- 3.4 million people, amounting to 9.9 per cent of the population in Malaysia are forecasted to be above the age of 60 by 2020. By 2035, Malaysia is expected to have ‘achieved’ the status of an ageing society with 15 per cent of the population above the age of 60. (Sources: Department of Statistics, Malaysia, Population and Housing Census, Malaysia 2010 | United Nations, 'Malaysia country profile')
- MM2H (Malaysia My Second Home) program is heavily promoted by the government as a national agenda to encourage more foreigners to retire in Malaysia.
The ageing population in Malaysia is likely to create a strong demand in the market for aged care facilities, services and expertise by the general public, and private and public sectors.
Opportunities
- Innovative, specialised and niche medical equipment
- Products and services that support medical tourism
- Health and dietary supplements
- Aged care facilities and services
- Education and Training in specialised medical education for professional nursing and healthcare education programs
Competitive environment
Despite government initiatives to encourage local production of medical products, the country remains heavily reliant on imports for healthcare products such as heath supplements, high tech medical equipment, and training and development in healthcare services. Domestic manufacturers are encouraged to move up the value chain with more advanced products, increased R&D investment and increased production capability rather than focus on basic goods.
The government encourages multinational manufacturers to set up in Malaysia as the country has the potential to be a distribution hub for other ASEAN countries. Ansell (Australia), B. Braun (Germany), Johnson & Johnson (America), are some of the major players in the country. Although Australia is not a main supplier of medical equipment and supplements to Malaysia, Australian companies have been successful in penetrating the market with their offerings of innovative/niche medical products, supplements and services. Australian health and supplement companies have set up sales offices in Malaysia and there are also Australian contract manufacturers supplying products with local brand names.
Major private healthcare players in Malaysia include:
Most private healthcare providers are planning to expand beyond major cities, aiming to increase their penetration rate and reach patients over a wider geographical area.
IHH is the healthcare arm of Malaysia's state investor, Khazanah Nasional Bhd. Its assets include the Turkish Hospital Group Acibadem AS, Singapore's Parkway Holdings, India's Apollo Hospitals Enterprise Ltd, Malaysia-based Pantai Hospitals and International Medical University (IMU). This supports Malaysia’s objective of becoming a major participant in the global healthcare industry. Other leading private healthcare providers include KPJ Healthcare, Sime Darby Healthcare, HSC Medical Centre, Prince Court Medical Centre and Sunway Medical Centre.
Major pharmaceutical companies in Malaysia include Pharmaniaga, Chemical Company Malaysia, Prime Pharmaceutical and Hovid Pharmaceutical. Major multinational pharmaceutical companies that have presence in the country are GlaxoSmithKline, Pfizer, Merck & Co, Sanofi and Novartis.
Tariffs, regulations and customs
In the 1980s, the Drug Control Authority was set up under the Food and Drug Act, and the National Pharmaceutical Control Bureau (NPCB) was set up to implement the requirements of the act.
Malaysian authorities are very strict with registration of supplement products, especially products with a variety of active ingredients. All herbal, health and dietary supplements, and traditional medicines are classified as non-poison, over-the-counter (OTC) or traditional products in Malaysia and are regulated by the NPCB under the Ministry of Health.
The Drug Control Authority of the NPCB is the executive body that is responsible for the safety, quality and efficacy of pharmaceutical, health and personal care products in Malaysia. All manufacturers, importers and wholesalers of herbal, health and dietary supplements and traditional medicines are required to register with the Drug Control Authority.
The Medical Device Bill, Malaysia’s first set of medical device regulations, was finalised in March 2008, and the next step will be for it to be tabled and approved by parliament. There is currently no mandatory registration for medical devices, but this is expected to change, along with other related regulations involving production and importation of medical devices (including those used for surveillance and monitoring).
Marketing your products and services
The various channels of entry into the Malaysian health industry are:
- Direct marketing by principal companies
- Sales through local agents or distributors
- Sales through trading houses
- Direct sales to re-sellers (e.g. pharmacies, rehabilitation centres)
- Direct sales to end users (e.g. hospitals, clinics, medical practitioners)
Malaysian companies are very open and receptive to new products and services; if planning to export to Malaysia:
- Be prepared to visit the Malaysian healthcare sector regularly (at least two to three times a year)
- Follow up on previous visits (through telephone, email or faxes)
- Learn about cultural issues in Malaysia
- Prepare information packs about your company, products and services offered
- It is preferable to have a local agent or distributor
Distribution channels
Direct export is the most common entry strategy in the provision of services. This includes management, consultancy and training programs. These export transactions are concluded through direct negotiations with end customers.
For indirect exports, establishing a local presence is important and there are various ways to do this:
- Appoint an agent or distributor
- Form a joint venture partnership
- Form a short-term partnership (e.g. one or two year contract with opportunity to review the partnership at the end of each term)
- Form ‘ad-hoc’ partnerships (different partners for different projects)
- Set up a local office.
Links and industry contacts
Government, business and trade resources for Malaysia
Malaysian Government Official Portal – www.malaysia.gov.my/EN/Pages/default.aspx
Malaysian External Trade Development Corporation (MATRADE) – www.matrade.gov.my
Malaysian Investment Development Authority (MIDA) – www.mida.gov.my/env3/
Ministry of Foreign Affairs – www.kln.gov.my/web/guest/home
Ministry of Trade and Industry (MITI) – www.miti.gov.my/cms/index.jsp
Multimedia Development Corporation (MDeC) – www.mdec.com.my
Ministry of Information, Communication and Culture – www.kpkk.gov.my
Malaysian Communications and Multimedia Commission – www.skmm.gov.my
Ministry of Science, Technology and Innovation – www.mosti.gov.my
Central Bank of Malaysia (Bank Negara) – www.billionm.gov.my
Department of Statistics Malaysia – www.statistics.gov.my/portal/index.php?lang=en
Economic Planning Unit (EPU) – www.epu.gov.my/home#=e
Royal Malaysian Customs Department – www.customs.gov.my/index.php/en
Australia Malaysia Business Council – www.ambc.org.au
Malaysia Australia Business Council – www.mabc.org.my
The World Bank – www.worldbank.org/en/country/malaysia
The International Monetary Fund – www.imf.org/external/country/MYS/index.htm
Please note: this list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only.
Contact details
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