This article was also published on PharmaPhorum
The pharmaceutical market in Malaysia is worth $3.2 billion, about three times the size of Singapore’s market. It is growing rapidly, at a pace of 11 percent per year. This is exactly double Malaysia’s overall 2012 growth rate of 5.5 percent. By comparison, Singapore had a growth rate of 1.3 percent, while the US and Europe had growth rates between 1 – 2 percent in 2012.
As Malaysia’s economy booms, spending on healthcare is up. The country’s 28.9 million people spend an average of $370 per year on healthcare, with about $70 of that devoted to pharmaceuticals. This is more than double the numbers from ten years ago. As per capita income rises, Malaysians are spending more of their disposable income on pharmaceutical products.
Malaysia relies on imports for most high end drugs. Foreign pharmaceutical companies — with one or two exceptions — do not manufacture their products in Malaysia, but distribute them through local distributors and their own sales force. GlaxoSmithKline, Eli Lilly, Pfizer, Novartis, Astra Zeneca and Schering Plough are some of the major foreign drug companies doing business in Malaysia.
Altogether, the Malaysian Drug Control Authority (DCA) has licensed more than 235 drug companies in Malaysia. Large local companies include Hovid Berhad, Pharmaniaga Manufacturing Berhad and CCM Duopharma Biotech Sdn Bhd. Local manufacturers produce mostly generics, especially antibiotics, injectables, painkillers and health supplements.
Pharmaceutical growth areas include treatments for non-communicable diseases like diabetes. One fifth of Malaysians over the age of 30 have diabetes, but fewer than half are diagnosed. As a result, foreign drug companies with strong diabetes portfolios (such as Novo Nordisk and Eli Lilly) are seeing rapid rates of growth in Malaysia.
GOVERNMENT HEALTHCARE POLICY
Malaysia’s government identified healthcare as a national key economic area (NKEA) in 2010. According to the NKEA plan, Malaysia’s goal is to grow its healthcare market from its current value of $10.1 billion to nearly $14 billion by 2020. To achieve this goal, Malaysia has already committed hundreds of millions to investments in clinical research, healthcare infrastructure and health tourism.
Malaysia is home to 335 hospitals, of which 135 are public. The remainder are private facilities. The NKEA plan calls for the Malaysian Ministry of Health (MOH) to construct an additional eight hospitals, 155 rural clinics, 45 community health clinics and another 45 “basic service” clinics by 2015.
The NKEA plan also calls to dramatically increase clinical research taking place in Malaysia. While there were fewer than a hundred clinical trials in 2009, Malaysia’s MOH hopes to host more than a thousand by 2020. In order to achieve this goal, the MOH has poured more than $12 million into setting up more than a dozen clinical research hubs across the country. The ministry has also set up working committees for streamlining regulatory processes, training local investigators and site coordinators and collaborating with foreign sponsors for patient recruitment.
Malaysia’s government is also encouraging foreign drug companies to set up operations in Malaysia through numerous tax incentives. Since 2011, multiyear tax holidays and duty exemptions have played a role in bringing six major Indian pharmaceutical companies to the country. These companies include Ranbaxy, Cipla, Strides Arcolab, Biocon and Dr. Reddy’s Labs. While the initial target of most of these companies is the Malaysian market, many also hope to use the country as a manufacturing hub for export to other Southeast Asian countries.
Malaysia’s National Pharmaceutical Control Bureau (NPCB) is in charge of licensing for pharmaceutical manufacturers, wholesalers and importers. Licenses are valid for one year and generally take one month to issue. Applications may be done both manually and online through the NPCB’s “Quest 2” system. Fees for wholesaler’s and importer’s licenses are about $160, while the fees for manufacturer’s licenses are about $325. All applications must include copies of the following:
- An organizational chart of the company, complete with staff names
- A floor plans for all relevant facilities
- A list of all storage facilities
- The company’s business license
- A Retention of Pharmacist certificate
- The company’s Registration of Company (ROC) certificate
- An annual registration certificate
- Information on the company’s products recall procedures
- The company’s Type A license (which authorizes a pharmacist to import and deal in controlled substances, in both wholesale and retail settings)
Additionally, applicants for manufacturing licenses must submit detailed layout plans of their facilities to the NPCB Center for Compliance and Licensing.
In order to register a drug in Malaysia, manufacturers must submit their application to Malaysia’s Drug Control Authority (DCA). The DCA is a division of the NPCB under the MOH. It handles the registration of drug products along with the licensing of manufacturers, wholesalers and importers. The DCA is also in charge of quality and safety monitoring for registered pharmaceutical products.
The DCA divides pharmaceutical products into the following categories:
- Generics (scheduled poisons)
- OTC generics (non-scheduled poisons)
- New Drug Products
Regular generics, new drug products and biologics must undergo a full DCA evaluation before approval. Some classes of OTC medicines (like antiseptics, topical antibacterials and nasal decongestants) can go through the abridged evaluation channel, instead.
Abridged evaluations take 180 days, and require the following application information:
- Product name
- Product description
- Dosage form
- Recommended dosage
- Administration route(s)
- The name and strength of the active substance and its excipient
- Pharmacodynamics data
- Pharmacokinetics data
- Side effects
- Warnings and precautions
- Recommended storage conditions
- Recommended shelf life
- Batch manufacturing formula
- Labeling and packaging information
Full evaluations take up to a year. They require data supporting product quality, safety and efficacy, in addition to the above listed administrative information. Imported product evaluations also require the submission of one of the following: 1) a Certificate of Pharmaceutical Product; or 2) a Certificate of Free Sale and a Good Manufacturing Practice (GMP) certificate from the country of origin.
Registration is good for five years, and all renewals must be finished six months before the expiration date on the original registration.
DCA fees are $325 per registration, with an additional $390 – $1,310 for laboratory testing fees. These laboratory fees are dependent on the number of active ingredients and the product type (such as new drug products or generic drugs).
All applications should be submitted electronically, through Malaysia’s “Quest 2” registration system. Those applying must be locally incorporated companies, and they must have a permanent address in Malaysia. In the case that the applicant is not the product owner, they must also include a letter of authorization from the product owner.
FOREIGN COMPANIES IN MALAYSIA
Indian pharmaceutical companies have recently led the charge to establish Malaysian manufacturing facilities. In 2012, Ranbaxy announced it was building a $40 million manufacturing plant that would triple its output in Malaysia to 3 billion doses annually. In 2011, Biocon began construction on a $155 million R&D and manufacturing facility in Johor. The facility will produce both biosimilar insulin and also insulin analogues. It will be operational by 2014.
Western drug companies are also increasing their footprint in Malaysia. In 2012, US-based Watson Pharmaceuticals took over Ascent Pharmahealth’s Malaysian facility after acquiring that company. Novartis — which already has several manufacturing plants in the country — in 2012 signed an MOU with Malaysia’s MOH.
Under the terms of the MOU, Malaysia’s MOH will aid Novartis in expanding market access for several of its innovative products. The MOH will also help Novartis expand its pool of candidates for clinical trials. In return, Novartis will sponsor training and professional development workshops for Malaysian clinical researchers and government investigators.
Novo Nordisk is also partnering with the MOH. In 2012, the two parties signed an agreement to start a nationwide diabetes awareness program. The program will include outreach activities for healthcare workers and diabetics, and it will also include a separate three year study.