The pharmaceutical industry in Malaysia is currently valued at more than US$300 million and is growing at an average annual rate of ten percent. By 2005, it is expected to account for 45.9 percent of the entire healthcare industry, or US$539.47 million of US$1.173 billion. Local companies make up about one-third of the roughly 300 pharmaceutical companies registered in Malaysia. Their twenty to thirty percent command of the market is nearly double than what it was a decade ago. Despite this, multinational corporations (MNCs), which manufacture more patented products, still control the largest market share.
The production of generic drugs is expected to become a significant factor in the expansion of the local pharmaceutical industry, as data indicate that consumers are substituting less expensive generic drugs for costly imported drugs. Five billion dollars of medical product patents expire in Malaysia each year, and in the future Malaysian companies will most likely manufacture more of these low cost products. Already, two of the largest Malaysian pharmaceutical companies, Pharmaniaga Bhd. and Apex Healthcare Bhd., have started producing generic drugs, and both have seen a substantial net profit increase. Preferential government treatment for domestically manufactured products will further foster local companies to enter this profitable market, and expedite the growth of the Malaysian pharmaceutical industry.