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Malaysia Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Sep 2011, Pages: 101
Business Monitor International's Malaysia Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Malaysia's pharmaceuticals and healthcare industry.
BMI View: Malaysia remains a moderately attractive South-East Asian pharmaceutical market. Key positives include economic development and the government’s drive to increase biotechnology investment in the country, supported by epidemiological and demographic factors. However, per-capita expenditure on medicines – much of which is sourced out-of-pocket – will continue to represent a drag on annual growth rates, while also encouraging the use of cheaper generic medicines.
Headline Expenditure Projections
- Pharmaceuticals: MYR4.51bn (US$1.40bn) in 2010 to MYR4.83bn (US$1.61bn) in 2011; +7.1% in local currency and +14.7% in US dollars. Forecast unchanged from Q311.
- Healthcare: MYR36.39bn (US$11.32bn) in 2010 to MYR38.93bn (US$12.98bn) in 2011; +7.0% in local currency and +14.6% in US dollars. Forecast unchanged from Q311.
- Medical devices: MYR3.51bn (US$1.09bn) in 2010 to MYR3.74bn (US$1.25bn) in 2011; +6.7% in local currency and +14.3% in US dollars. Forecast unchanged from Q311.
Business Environment Rating: In our latest update of the Business Environment Ratings (BERs) matrix, Malaysia remains ranked eighth in the Asia Pacific region, out of the now 18 countries surveyed (following the addition of New Zealand). Its slightly lower rating of 59.3 suggests an operating environment that poses some risks to multinationals, yet offers a respectable long-term regional prospect. However, its rewards profile remains the lesser attractive component of its composite score, dragged down by factors such as low per-capita spending.
Key Trends & Developments
- In July 2011, the Malaysian government launched Clinical Research Malaysia (CRM) in a bid to attract clinical trials to the country. CRM will operate as a non-profit government site management organisation for providing access to 23 clinical research centres (CRCs) and independent CRCs, built in private hospitals and medical universities in the country.
BMI Economic View: The Malaysian government is confident that the country will be able to overcome the repercussions of the global economic slowdown. Despite global economic uncertainties, Malaysia should still be able to register a 5-6% GDP growth in 2011. The country's real GDP growth figure came in at a better than expected 4.0% year-on-year (y-o-y) in Q211, compared with a consensus estimate of 3.6%, although this was still a drop quarter-onquarter (q-o-q). We are also optimistic that despite a stalling economic recovery in the US, domestic demand will remain resilient.
BMI Political View: The implementation of the government’s Economic Transformation Plan (ETP) suggests that public spending should remain elevated over the coming quarters, but also place further strain on the country's fiscal position. Furthermore, the Malaysian government is unlikely to implement measures to withdraw welfare subsidies in the lead up to general election (expected to be held in 2012). This means a slowdown in public spending – including on medical services and pharmaceuticals – is unlikely over the coming quarters, despite growing concerns over Malaysia's fiscal position. Nevertheless, we do not envisage a risk of a funding crisis.
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