BMI View: After years of rapid expansion, the outlook for Malaysia ' s pharmaceutical market is very positive , with medicine demand being driven by a growing population and rising disease burden We expect the government ' s commitment to the improvement of healthcare services and the expanding list of zero-rated medicines to help mitigate the negative effects of the Goods and Services Tax (GST) implemented last year. However, economic headwinds and continued political instability may harm growth prospects in the short-term.
Headline Expenditure Projections
Pharmaceuticals: MYR7.88bn (USD2.02bn) in 2015 to MYR8.58bn (USD2.09bn) in 2016; +8.9% in local currency and +3.8% in US dollar terms. Forecast in line with last quarter.
Healthcare: MYR49.31bn (USD12.63bn) in 2015 to MYR54.40bn (USD13.27bn) in 2016; +10.3% in local currency and +5.1% in US dollar terms. Forecast revised upwards from last quarter.
|f = BMI forecast. Source: domestic companies, local press, BMI|
|Pharmaceutical sales, USDbn||2.210||2.020||2.090||2.380||2.620||2.880||3.160|
|Pharmaceutical sales, % of GDP||0.67||0.68||0.69||0.70||0.71||0.72||0.74|
|Pharmaceutical sales, % of health expenditure||16.2||16.0||15.8||15.6||15.4||15.3||15.1|
|Health spending, USDbn||13.630||12.630||13.270||15.260||16.990||18.890||20.960|
Malaysia's Pharmaceutical Risk/Reward Index (RRI) score for Q316 is 59.0 out of 100, unchanged from the previous quarter's score. The country is ranked as the eighth most attractive pharmaceutical market in the Asia Pacific region, just below Singapore (59.7) but above New Zealand (51.0). Malaysia scores above the regional average for each indicator of our matrix.
In April 2016, National Health and Morbidity Research revealed that mental health issues among 16-year-old Malaysian youths increased from 10.7% in 2011 to 29.2% in 2015.
According to the Ministry of Health, there have been over 42,000 dengue cases reported in Malaysia from January 1 to April 22 2016.
In April 2016, the Malaysian parliament approved the motion to double the list of zero-rated medicines under the Goods and Services Tax, bringing the number to 8,630.
The Malaysian government hopes to decide by June whether to use Sanofi's Dengvaxia, the world's first dengue vaccine, already licensed in Mexico, Brazil, El Salvador and the Philippines.
In March 2016, the Malaysian Health Minister stated that the medical tourism sector hopes to provide MYR1.30bn (USD326mn) to the country's revenue this year.
BMI Economic View
The Malaysian economy continues to face multiple challenges, as reflected in high frequency data such as trade and inflation. Continued political instability and external headwinds will be hurdles to higher growth, and we forecast real GDP growth to come in at 4.5% in 2016 (versus 5.0% in 2015).
BMI Political View
The signing of the Citizens' Declaration and Mahathir's resignation from UMNO has strengthened the party's resolve and will prompt it to close ranks and rally behind Najib for survival. With support from the grassroots being key to Najib's power, we expect his position to remain secure for as long as he has the backing of UMNO's division heads, ensuring policy continuity.
The Malaysia Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Malaysia Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Malaysia pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Malaysia, to test other views - a key input for successful budgeting and strategic business planning in the Malaysian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Malaysian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Malaysia.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.