PETALING JAYA: Malaysia’s pharmaceutical industry will continue gaining momentum, driven by government incentives to propel local investment in the market, said BMI, a Fitch Solutions company.
It said Malaysia’s New Industrial Master Plan (NIMP) 2030 will promote the integration of value chains for better local production of active pharmaceutical ingredients (API), vaccines and medicines.
“By capitalising on these strategies, we believe Malaysia can attract more investments and position itself as a regional leader in the pharmaceutical industry.
“Pharmaceutical sales were RM11.2 billion in 2022, and we forecast medicine sales to increase to RM15.5 billion in 2027, equating to a compound annual growth rate (CAGR) of 6.7% in local currency terms (5.6% in US dollar terms),” it said in a commentary released today.
NIMP 2030 was launched on Sept 1, with the government announcing an allocation of RM8.2 billion to the national industrial master plan to enhance local manufacturers’ competitiveness.
The country aims to enhance its strategic competitive positioning across 21 industry sectors, with aerospace, chemical, electrical and electronics (E&E), pharmaceutical and medical devices recognised as priority sectors under the NIMP.
Under the plan, the investment, trade and industry ministry, health ministry, Malaysian Investment Development Authority (Mida), and Medical Device Authority (MDA) will collaborate to establish a supportive ecosystem for the industry.
Nevertheless, BMI said that medicine pricing controls would continue to weigh on multinational drugmaker profits and discourage foreign enterprises.
In May 2019, Malaysia announced price control measures for medicines in the country that are based on external reference pricing (ERP), which involves benchmarking local prices against lower drug prices in other markets.
BMI said that the price controls will continue to be implemented at both the wholesale and retail levels.
“As such, it is our view that price controls will have a significant impact on innovative drugmaker profit margins in the country, and this will potentially limit multinational investment,” it noted.