Malaysian govt encouraging biotech sector of pharma market

In the Business Environment Rating (BER) matrix for the fourth quarter of 2009, Malaysia has considerably improved its position in the Asia Pacific matrix, and is now ranked fifth out of the 15 key regional markets, according to a new report from Business Monitor International.

Key attractions of the Malaysian pharmaceutical market are the government's encouragement of the biotechnology sector and the forecast steady annual growth in its pharmaceutical market. On the other hand, per-capita pharmaceutical consumption is quite low, especially due to high out-of-pocket payment levels, which make the market vulnerable to the current economic crisis, the report notes. Nevertheless, it forecasts that the market will post a compound annual growth rate (CAGR) of 7.65% in local currency terms, rising - at consumer prices - from 4.12 billion ringgits ($1.22 billion) in 2008 to 5.96 billion ringgits ($1.96 billion) in 2013.

Generics also being pushed

Boosted by considerable encouragement from the government, the generic sector will gain in terms of volume, although generics will only gain a small percentage of the total market due to their competitive prices. Patent expirations will have a considerable impact on the performance of the generic sector in the coming years. In August 2009, India's Ranbaxy launched cardiovascular treatment Covance (losartan), which will be manufactured locally. Given the low cost of the product and the unmet medical need, the author expects prescribers' uptake of the drug to be rapid.

In addition to cannibalizing sales of the originator product - Merck & Co's Cozaar (losartan) - Covance will gain market share at the expense of Diovan (valsartan), Aprovel (irbesartan) and Micardis (telmisartan).

Although the operating environment for foreign companies remains challenging - with medical devices specialist B Braun Medical Industries mulling the relocation of its manufacturing facilities from Malaysia to Indonesia - clinical trials and biotechnology continue to be considered areas of growth. Indian Veeda Clinical Research recently created its South East Asia office in Malaysia, while also signing a collaborative agreement with the Malaysian Ministry of Health, with a view to opening an early clinical trials centre. Similarly, a subsidiary of US biotechnology firm Actis Biologics was in the process of securing funds for the creation of a biotechnology park (to be named Biocity) in Melaka, Malaysia.

In terms of recent epidemiological developments, the burden of digestive system disorders - including peptic ulcers, irritable bowel syndrome (IBS) and colon cancer - in the country is growing. In fact, in 2007, they were the seventh-most common causes of both morbidity and mortality, indicating a significant unmet medical need. Recently, the country has also been affected by the globally-spreading swine flu epidemic. By early August 2009, the human death toll rose to 44, with the Ministry of Health commencing a public education campaign on the spread of the A (H1N1) virus. The current stock of antivirals is expected to be supplemented by an additional 20 million ringgits worth of medicines, while all health care institutions have also been ordered to utilise rapid influenza screening tests.