The Malaysian pharmaceutical industry has shown progressive growth over the years, particularly in the last decade. Recently, economic indications in the country have began to look positive, which should help sustain growth within the pharmaceutical sector.
The OTC Healthcare market in Malaysia increased at a compound growth rate of 8.3% per year between 2006 and 2012, accounting for 30% of the total market. The remaining 70% is comprised of Rx products.
Many local manufacturers have recently begun to develop and launch off-patent generic and herbal products; they are on the look-out for new and innovative products and licence agreements from countries outside Malaysia. Currently, the local industry meets approximately 30% of domestic demand, in addition to exporting to other Asia-Pacific countries, the Middle East, Africa, Latin America and Europe. But the rather large remaining 70% of domestic demand is accounted for by imported products, on which Malaysia is highly dependent.
Malaysia has less than 100-150 local pharmaceutical manufacturers. However, there are many OTC Cosmetic and Medical Device players. The majority of these manufacturers produce generic drugs, which have gained popularity in Malaysian hospitals and clinics, particularly since the financial crisis of 2008-2010, due to their affordable prices. Furthermore, there is an increasing demand for specialist treatment among middle- and upper-class Malaysians due to lifestyle-related diseases, such as heart complications and various forms of cancer.
Leading Malaysian companies are now also moving towards the production of biological drugs, oncology and high-value generic compounds, all in line with the growing demands of the region. Although the country has voiced objections to certain elements in the Transpacific Partnership Agreement, it is making progress in terms of trade relations—the government began negotiations over the creation of a European Free Trade Agreement in November of 2012, which will make gaining access to the promising Malaysian OTC and Pharma market less challenging.
The largest pharmacy chain in Malaysia is Guardian and Watsons, which transformed itself from a small independent retail store into a leading pharmaceutical distributor for almost 30 million people across the country. There are, however, also many privately owned single drugstores in Malaysia, which offer a solid assortment of OTC and Rx products, Cosmetics and so on.