Fitch: Malaysian pharmaceutical market to see strong growth
PETALING JAYA: Malaysia’s pharmaceutical market is expected to see robust growth, thanks to the government’s concerted effort to improve the health and wellbeing of its population, said Fitch Solutions Macro Research.
“The healthcare scheme for B40 group (PeKa B40), implemented since April 2019, is one of the key initiatives that has become a game changer in the country,” it said in a note today.
The government has adopted a policy which prioritises the welfare of the Malaysian people, including raising healthcare expenditure and improving medical access.
Fitch noted that these themes will work to boost pharmaceutical demand, particularly when coupled with the country’s growing population and increasing disease burden.
“However, the government has acknowledged the rise of medicine prices impacting healthcare affordability and will seek to impose price control mechanisms in the near future.”
In the 2019 budget, the Health Ministry announced its plan to provide medicines as well as upgrade and improve the quality of health services at clinics and hospitals, including RM100 million for the National Health Protection Scheme with health screening pilot project for 800,000 people belonging to the B40 group, which refers to the bottom 40% of households with monthly income of RM3,900 and below.
Meanwhile, Fitch said high medicine prices remain a long-standing problem in Malaysia.
“Without price control in Malaysia, the medicine prices in Malaysia are high by international standards. As such, the Malaysian government will continue to intervene and establish pharmaceutical price controls to increase the population’s access to affordable medicines.”
Although initially hurting the profit margins of private sector players, it opined that the introduction of price control mechanisms will have positive implications on the country’s pharmaceutical market over the long term as retail prices will fall, enabling greater access to medicines.
“Retailers will be prevented from applying inflated margins on drug prices, resulting in greater affordability of medicines. The firms will potentially benefit from an increase in sales volume, offsetting some losses from declining prices. Growth should also be supported by an ageing and expanding population as consumers become increasingly aware of alternative products and government priorities remain favourable.”
Demographically, Malaysia is a progressively ageing society. By 2023, the proportion of the Malaysian pensionable population will reach 7.8%, up from 5.9% in 2018. This will increase the need for elderly care services and orthopaedic treatment/products. The disease burden and demographic profile provide strong opportunities for foreign pharmaceutical companies to treat Western lifestyle diseases, added Fitch.
Source: TheSunDaily