Healthcare Resource Guide: Malaysia

 

Malaysia Statistics

Summary Market Entry
Current Market Trends

Main Competitors

Current Demand

Registration Process

Reimbursement
Barriers

Trade Events

FAQs

CS Contact

Best Prospects

Market Size

Capital: Kuala Lumpur

Population: 32.1 million

GDP: USD296.4 billion

Billion Currency: Ringgit Malaysia (MYR)

Language: Bahasa-Malay, English, Mandarin, Tamil

Summary

Malaysia provides universal healthcare access to its citizens. Malaysia’s national healthcare expenditure was around 4.6% of GDP in 2015. In 2017, the Ministry of Health allocation of the national budget was 9.4%. In 2018, the government set aside approximately US$6.75 billion, or 10.4% of the annual national budget, for public healthcare. Out of this allocation, about 7% is assigned for development purposes. However, with the recent change in government after the General Election, the new government is reviewing all on-going and future projects, and the budget allocated is subject to change.

According to the latest available data (2016), the number of hospital beds for both public and private healthcare sector combined is around 61,299, with public hospital beds accounting for 69% of total hospital beds. Total expenditure on health (public and private) was RM 49,193 billion/about USD $14 billion in 2014, and RM 52,609 billion/USD $14.6 billion in 2015. Private healthcare services in Malaysia are predominantly used by the upper-middle to affluent segment of the population. As per capita GDP rises, demand for private healthcare consumption is expected to increase in tandem.                                        

Market Entry

Most exporters find that using a local distributor or agent is the best first step for entering the Malaysian market. A local distributor is typically responsible for handling customs clearance, dealing with established wholesalers/retailers, marketing the product directly to major corporations or the government, and handling after-sales service. Exporters of services generally also benefit from using a local partner.

Sales to the Government of Malaysia, Government Linked Companies (GLC), or for procurement in certain priority sectors identified by the government require local agents and/or joint venture partners that are classified as a Bumiputra (Malay) company.

The Malaysian government and GLCs make use of offsets and other measures to encourage technology transfer, particularly for procurement in the priority sectors. The Government of Malaysia and GLCs also look favorably on U.S. companies that have a long-term presence in the local market. Therefore, for strategic or large-scale market entry, U.S. companies typically find they are treated more favorably when they are willing to establish a local office, hire

Malaysians, engage in training, undertake some amount of local assembly or production, or at least plan regular and frequent trips to maintain relationships and presence.

In sectors that are not government-dominated, companies, agents, or distributors should be selected based on competitive considerations (e.g. technical grounds or product knowledge). Since the Malaysian market is a relationship-oriented market, having a local presence or local agent can influence the final outcome.

Exporters of medical devices and pharmaceuticals need approval from the respective regulatory authorities prior to market entry. As of July 1, 2016, all medical devices imported into Malaysia would first need approval from the Malaysian Medical Device Authority (MDA). The National Pharmaceutical Regulatory Agency (NPRA) of Malaysia oversees the implementation of pharmaceuticals and nutritional supplements registration and cosmetics notification.

Current Market Trends

Consolidation is the key word for public healthcare resources and facilities. The government of Malaysia is implementing a hospital cluster concept. Hospitals within a similar geographic region will serve as one unit sharing assets, amenities and human resources. Additionally, existing healthcare facilities and assets will also be upgraded. Healthcare services to the rural and remote areas will be expanded via mobile healthcare teams and flying doctor services.

Implementation of the e-Health strategy will include incorporating existing ICT systems into one system-wide module. This will hopefully improve health data management, and support research and development and commercialization initiatives.

Pre-hospital care such as ambulance services, and accidents and emergencies (A&E) services will also be a key focus area. Ideally, collaboration between private sector and non-government organization ambulance service providers will improve response time and better resource utilization.

Public budget allocations for developmental projects:

  • USD$640 million for medical supplies, US$410 million for consumables and medical support items.
  • USD$359 million for healthcare facilities, medical equipment and ambulances upgrade including construction of Operation Theater (OT) in three districts’ hospitals, and upgrade of cardiology and cardiothoracic services in two states’ general hospitals.
  • USD$25 million for general hospitals and clinics upgrade and maintenance.
  • USD$12.8 million allocation for hemodialysis treatment subsidy and US$10.3 million medical aid for the underprivileged population.
  • USD$2.6 million rare diseases treatments allocation.
  • USD $7.7 million for non-communicable diseases (NCD) awareness programs.
  • USD $256 million allocation to build two hospital blocks for women and children wards (300 beds).
  • USD $128 million to build a cancer center (200 beds).
  • USD $128 million to build a specialist clinic/new ward (300 beds).
  • USD $97 million to construct an international forensic medical service center.

Demand for private healthcare has been increasing exponentially due to its speedy service delivery and high quality. In 2016, private hospital outpatient attendance was 6.3% of overall outpatient care provided in-country. However, private hospitals command 42% of total hospital admissions. For the same duration, approximately 27 % of the doctors, 36% of dentists, 38% of pharmacists, and 30% of nurses were in private practice.

Executive health screening service is increasingly popular as a preemptive approach, especially for the upper middle income and affluent population.

As for dental market trends, we are seeing subspecialties in orthodontics, implant and esthetic procedures increasingly being offered in private dental clinics. The United State is one of the leading suppliers of orthodontics products in Malaysia.

Medical aesthetics procedures are also gaining ground in Malaysia.

Main Competitors

In 2017, the total trade for Malaysia’s medical device industry was USD$2.04 billion and it imported USD$580 million worth of medical devices. U.S. products represented 21% of the import market and the U.S. was the top exporting country of medical devices to Malaysia in the same year. Singapore followed as the second largest exporter of medical devices with a market share of 17.9%. This was followed by Germany (12.5%), Japan (11.3%), China (7.1%), and South Korea (3.1%).

Overall, Malaysian imports of medical devices decreased 0.88% over 2017/2016. The type of medical devices Malaysia imports and exports differ significantly. Malaysia usually imports higher classifications/categories of medical devices not manufactured locally.

Exports to the world of medical instruments and devices from Malaysia increased 2.88% from 2016 to 2017 to US$1.46 billion. Top export destinations for Malaysian products are the United States (22.6%), Germany (20%), Belgium (15.5%), Japan (11.6%) and China (4.2%).

Malaysia is the world’s largest medical gloves producer. Major Malaysian export categories are: surgical and examination gloves, other medical instruments, apparatus and appliances like tongue depressors, catheters, syringes, needles and sutures, electromedical equipment, ophthalmic lenses including contact lenses, dental instruments and appliances, pacemakers, imaging systems/apparatus such as X-rays, and medical furniture. Malaysian companies primarily produce lower-end medical devices while some multinational companies manufacture higher-end medical appliances.

The previous government of Malaysia designated the Medical Device sector as one with high growth potential in the 11th Malaysian Plan. According to the Malaysian Ministry of International Trade and Industry (MITI), in 2016 total investments in the medical device and pharmaceutical sectors were valued at RM 2.87 billion (US$680 million). During 2010-2014, foreign medical device industry investments into Malaysia totaled RM 11 billion (US$2.9 billion), while domestic investments were RM 1.2 billion (US$316 million).

Current Demand

  • Wellness

Increasingly, more Malaysians are taking the approach of wellness and disease prevention. Consumer medical devices are used to self-monitor one’s health condition to maintain optimal health. Blood glucose and pressure monitors are gaining popularity. The United States is one of the largest suppliers of consumer health monitor devices to Malaysia. U.S. brands are both trusted and well received by Malaysian consumers.

  • Dental

Dental subspecialties in the area of orthodontics, implant and aesthetic procedures are increasingly being offered in private dental clinics. The United State is one of the leading suppliers of orthodontics products in Malaysia.

  • Private healthcare services

Private healthcare services in Malaysia are predominantly used by the upper-middle to affluent segment of the population. As per capita GDP rises, demand for private healthcare consumption is expected to increase in tandem. Health screening is increasingly popular. Medical aesthetics procedures are also gaining ground in Malaysia.

  • Other healthcare services

Similar to other increasingly affluent countries, non-communicable diseases (NCDs) such as diabetes, high-blood pressure, cardiovascular disease, oncology cases, and obesity are on the rise in Malaysia. Major vector-borne diseases that Malaysia is having a difficult time containing are primarily Dengue/Dengue haemorrhagic fever, and some Malaria.

As for vaccine-preventable diseases, Hepatitis B and Measles are high on the vaccines incidence occurring rate. This is despite the very high immunization rate of infants and children. In 2016, MMR immunization of children less than two years old in Malaysia was 94.4%; while Hepatitis B immunization coverage of infants (3rd dose) was about 98%. Apparently, there are an estimated half a million Malaysians that are infected with Hepatitis B and C. Many newborn babies have been given free Hepatitis B vaccines since 1989; nonetheless, the incidence rates of Hepatitis B increased from 2.13% in 2009 to 12.3% in 2016. Hepatitis C incidence rates increased from 3.71% in 2009 to 8.57% in 2016. Malaysia also saw a marked increase in the number of non-alcoholic fatty liver diseases.

Leptospirosis, HIV/AIDS, the Hand, Foot and Mouth Disease (FMD), and Tuberculosis (TB) are diseases that have high incidence rates, as well. Although Malaysia has been BCG-vaccinating its citizens from birth, along with booster vaccinations administered for school age children for many decades, we are seeing a resurgence in TB cases. Malaysian BCG immnunization coverage for infants was 98.3% in 2016. However, some parents are opting out of vaccinations due to religious beliefs and perceived health indications associated with vaccination. The other causative factor is an influx of unvaccinated migrant workers into the country. The high presence of unscreened illegal foreign migrants further complicates the situation.

Registration Process

The Malaysian Medical Device Act 2012 (Act 737) governs all medical devices imported into the country. This regulation specifies requirements and procedures to medical device registration, conformity assessment body (CAB) registration, establishment licensing, export permit and appeal.

All medical device manufacturers in Malaysia will need to register their medical devices with the Medical Device Authority (MDA). Importers and distributors will also need to obtain an establishment license to import and distribute medical devices locally in Malaysia.

Class A medical devices are subject to registration requirements by using Registration of Class A Medical Device Module. This can be done online at the Malaysian Medical Device Authority’s website: www.mdb.gov.my. A registration fee of RM100.00 applies. A registration certificate will be issued upon approval and it will be valid for five years, renewable thereafter.

There are steps to be taken prior to the establishment license application for all other Class B, C, and D medical devices. These steps can be determined by the following diagram*. If all requirements are fulfilled, then proceed with establishment license application. Complete guidance can be located on MDA’s website.

In certain instances, exemption from registration can be requested if the device is used for the demonstration, education, clinical research and performance evaluation purposes, are custom-made, or for special access medical device. Exemptions are subject to MDA approval issuance of a No Object Permit on importation and/or device market placement.

  • to be taken before making an application for an establishment license

Establishment license application requirements and process

Step

Preparation/criteria

  • Determine if your establishment handles medical device.

Must conform to “medical device” definition under Section 2 of Act 737.

  • Determine the type/ category of establishment.

As defined in “establishment” under Section 2 of Act 737.

  • Establish, maintain and implement quality management system (QMS).

As per Third Schedule of Medical Device Regulation 2012:

(a) A manufacturer will establish, maintain and implement QMS based on MS ISO/ ISO 13485 standard.

(b) An authorized representative, an importer and a distributor is to establish, maintain and implement appropriate QMS based on Good Distribution Practice for Medical Devices (GDPMD).

  • Appoint Conformity Assessment Body (CAB) to perform conformity assessment on QMS.

Establishment shall appoint pre-approved CAB registered under Section 10 of Act 737 to conduct conformity assessment according to Third Schedule of MDR 2012.

  • CAB issues report and certificate of conformity.

Upon completion of conformity assessment and satisfactory fulfilment of requirements, CAB is to issue a report and certificate of conformity according to the Third Schedule of MDR 2012.

  • Apply for establishment license via MeDC@St

(a) Application for establishment license can be made after criteria fulfillment. It must be supported with relevant information and documents.

(b) Applicant will create an account before making application via MeDC@St.

*Diagram and table courtesy of Malaysian Medical Device Authority.

Reimbursement

Malaysians have access to universal health coverage on the public healthcare front. The annual national budget determines the level of funding for public healthcare systems. Typical Malaysian public healthcare expenditure is around 4-5% of GDP.

Malaysian citizens and residents have access to subsidized healthcare services by the Ministry of Health, university hospitals, Ministry of Defense hospitals and various local health authorities. Malaysians pay a nominal fee for these public healthcare services. Senior citizens enjoy an additional 50% discount on these nominal fees. This includes primary, secondary and tertiary care, including hospitalization and surgery. In the case of implantable and artificial limbs etc., the general public would purchase these out of pocket. Federal public service personnel and pensioners and their immediate family members have access to reimbursement from the Public Services Department.

Private health insurance coverage and/or out of pocket are typical ways of paying for private healthcare services. Obtaining private health insurance coverage is entirely voluntary. Private sector employers generally have some form of health insurance coverage for their employees. Benefits and coverage are usually directly negotiated with managed care organizations. 

Barriers

Malaysia's ease of trading across borders remains highly ranked in international comparisons. However, it is not a totally free and open market. Malaysia’s import barriers are aimed at protecting the environment and strategic sectors, as well as maintaining cultural and religious norms.

Malaysia intends to build a global halal community and establish itself as a leading authority on halal certification, audit standards, and halal research and training. In 2006, it established the Halal Industry Development Corporation (HDC) to coordinate the overall development of halal products and services. The vision is for Malaysia to become the global halal hub and to create value for businesses participating in halal industries to grow the Malaysian economy. The HDC provides assistance to manufacturers, distributors, retailers, entrepreneurs, researchers and investors to penetrate the global halal market and JAKIM (the Department of Islamic Development Malaysia) is Malaysia’s halal certifying body. At the time of writing this, the new government is reviewing JAKIM.

Malaysian has developed a standard MS1500:2400 requirement for the production, preparation and handling of Halal food. It has since moved beyond halal standards for just food, and has developed 15 halal standards, which include a standard on pharmaceuticals and a draft standard for medical devices.

In 2012, Malaysia enacted MS2424: Halal Pharmaceuticals – General Guidelines. This voluntary standard provides general guidelines and serves as a basic requirement in the manufacturing and handling of halal pharmaceuticals. Products included in this standard are pharmaceutical products in finished dosage forms and includes both prescription and non-prescription medicinal products (examples include: biopharmaceuticals, traditional medicines and investigational medicinal products) for human use that are registered with the Drug Control Authority, Ministry of Health Malaysia.

In 2017, Malaysia introduced draft standards on halal medical devices. This draft standard has gone through two public comment periods and is currently undergoing review by the Standards Malaysia working group. This voluntary standard was developed to meet the challenges of the growing demand for halal products and services and to complement the halal ecosystem within Malaysia. However, industry is concerned that the draft standard is overly broad in scope. The standards include requirements for the management and control systems of all aspects of manufacturing and production, strategy and planning, raw material sourcing and delivery of the final product. The requirements include compliance to specific halal product safety, performance and hygienic aspects in manufacturing and handling of halal products. 

Procurement & Tenders

Malaysia is not party to the WTO Government Procurement Agreement, and as a result foreign companies do not have the same opportunity as some local companies to compete for contracts. In most cases, foreign companies are required to take on a local partner before their bids will be considered. In domestic tenders, preferences are provided to Bumiputra (Malay) suppliers over other domestic suppliers. Procurement often goes through middlemen rather than being conducted directly by the government. The procurement can also be negotiated rather than tendered. International tenders generally are invited only where domestic goods and services are not available.

Trade Events

Name of event: APHM International Healthcare Conference, July 31-Aug 2, 2018

Location: Kuala Lumpur Convention Center, Kuala Lumpur, Malaysia

English language website: http://aphmconferences.org/

Description: The Association of Private Hospitals of Malaysia (APHM) annual conference and exhibition is a key annual medical event.

Name of event: South East-Asian Healthcare and Pharma Show, April 9-11, 2019

Location: Kuala Lumpur City Center, Kuala Lumpur, Malaysia

English language website: http://www.abcex.com

Description: The South East Asian Healthcare and Pharma Show in Kuala Lumpur is one of the region’s more established trade shows covering the entire healthcare industry. Visitors come from Malaysia, Singapore, Indonesia, and other neighboring countries.

FAQs

Malaysian Medical Device Authority FAQ section:

U.S. Commercial Service Contact Information

Name: Tracy Yeoh      

Position: Commercial Specialists      

Email: tracy.yeoh@trade.gov

Phone: 60 3 2168 5089

Best Prospects

  • E-Healthcare products – ICT systems that focus on healthcare data management.
  • Clinical Diagnostics products and equipment – diagnostics growth due to increase clinical demand
  • Nutritional Supplements — For Wellness
  • Orthodontics — Implant and Esthetics procedures

Market Size

Healthcare spending (including investment)

4-5% of GDP

Hospitals, Procedures, Healthcare Professionals UN:

Number of hospitals

340

…Public

153

…Private

187

Number of hospital beds

Public and Private: 61,299 (2016)

... available beds per capita

19 (2016)

...of which in general hospitals

Public: 45,678; Private: 13,957 (2016)

...of which in specialized clinics and rehabilitation centers

Public: 4,702 (2016)

Number of surgical procedures

4,283 (2012)

...of which [top procedure]

Public: Pregnancy, childbirth and puerperium, 23.07% (2016)

Private: Diseases of the respiratory system, 15.93% (2016)

...of which [second highest procedure]

Public: diseases of the respiratory system, 12.80% (2016)

Private: certain infectious and parasitic diseases, 14.57% (2016)

Physicians

Total 50,087 (2016)

Profession:Population ratio 1:632 (2016)

Dentists

Total 7186 (2016)

Profession:Population ratio 1:4406 (2016)

Demographics

Population

32,049,700 (2017 estimate)

Life expectancy men/women

Men: 72.5 years; Women: 77.2 years (2016)

Infant mortality

12.5 deaths / 1000 live births (2017)

Percent of population older than 65

6.1% (male 927,100/ female 987,000) (2016)

Annual deaths

5.1 deaths/ 1000 population (2016)

...caused by Diseases of the circulatory system

22.62% (2016)

... caused by Diseases of the respiratory system

21.65% (2016)

Prevalence of Certain infectious and parasitic diseases (e.g. dengue, and Hand Foot Mouth diseases

13.30% (2016)


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