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Focus Malaysia
7 days ago
- Business
- Focus Malaysia
Southeast Asia pharma market set to outgrow global average
SOUTHASIA Asia (SEA) presents a substantial future prospect for the pharmaceutical market. Its projected growth rate significantly outpaces the global average and other major established markets. As of calendar year 2024 (CY24), global total market size for pharmaceuticals is estimated at USD1.5 tri. In comparison, SEA's total market size is estimated at USD27 bil. The significant growth for SEA indicates that ASEAN is a prime growth engine for the global pharmaceutical industry. This makes it an attractive destination for investment and market expansion. The Philippines and Malaysia show steady growth in a biosimilar export potential, reaching USD 111 mil and USD 70 mil respectively by 2027. Malaysia's growth, though robust, is relatively smaller in absolute terms compared to Thailand, Vietnam, and Indonesia. However, companies like Duopharma and Pharmaniaga are actively developing Halal-certified biosimilars. Overall, biosimilars is an untapped potential due to increasing healthcare demands and cost pressure. 'We believe that investing in local manufacturing of biosimilars can open avenues for SEA countries to export,' said MBSB Research. Countries that prioritise and invest in local biosimilar production are likely to become stronger exporters in this field. This aligns with the broader trends of high pharmaceutical market growth in SEA driven by demographics, NCDs, and the increasing sophistication of healthcare systems, all of which necessitate tailored and creative market strategies. Malaysia's pharmaceutical sector boasts a strong and strategically recognized local manufacturing base that significantly contributes to medicine security, especially for generics and essential medicines. While Malaysia demonstrates capabilities in exporting to highly regulated markets like the USA, it remains heavily reliant on imports for patented drugs, biologics, vaccines, and key APIs. The main challenge for Malaysia lies in bridging this gap by further boosting local R&D, attracting more sophisticated manufacturing capabilities, and strengthening its position in the global pharmaceutical value chain beyond just generics. 79% of total volume of generic medicines and 47% of items listed in National Essential Medicines List (NEML) are locally produced. However, most drugs, notably patented medicaments, immunoglobulins, human vaccines and insulins, are still dependent on imports. Malaysia consistently shows widening trade deficit underscores Malaysia's high reliance on imported pharmaceuticals. While local production is strong in generics, the country still depends heavily on foreign sources for innovative, patented, and specialised medicines. This reinforces the government's strategic focus on local manufacturing and technology transfer to enhance medicine security and reduce import dependency in the long run. The overall trend in the regional and local pharmaceutical market suggests that both domestic and foreign investors will see growing opportunities in Malaysia. The 51% FDI / 49% DDI ratio suggests a healthy balance between local commitment, and global capital and expertise. FDI indicates that Malaysia is highly attractive to foreign pharmaceutical companies, bringing in capital, technology, and global best practices, while DDI signifies robust local entrepreneurship and investment from Malaysian companies, demonstrating confidence in the domestic market and capabilities. We opine that the untapped drug manufacturing ecosystem will continue to follow the megatrend of new innovative drugs – including biologics, biosimilars and cell & gene therapy drugs – and open more opportunities for Malaysia to be a major healthcare hub in the region. While direct pharmaceutical exports from Malaysia to the US might face immediate headwinds from tariffs, the broader impact on Malaysia's healthcare subsector could come from indirect effects on global pharmaceutical supply chains and procurement costs. This would affect the affordability and availability of medicines within Malaysia for all citizens and healthcare providers. The Malaysian government and industry players are already responding by prioritizing supply chain diversification and exploring domestic production enhancements to mitigate these risks. Meanwhile, we believe a multi-pronged approach involving government action, industry adaptation, and consumer awareness will be crucial. Overall, we maintain positive on the healthcare sector. The pharmaceutical market is fundamentally driven by robust demographic trends, which naturally increases the demand for healthcare services and medicines. —July 23, 2025 Main image: Daily Sabah
Business Recorder
12-05-2025
- Business
- Business Recorder
Price deregulation improves access to medicines, helps stabilise industry
KARACHI: The price deregulation of non-essential medicines in early 2024 has improved access to medicines and brought much-needed stability to the pharmaceutical sector, creating space for sustainable and long-term industry growth. The policy shift, aimed to create a market-driven approach while addressing longstanding challenges in the sector, provided flexibility to pharmaceutical firms, allowing them to adjust prices in line with market conditions. By aligning prices with inflation and currency fluctuations, companies have managed to stabilise production of medicines that were previously at risk of becoming unavailable due to pricing constraints, according to experts. Contrary to the skepticism surrounding price deregulation, the past year has proven it to be a correction rather than a market free-for-all. Essential medicines—listed under the National Essential Medicines List (NEML)—remain under strict government's price controls, ensuring continued affordability for vulnerable populations. However, by removing artificial price ceilings on non-essential medicines, the government restored confidence among manufacturers and revived production lines. 'This (deregulation) was not about letting prices run wild, but it was about saving healthcare industry on the verge of collapse and increasing access of patients to genuine medicines at market price,' said a former Pakistan Pharmaceutical Manufacturers' Association (PPMA) chairman. 'Deregulation has balanced sustainability with patient access.' With production becoming financially viable, many life-saving but previously discontinued drugs are now back on shelves. The volume of medicines sold rose by 3.79% year-over-year, according to IQVIA data dated February 2025, countering claims that higher prices have reduced access. Stable supply chains have also curtailed the rise of unregulated and counterfeit substitutes that had filled the void during previous shortages. Deregulation brings innovation, investment The economic impact of deregulation has been supportive. In the first quarter of FY25, the sector recorded a 5.6-fold increase in profitability, jumping to Rs5.6 billion from Rs1 billion in the same quarter of FY24, according to Topline Research. The growth was driven by improved margins, reduced financing costs, and greater production efficiency. The profitability has translated into increased investment. PPMA member companies are rapidly upgrading their manufacturing facilities to meet WHO PQ and PIC/S standards. The improvements can position Pakistan to significantly expand exports to regulated markets across Asia, the Middle East, and Africa. PPMA officials estimate that Pakistan's pharmaceutical exports significantly surged to $500 million in the first half of FY25, suggesting having potential to reach $1 billion in full-year FY25 and $5 billion in the next five years, provided deregulation and policy stability remain in place. 'Global buyers are now viewing Pakistan as a reliable, high-quality supplier,' a PPMA spokesperson said. 'This is a major shift from just two years ago.' According to industry sources, Pakistan and Afghanistan are to reach an understanding in the healthcare sector, enabling Islamabad tap around $500 million export potential in the neighbouring country. Stock performance soars Market sentiment has surged in response to these developments. The pharmaceutical sector's value climbed 194% year-to-date, far outpacing the KSE-100 Index (which rose 84%), it was learnt. For the first time in years, pharma stocks are among the top-performing equities at the Pakistan Stock Exchange (PSX). Haleon posted a staggering 436% gain year to date, Glaxo rose by 362%, Macter gained 315%, while AGP is expected to continued performing well this year; 2025. PPMA continues to advocate for a rule-based, transparent pricing mechanism for the sector, while ensuring that essential drugs remain affordable and accessible. The association is also calling for strengthened collaboration with the Drug Regulatory Authority of Pakistan (DRAP) and the Ministry of Health to prevent market abuse, reinforce public trust, and build a more innovation-driven ecosystem. 'This is not just a recovery story—it's a growth story,' said the former PPMA chairman. 'The reforms have given Pakistan's pharmaceutical industry a new identity: competitive, credible, and caring.' Copyright Business Recorder, 2025
