Malaysia government's initiatives to strengthen the healthcare sector along with rising private spending power are likely to give an impetus to the biotechnology industry in Malaysia. The country's growing market for pharmaceuticals, favorable business climate, and cost-competitive location advantage are expected to attract multinationals.

Besides its economic development, Malaysia's improving regulatory environment will allow for higher public and private expenditure on pharmaceuticals. According to Espicom, there are around 250 Malaysian pharmaceutical manufacturers licensed by the drug control authority in Malaysia, although over two-thirds of these are traditional medicine manufacturers. Some of the major Malaysian biologics manufacturers include Bioven, CCM Duopharma, Inno Biologics and Ninebio.

According to Business Monitor International (BMI) projections, the pharmaceuticals expenditure in Malaysia is set to rise 2.1 percent to $1.64 billion in the quarter ending June 30, 2012 from $1.61 billion in 2011. Expenditure on healthcare and medical devices is set to rise by 2.3 percent and 1.1 percent, respectively. According to Frost and Sullivan, the pharmaceutical market in 2011 was $1.6 billion and is estimated to reach $2.3 billion by 2015, registering compound annual growth rate of 11 percent.

Malaysia's medical devices and supplies are mainly imported, especially the more technologically advanced items. A February 2012 report by Espicom estimates the current growth in the market to be a strong 9.1 percent per year, reaching $1.9 billion by 2016. Malaysia is expected to be the 11th largest population by 2016 in the Asia Pacific. This will ensure more space for the life sciences market to grow.

Policy changes

The National Biotechnology Policy has had a significant impact on the industry by providing a comprehensive plan with clear targets and measurements. By the year 2020, the government targets to achieve RM15 billion (approximately $4.7 billion) public and private sector investment in biotech, five percent contribution to GDP, 50 global biotech companies with revenue of RM170 billion (approximately $53.7 billion). In phase II of the National Biotechnology Policy, the targets are developing an expertise in drug discovery and development based on biodiversity and natural resources; new product development; promoting foreign direct investment; intensifying spin-off companies; strengthening local and global brands; and job creation.