The Medical Device Market: Malaysia

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Medical Devices:

Espicom Business Intelligence
Management Report June 2007

Espicom’s in-depth medical device market reports are ideal for executives wanting to understand the key drivers in medical markets and have access to a wealth of statistical data. Each report opens with an outlook section that provides analysis of the market, 5-year market forecasts, national data projections, market outlook and key developments such as regulation, health facilities and government policy. The report also provides extensive background information, population trends, health status, health expenditure, organisation & administration, hospital services, medical personnel, healthcare development, market access information, trade data and essential industry contacts. Included with the report are 3 free quarterly updated outlook reports, enabling you to keep up to date with market developments for a year. Besides rubber based products, where Malaysia has a comparative advantage and is a world leader in surgical gloves and catheters, most supplies are imported. This is not expected to change too much in the medium term, despite the government encouraging the manufacture of more expensive and advanced equipment.

Progress has been slow in recent years, with shortages in the number of doctors and other medically trained personnel and a further decline in the number of facilities in rural areas. In 2002, in a ‘quick-fix’ solution, the cabinet approved the recruitment of 1,000 foreign doctors. However, due to poor performances ranging from poor skills, communication and discipline, 120 of these doctors have been fired since 2003. In July 2006, the Ministry of Health said the performances of a further 700 of these doctors are being monitored and more terminations can be expected.

Under the Ninth Malaysia plan (2006-2010), there has been an increased allocation towards healthcare. More than RM2.0 billion, or 20% of the overall budget, will be spent on developing rural health services, an increase of more than 150% in spending compared to the previous plan, which spanned from 2001-2005. Less allocation has been given towards building new hospitals, whereas critical areas such as R&D, that saw only RM28.9 million in the last five years, will now receive RM250.0 million. Allocation for training has tripled.

The government is keen to encourage investment from abroad, as both the economy and the medical device market appear to be steadily improving in terms of stability and potential. In order to boost the manufacturing sector, the government has offered incentives for companies to move away from more basic products such as rubber-based goods which dominate local production, to more expensive and advanced equipment. Being largely supplied by imported products, Malaysia remains a lucrative if slowly-growing and competitive market. Imports of medical goods have exhibited strong increases in recent years, surpassing pre-crisis levels.

Politically and economically Malaysia has performed well in recent years. Despite being one of the countries severely affected by the Asian economic crisis in 1997, Malaysia recovered by implementing strong and unconventional measures. Although criticised initially, Malaysia’s decision to peg its currency to the US dollar did help the country recover from the financial crisis. On 21st July 2005, Malaysia’s central bank announced it was lifting the peg with immediate effect, allowing the ringgit to operate in a managed float. The float has seen the value of the ringgit strengthen, albeit marginally, against the greenback.

Number of pages - 112

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