Pharmaceutical Market Poised For Growth Following Malaysia-US Agreement
KUALA LUMPUR, Nov 3 (Bernama) -- The United States (US) pharmaceutical companies are likely to see increased sales in Malaysia following the signing of the Malaysia-US Agreement on Reciprocal Trade (ART).
In a statement today, BMI Country Risk & Industry Research (BMI), a unit of Fitch Solutions Group Ltd, said the trade agreement will streamline market access for US pharmaceuticals and medical devices in Malaysia by reducing regulatory barriers.
"While the new trade agreement could enhance the competitiveness of Malaysia’s pharmaceutical sector by improving access to high-quality medicines, it may also raise competitive pressures for local manufacturers.
"A key provision of the trade agreement allows Malaysia to accept US Food and Drug Administration (FDA) certificates and prior authorisations for medicines, streamlining regulatory pathways for US exporters.
“The US Food and Drug Administration (FDA)-approved US pharmaceutical products will be automatically recognised by Malaysia without additional authorisation requirements, unless serious safety or quality issues emerge. This will improve access to US-made medicines in Malaysia by simplifying regulatory approvals," it said.
BMI also noted that the combination of streamlined regulatory approvals and automatic FDA recognition will accelerate product launches and reduce market entry barriers, benefiting the overall pharmaceutical market in Malaysia.
"We forecast Malaysia's pharmaceutical market will grow from RM15.7 billion in 2025 to RM21.4 billion by 2029, reflecting a five-year compound annual growth rate (CAGR) of 6.4 per cent," it added.
Meanwhile, it said the medicine price regulation initiative announced by the Ministry of Health (MOH) in August last year will continue pressuring pharmaceutical margins through enhanced government procurement and pricing negotiations.
"The pharmaceutical sector has begun experiencing the effects of this two-phase reform, with implications continuing to unfold in 2025.
"The initiative was launched in response to instances where pharmaceutical manufacturers charged the government significantly higher prices than those offered in the private sector. Through price regulation, the MoH aims to ensure fair pricing, enhance accessibility and improve the overall pharmaceutical system," said BMI.
It noted that the pressure on pharmaceutical prices will continue to pose a substantial threat to the operations and profitability of pharmaceutical companies.
“Drugmakers may face challenges such as reduced profit margins, increased scrutiny and potential disruptions in their supply chains,” it said.
Looking ahead, the success of this initiative will depend on consistent enforcement and industry cooperation, it said.
While the framework is now in place, sustained monitoring and potential adjustments will be important to achieving the MOH’s goals of fair pricing and improved pharmaceutical accessibility, it added.
-- BERNAMA
