Malaysia - Country Commercial Guide
Healthcare

This is a best prospect industry sector for Malaysia. Includes a market overview and trade data.

Last published date: 2021-11-06

Overview

Malaysia is an upper-middle-income economy with the third highest purchasing power per capita in the 10-member ASEAN region. Malaysia’s healthcare expenditures are expected to double to $2.8 billion by 2028. The United States maintained its position as the top exporter in the cumulative category of medical and dental equipment, pharmaceuticals, and medical/surgical gloves to Malaysia for three consecutive years (2018-2020), with exports valued at $1.27 million in 2020. 

Despite the U.S. position as the leading supplier, Malaysian providers are most familiar with medical technologies from Europe, Germany, the United Kingdom, France, Australia, and Japan due to long-standing historical, education, and socio-economic connections. Increasingly, China and South Korea are gaining significant footholds in the market, with Singapore and Thailand as major ASEAN trading partners for Malaysia in this sector. The top ten major exporters to Malaysia in 2020 for the above-mentioned category are: the United States, China, Germany, Japan, Singapore, Taiwan, Hong Kong, Switzerland, the United Kingdom, and France. For 2020, the United States is the leading exporter of medical instruments and appliances including oscilloscope and spectrum analyzers, medical/surgical dental instruments and appliances, needles and catheters, electro-diagnostic apparatus, medicaments, prepared human blood and antisera, and bandages.

The MOH’s total budget for 2021 is $7.6 billion. Although there is an increase in the healthcare budget, the year-on-year percentage increase is only 4.3 percent, the lowest increase in three years. The 2021 budget shows wide-ranging cuts across almost all healthcare services including pharmacy and supplies. These budget cuts range between 10-78 percent across most of its care services. Psychiatric and mental health, respiratory and general medicine, anesthesia, and intensive care show cuts between 9-14 percent. Radiotherapy and oncology, cardiothoracic, pharmacy and nephrology show cuts between 58-78 percent. 

The GOM is committed to providing affordable and accessible vaccines when these become available.  Malaysia is participating in the COVID-19 Vaccine Global Access (COVAX) program. It expects the program to cost $7.14 million.  

Aside from the COVID-19 allocation, other programs receiving continued funding are the pneumococcal vaccination program for 500,000 children, with a budget of $21 million. Also, $1.4 million is set aside for the procurement of biologic medicine for various rheumatology illnesses such as Rheumatoid Arthritis. US$6 million is set aside for home-based peritoneal dialysis treatments to minimize hospital overcrowding.

New on the budget is the National Development Scheme with an allocation of $3.3 million. This scheme supports the domestic supply chain and increases the production of locally produced medical devices. Additionally, there are concessions of $3.3 million for medical laboratories and stores privatization. The Peka B40 project with $19 million is an initiative to sustain the healthcare needs of Non-Communicable Diseases (NCD) of the bottom 40 percent (B40) of households.  Also new in the budget is a special program allocation of $688 million for health facilities and medical supplies. The development segment of the budget are as follows:

  • $1.05 million for urban and rural healthcare services
  • $87 million for new hospitals
  • $24 million for the upgrade, modification, and repair of existing facilities
  • $15 million for ICT facilities
  • $17 million for Public Private Partnerships projects

Malaysia’s public-to-private healthcare consumption ratio is almost equally distributed. Health tourism remains a long-term focal sector for the private healthcare providers. Only private healthcare providers can cater to health tourists. Spending is shifting from public to the private sector. This shift is spurred by the development of mid-tier to high-end private hospitals and clinics to support both the domestic market as well as the medical tourists (in anticipation of the reopening of borders). Malaysia’s health tourism priority focal areas are in cardiology, oncology, fertility treatment, and hospital partnerships. Aesthetics medicine for both surgical and non-surgical procedures to alter the skin, face, and the body contour condition of a patient is gaining market interest and preference is on non-invasive/minimally invasive options. The Malaysian government is setting aside $8 million for the Malaysia Healthcare Travel Council to enhance the competitiveness of the local health tourism industry. The Malaysian Government will also extend income tax exemptions for the export of private healthcare services until the 2022 assessment year.

While the 2021 budget shows large cuts across all the healthcare specialties, there are opportunities for U.S. companies in the construction of new health facilities and the integration of IT in healthcare practices. Despite the budget cuts, managing NCDs is Malaysia’s main priority. Not only it is a necessity to maintain a healthier nation, but also to reduce the burden on the healthcare budget for a country that provides universal healthcare coverage.

Purchasing behavior differs between the public and private sector. Although price sensitivity is inherent in both sectors, public procurement tends to incentivize local Bumiputra companies and off-patent generic manufacturers. Sometimes this is done even at the expense of higher pricing and/or lower quality in tenders bids. Like many other countries worldwide, the Malaysian public healthcare system purchased many ventilators and patient monitoring systems and personal protective equipment. It also spurred public investment to improve Malaysia’s ICU and infectious disease capabilities. Concurrently, emergency preparedness and the treatment of non-communicable disease treatment spending continues. As a result of the pandemic, the public healthcare system realizes the importance and the need for telemedicine, a better patient monitoring and tracking system, and electronic medical records with a functional hospital information system.

As Malaysia’s COVID-19 infection rate soar to unprecedented highs, private healthcare is also now taking some of the burden of care for the more affluent self-pay/out of pocket patients as most insurers in Malaysia do not cover COVID-19 related tests and treatment. Equipment and consumables related to the treatment of this condition will be in demand. The private sector purchasing behavior is dependent on many factors. Market positioning of private hospitals plays a key role in many of the purchasing decision processes. Doctors’ familiarity with the equipment is another factor. This sometimes is due to doctors’ historical and/or direct linkage and familiarity with the equipment and systems from where the doctor was first trained. In addition to Malaysia, most Malaysian doctors have their basic medical degrees from the United Kingdom, Ireland, Australia, India, Egypt, and Indonesia. Hence, most general practitioners are more familiar with European and Australian equipment. A small percentage of Malaysian specialist doctors are trained in the United States. In most cases, high quality equipment, pricing, and after-sales service and continuing medical education and training provided by the distributors are key considerations for hospitals in their decision-making process. Malaysian hospitals note that European competitors have established strong sales and after-sales service channels in Malaysia and the region. These same hospitals, however, welcome the opportunity to engage with U.S. suppliers who are committed to increasing their presence and after-sales support in Malaysia.

As of December 2019 (latest available data), there are 135 public hospitals with 42,936 total official beds under the Ministry of Health (MOH), five military hospitals under the Ministry of Defense (MOD), and five university hospitals under the Ministry of Education  with a combined 4,052 beds. The number of beds is likely to have increased significantly due to COVID-19 as there is insufficient bed for affected patients.

In 2020, Malaysia’s imports of medical devices were $1.3 billion. U.S. products represented 17.6 percent of Malaysia’s import market and the United States was the top exporting country of medical devices to Malaysia. In addition to the United States, other top exporters of medical devices to Malaysia in descending order are China, Germany, Singapore  Japan, Taiwan, the United Kingdom, France, South Korea, and Thailand. In Malaysia, the type of medical devices imported and exported differ significantly while the import and export countries are mostly similar, except for additionally exporting to the Netherlands and Belgium. Malaysia usually imports higher classification/category of medical devices not manufactured locally.

Malaysia exported $5.19 billion (26 percent market share) to the United States in 2020. Top export destinations for Malaysian products are the United States, China, Singapore, Germany, Japan, the United Kingdom, the Netherlands, South Korea, Belgium. Malaysia is the world’s largest medical gloves producer. Major Malaysian export categories are surgical and examination gloves, other medical instruments, apparatus and appliances, catheters, syringes, needles and sutures, electromedical equipment, ophthalmic lenses including contact lenses, dental devices and appliances, medical and surgical X-ray apparatus, and medical furniture.

Medical and Dental Equipment, Pharmaceuticals, and Gloves. Note: This table does not include any values attributed to the trade of services.

$US millions

2018

2019

2020

CAGR

2018-2020 (percent)

Total Exports

10,128

11,076

11,797

7.93

Total Imports

7,022

7,315

7,161

0.98

Imports from the US

1,240

1,408

1,272

1.28

Malaysian Exports to the US

2,134

2,243

2,479

7.78

Exchange Rates

4.15

4.2

4.2

 

8. Source: Department of Statistics Malaysia/Global Trade Atlas

Leading Subsectors

Wellness: Increasingly, more Malaysians are taking the approach of wellness and disease prevention rather than treatment. Consumer medical devices are used to self-monitor one’s health condition to maintain optimal health. Oximeters, blood glucose and pressure monitors, and digital health wearables are gaining popularity.

Dental: Private dental clinics now increasingly offer subspecialties in orthodontics, implant, and aesthetic procedures.  However, imports of dental fittings and accessories, dental cement, fillings, and bone reconstruction cement declined for the past three years. Dentistry is seen as more of an elective procedure, and many are delaying treatment in the current health crisis. China, Germany, and Thailand are the top three exporters to Malaysia for this category in 2020.

Private Healthcare Services: Private healthcare services 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 and is usually the first line of service requested by medical tourists. Medical aesthetics procedures, especially the non-invasive treatments are gaining wider acceptance both by local consumers as well as medical tourists. Cardiology, oncology, fertility treatment, and specialist hospital partnerships are key opportunities for U.S. companies. Patients have put a lot of elective procedures on hold due to COVID-19. As the infection cases rise, providers manage treatment of affected patients. Additionally, select private healthcare providers are assisting in the national COVID-19 vaccination program.

Senior Assisted Living: Senior assisted living is another area that is gaining market interest. The senior care segment is not reimbursable under the current health insurance scheme in Malaysia and is an out-of-pocket expense. Despite this, due to the country’s development, demand is increasing for quality and affordable care. While there are many standalone private senior assisted living communities in Malaysia, with a small number publicly funded, by and large, the standard of care is not uniformly regulated and provided. The market trend now is to establish senior assisted living communities near the vicinity of a healthcare facility for ease of monitoring and care provision. These compounds are currently mostly available for the more affluent society. Many stakeholders in this market segment are seeking collaboration in affordable concepts. Any digital devices, solutions, or systems, such as digital monitoring systems for the senior care segment of the population, are welcomed.

eHealth: Consolidation is the keyword for public healthcare resources and facilities. The GOM is implementing a hospital cluster concept. Hospitals within a similar geographic region will serve as one unit sharing assets, amenities, and human resources. Additionally, the GOM plans to upgrade existing healthcare facilities and assets and expand healthcare services to the rural and remote areas 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 strategy will hopefully improve health data management and support research and development, and commercialization initiatives. The MOH recognizes that a fully functional Electronic Medical Records’ (EMR) system can increase the efficiency in managing information of patients. At the same time, it will reduce storage space in keeping physical medical records. The main challenges are due to the fast-changing technology and obstacles in securing sufficient funding. The MOH is committed to EMR usage expansion in all government health facilities nationwide.

The MOH approved an allocation for a pilot project to expand the EMR, which involves nine district hospitals in various states. This project is now known as EMR national implementation project phase one. The proposal to implement the first phase involves all government health facilities in the state of Negri Sembilan, comprising seven hospitals, 44 government clinics, and 12 dental clinics. The EMR system in each facility will be integrated with the Health Information Exchange (MyHix). The MyHix platform hopes to share a patient’s information in a safe, secure, and easy manner. As of July 30, 2020, 10 hospitals and one government clinic are integrated into the MyHix platform. The outcome of the pilot project and funding model will determine the nationwide EMR deployment.

Resources

  • Malaysian Organization of Pharmaceutical Industries
  • Malaysian Medical Association
  • National Pharmaceutical Regulatory Agency