The Malaysian pharmaceutical market is forecast to grow from $2.3 billion in 2015 to $3.6 billion by 2020, representing a compound annual growth rate (CAGR) of 9.5%, according to a new report by GlobalData.

Titled 'CountryFocus: Healthcare, Regulatory and Reimbursement Landscape – Malaysia', the report attributes the growth to medical tourism, absence of strict price regulation, increasing disease burden, and lack of dependence on imported products.

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The anticipated growth is also attributed partially to the rise in the incidence of non-communicable diseases caused by food and lifestyles changes and an aging population.

The Malaysian government has undertaken a number of initiatives, such as Entry Point Projects and National Key Economic Areas, which have aided in the growth of the market. As part of these initiatives, the government provides manufacturing facilities for production of generic drugs, while imposing barriers for the entry of imported generic drugs.

"The anticipated growth is also attributed partially to the rise in the incidence of non-communicable diseases caused by food and lifestyles changes and an aging population."

Leading domestic pharmaceutical companies in Malaysia, including Pharmaniaga Berhad, Chemical Company of Malaysia Berhad (CCM), Yung Shin Pharmaceutical, Hovid, and Kotra Pharma majorly focus on generic drugs, with very little focus on research and development (R&D). As a result, they are unable to establish themselves strongly within Malaysia or through exports, opines the report.

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The government’s initiatives are aimed at these issues and focus on improving development activities for the development of innovative, high-value products that are manufactured locally so as to qualify for government procurement.

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Malaysia is also gaining popularity as a medical tourism destination with 71 hospitals registered with the Malaysia Healthcare Travel Council.

The country attracted 850,000 medical tourists in 2015, 80% of which came from Thailand and Singapore.