KUALA LUMPUR: Malaysia is heavily reliant on imported medicines, leaving its pharmaceutical supply chain vulnerable to disruptions, according to Pharmaniaga Bhd managing director Datuk Zulkifli Jafar.
He said the country’s pharmaceutical market remains structurally dependent on imports despite growing healthcare demand, exposing Malaysia to supply and demand shocks during crises.
“As a result, our supply chain is vulnerable and we are susceptible to various supply and on-demand shock,” Zulkifli said at Hong Leong Investment Bank (HLIB) and Bursa Malaysia co-hosted 21st Bursa Malaysia-HLIB Stratum Focus Series themed “Malaysia Healthcare Industry Moving Forward” today.
According to Pharmaniaga, Malaysia imports about 63% of its pharmaceutical products by market value, making it among the more import-dependent markets in the Asia-Pacific region.
Zulkifli said the challenge is structural, with local pharmaceutical manufacturers squeezed between multinational pharmaceutical companies that benefit from strong brand recognition and physician preference for originator medicines, and lower-cost imported generic medicines from China and India.
“As a result, only two Malaysian companies, Duopharma Biotech and Pharmaniaga, are among the country’s top 10 pharmaceutical companies by sales, while the remaining eight positions occupied by multinational drugmakers.”
Zulkifli said the Covid-19 pandemic, shortages of plasma-derived blood products and insulin supply disruptions in 2024 underscored the risks of relying heavily on overseas manufacturers for essential medicines.
He said vaccine allocation during the Covid-19 pandemic largely followed countries’ purchasing power rather than public health urgency as global demand outstripped supply, leaving Malaysia and many other developing nations waiting longer for access while wealthier countries secured doses earlier.
He added that shortages of plasma-derived blood products, including factor VIII, intravenous immunoglobulin (IVIG) and albumin, further exposed Malaysia’s dependence on a limited number of international suppliers, with manufacturers prioritising higher-paying markets when global supplies tightened.
The insulin supply disruption in 2024 similarly highlighted the country’s vulnerability after production issues at a key supplier affected supplies of recombinant human insulin, forcing the government to manage shortages while seeking alternative sources, he said.
At the same time, he said rising healthcare costs are reshaping the pharmaceutical industry. Malaysia’s medical inflation is forecast at 16% in 2026, while medical and health insurance claims increased 73% between 2021 and 2023 compared with a 21% increase in premiums collected over the same period, according to data cited by the company.
He said insurers and healthcare providers are encouraging greater use of lower-cost generic medicines to contain rising treatment costs.
“The math doesn’t work, something has to change. According to BNM, total MHIT growth 73%, between 2021 to 2023, while premium collected only 21%. So, it’s just not balanced,” Zulkifli said.
He added that the expected moderation in pharmaceutical market growth to around 8% annually through 2030 does not reflect weaker demand for medicines but rather a shift towards generic drugs, which are generally priced lower than originator products.
To improve supply resilience, Pharmaniaga is expanding the localisation of high-value biopharmaceutical products, including human insulin, insulin glargine, pneumococcal conjugate vaccine (PCV13) and hexavalent vaccines.
The company is targeting full in-house production of human insulin by 2027 after commencing trading activities in November 2024, while PCV13 is expected to become Malaysia’s first locally manufactured vaccine pending regulatory approval, he said.
Pharmaniaga is leveraging its four manufacturing plants, more than 70 in-house scientists and nationwide logistics network to strengthen domestic pharmaceutical production and reduce dependence on imported medicines.
“We want to make sure all the pharmaceutical product is affordable. Medicine is affordable to the country. And then it is validated. And we make sure there’s enough supply for the country,” Zulkifli said.
