Invigorated medical and wellness sector quickens nation's economic pulse
Discovery Reports - Malaysian Health Care
A clean bill of health that exceeded expectations marked the first year of Malaysia's economic transformation programme. Achieving 103 per cent of its targets in terms of key performance indicators, the health care industry emerged as a top revenue driver - a position the sector is determined to sustain up to 2020.
"In our first year of implementation, we embarked on the journey to unleash the tremendous economic potential of the Malaysian health care industry. We have concentrated our efforts as key enablers to the industry by removing roadblocks and putting in place industry-friendly policies," says Liow Tiong Lai, Malaysia's Minister of Health. "This year, we will continue our efforts to ensure the successful delivery and implementation of the health care NKEA."
The country's shifting demographics, growing affluence and changing lifestyles have played a role in the evolution of its health care ecosystem, which is largely divided into pharmaceuticals and biotechnology, medical technology and health services. All three subsectors performed strongly, going beyond last year's targeted gross national income (GNI) of HK$35.24 billion and 26,686 new jobs.
The key is close collaboration between the government and the increasingly empowered private health institutions. Such synergy is best illustrated by the various EPPs and BOs under the health care NKEA, all aimed at advancing initiatives for the optimum benefit of residents and international investors.
From exporting pharmaceutical products to promoting health care travel, these EPPs are forecast to generate 42.2 billion ringgit (HK$102.99 billion) in incremental GNI and 181,000 jobs by 2020.
"Malaysia's health care industry is open and ready for business," says Dr Chua Hong Teck, PEMANDU director for health care NKEA. "We pledge our commitment to provide the best service we can give to all stakeholders - including residents, foreign workers, tourists and global investors."
Clinical research through a supportive ecosystem
A vibrant and cutting-edge health care industry requires a supportive ecosystem to grow clinical research, which in turn further solidifies the sector's foundation. This is why the ministry of health launched an EPP that will pave the way for about 1,000 efficient and high-quality clinical trials by 2020.
A little more than a year since the target was set, 321 new and continuing clinical trials have already been achieved - much more than the expected 260 for the first year. These are driven by Clinical Research Malaysia (CRM), a specialised body established to leverage the ministry's extensive network of hospitals to develop Malaysia as a preferred destination for clinical contract research.
CRM sees growth in specific therapeutic areas such as oncology, cardiology, endocrinology and psychiatry as high-potential areas for regional collaboration. It looks forward to initially partnering with Southeast Asian countries and eventually opening connections further afield.
Drawn to Hong Kong due to its similarities in the development of health and hospital systems, CRM has made good contacts with the University of Hong Kong and will work to strengthen such ties.
It also plans to represent Malaysia in more relevant events such as the Partnerships in Clinical Trials Asia, which it attended in Shanghai last year.
"To become a centre of excellence, we would like to move towards a synergistic and symbiotic framework, as we encourage our hospitals to adopt the holy trinity of service, training and research," says Dr Teoh Siang Chin, who heads CRM.
"We see Malaysia complementing rather than competing, as our collective efforts will draw more trials to Southeast Asia, a region with more than 600 million people of diverse backgrounds."
Leveraging patent expiry with generic opportunities
Domestic pharmaceutical companies find their own nest egg in the upcoming patent expiry of the world's best-selling drugs worth more than HK$1.07 trillion in annual sales. With this foresight, the ministry of health is helping the private sector increase its involvement in the tremendous opportunity. The ministry also extends a helping hand to foreign pharmaceutical companies that are eyeing expansion by offering them incentives in exchange for setting up manufacturing facilities in Malaysia.
These attractions include the pharmaceutical off-take agreement, which allows the government to procure locally manufactured products from qualified manufacturers for a set period of time.
Among the first to take advantage of the opportunity is Indian pharmaceutical giant Biocon, which is known worldwide for its cost-effective health care solutions for chronic ailments such as diabetes, cancer and autoimmune diseases. The company has invested HK$1.24 billion in building its first factory outside India at Bio-XCell, a custom-built biotechnology park in Iskandar, Johor.
Health care travel destination
In an era where tourism goes beyond rest and recreation and more about health and wellness, Malaysia is positioning itself as the next top destination for health care travel.
Unlike the country's conventional tourism industry, which has been a top GNI earner for a long time, the Malaysian health care travel sector has grown mainly by word of mouth. And while its market remains small, the niche industry has been given its own spotlight as the ETP highlights it as a key EPP.
"Malaysia has very good health care services that we are now aggressively promoting to the global community," says Dr Mary Wong Lai Lin, CEO of the Malaysia Healthcare Travel Council (MHTC). "We have the most competitive prices and state-of-the-art equipment in the region."
The primary owner and driver of the health care travel EPP, MHTC facilitates public-private sector collaboration to formulate strategic plans for the development and promotion of health care travel services. It is the one-stop centre for all matters related to health care travel, co-ordinating promotional activities for Malaysian health care providers and related stakeholders.
MHTC has seen health care travellers increase by 47 per cent in the past year alone. Most medical tourists come from Indonesia, but the largest growth is coming from China, Bangladesh, Britain, India, Japan, the United States and Australia.
The council is set to bring together all of its stakeholders including medical insurance companies, retirement villages, airlines, hotels and travel agents in November at the 1st Malaysia International Healthcare Travel Expo. It will also open an MHTC office in Hong Kong next month, in response to its growing clientele in Greater China.
MHTC encourages investors from all over the world to come to Malaysia and become a part of the line's growth. "Anybody seeking to invest in business today should consider health care travel because we are looking at 35 to 40 per cent annual growth," Wong says.
Creating a Diagnostic Services Nexus
Another step towards putting Malaysia on the global health care map is the pursuit of international diagnostic outsourcing opportunities in telemedicine through the Diagnostic Services Nexus (DSN) EPP.
Led by General Electric (GE) Healthcare, DSN was rolled out last year in Kuala Lumpur Hospital and Selayang Hospital. The technology has since been rolled out to further help more public hospitals and private health care providers. After achieving its primary objective of improving radiology reporting services in the country, the EPP will pursue the ultimate goal of exporting teleradiology services to other countries.
"DSN is still in the early days, but it meets the country's immediate needs," says Stuart Dean, GE's CEO for Asean. "More importantly, it is improving Malaysians' access to high-quality health care."
ACRONYMS AT A GLANCE
ETP - Economic Transformation Programme
Launched in October 2010, the ETP lays out the framework for fulfilling Malaysia's vision of becoming a high-income nation with a per-capita income of at least US$15,000 by 2020.
NKEA - National Key Economic Area
These are 12 of Malaysia's strongest and most competitive sectors, ranging from oil, gas and energy to education and tourism. The NKEAs reinforce the private sector as Malaysia's new champions, in close partnership with the government.
EPP - Entry Point Project
The ETP outlines specific projects that are geared towards catalysing investment, and has identified about 131 EPPs and related BOs to kick-start growth.
BO - Business Opportunities
Alongside EPPs, BOs invigorate high-potential business areas under each NKEA. Together with EPPs, these are expected to fuel up to 1.7 trillion ringgit (HK$4.2 trillion) in gross national income and create more than 3.3 million jobs by 2020.
PEMANDU - Performance Management and Delivery Unit
An agency under the Prime Minister's department, PEMANDU oversees the implementation of the programme. It combines the best talent from both the civil service and private sector.