The Legal Framework of Pharmaceutical Companies In Malaysia.

Introduction

The pharmaceutical industry in Malaysia has seen significant growth in recent years, with both multinational and local companies operating in the market. These companies produce a variety of products, including branded and generic drugs, vaccines, and medical devices. The industry is supported by the Malaysian Government, which has adopted and implemented policies to encourage investment and research and development in the sector.

Having regulatory and business frameworks for the pharmaceutical industry is crucial for ensuring the safety and efficacy of drugs and medical devices manufactured, imported and sold in Malaysia. The frameworks set standards for the testing, approval, and monitoring of drugs and medical devices, assuring that they are safe for use by patients. They also make sure that companies operating in the industry comply with ethical and legal standards, such as those related to clinical trials and marketing practices.

Strong regulatory and business frameworks inspire confidence among healthcare providers and patients, encouraging the use of safe and effective medicines and devices. They also help to attract investment to the industry, as companies are more likely to invest in countries with clear and consistent regulatory and business standards.

The Regulatory Bodies

The main regulatory bodies responsible for the pharmaceutical industry in Malaysia are the Ministry of Health (MOH), the National Pharmaceutical Regulatory Agency (NPRA) and the Drug Control Authority (DCA).

In Malaysia, the MOH is the principal governmental authority responsible for protecting people’s health and well-being, as well as overseeing the whole healthcare system. The NPRA’s roles include implementing quality control of drugs and medical devices and ensuring compliance with regulatory requirements. [1]

It also collaborates with international regulatory bodies, such as the World Health Organization, to align its regulatory standards with global best practices.[2]

The DCA, on the other hand, is specifically responsible for the registration of pharmaceutical products. Its roles include evaluating the safety and efficacy of new drugs, and issuing licenses for the import, export, and manufacture of drugs.[3]

All institutions play critical roles in developing and enforcing these standards, ensuring that patients have access to safe and effective treatments. By working together, the three bodies can efficaciously regulate the pharmaceutical industry and maintain public trust in the healthcare system.

The Regulatory Framework

The regulatory framework for the pharmaceutical industry in Malaysia is governed by several laws and regulations, including the Control of Drugs and Cosmetics Regulations 1984, the Sale of Drugs Act 1952 (Act 368), and the Poisons Act 1952 (Act 366). These laws and regulations set out the standards for the manufacture, import, export, and distribution of drugs and medical devices in Malaysia.[4]

The regulations are enforced by the NPRA, which conducts inspections of manufacturing facilities, performs assessments of new drugs and medical devices, and monitors the safety of products on the market. The NPRA has the power to suspend or cancel licenses for non-compliance with regulatory standards.[5] Different types of licenses are required for different activities in the pharmaceutical industry in Malaysia, and these licenses are issued by the DCA.

The licenses comprise of, among others, Manufacturer’s license for manufacturers, Import License for importers, and Wholesale Dealer’s License for wholesalers and distributors that must be renewed periodically to ensure continued compliance with regulatory standards.[6] To apply for a license, the process usually involves submitting an application through the NPRA online portal. The DCA will assess the application which may include inspections of manufacturing facilities and testing of product samples to ensure that the applicant complies with regulatory requirements. The applied license will be issued once the application is approved.[7]

The compliance requirements for the pharmaceutical industry in Malaysia include Good Manufacturing Practice (GMP) and Good Distribution Practice (GDP) guidelines. These guidelines set out standards for the manufacturing, distributing and quality control of drugs and medical devices.[8] Failure to comply with these requirements can result in fines, license suspension, or even criminal prosecution.[9]

The industry is subject to strict regulatory oversight from the MOH, NPRA, and DCA with pharmaceutical companies required to comply with stringent requirements during the registration and manufacturing phases. This framework helps to ensure that pharmaceutical products in Malaysia meet high standards of safety and efficacy, providing consumers with peace of mind and supporting the growth of the industry.

The Business Framework

In addition to the regulatory framework, pharmaceutical companies operating in Malaysia must also navigate the country’s business framework, which includes company registration and licensing, manufacturing, intellectual property protection, and market access.

Company registration and incorporation in Malaysia is regulated by the Companies Commission of Malaysia (CCM). Companies must register with the CCM to operate legally in the country.[10] The registration process for pharmaceuticals in Malaysia requires submission of the necessary documents and fees, as well as compliance with regulations pertaining to company structure and governance as governed by guidelines and regulations set by the MOH, NPRA and DCA.[11] It is reported that as of December 2019, there were 263 licensed manufacturers among local and foreign companies, including Duopharma Berhad, Pharmaniaga Manufacturing Berhad, Hovid Berhad, Biocon Sdn. Bhd., and Sterling Drug (M) Sdn. Bhd., while Pfizer, Astra Zeneca, Novartis, and other major multinational companies (MNCs) primarily operate as licensed drug importers in Malaysia.[12]

Intellectual property protection is crucial for pharmaceutical companies, as it allows them to protect their innovations and maintain a competitive advantage. Malaysia has a robust intellectual property framework that includes patent, trademark, and copyright protection. The country is also a member of several international agreements related to intellectual property, such as the World Intellectual Property Organization (WIPO), Paris Convention for the Protection of Industrial Property 1883, and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).[13] Market access and the competitive environment in Malaysia can be challenging for pharmaceutical companies. The market is highly competitive, with both multinational and local players vying for a share of the market. With that being said, understanding the business framework is critical for pharmaceutical companies seeking to enter or expand their presence in the Malaysian market.

Recent Developments and Challenges

In recent years, the pharmaceutical industry in Malaysia faces several challenges, including the prevalence of counterfeit medicines, inadequate resources, and lack of transparency.

In 2021, counterfeit medicines worth almost RM2.2 million were seized by authorities in Malaysia, highlighting the significant problem of counterfeit and unregistered medications in the country. [14] Inadequate resources, such as a shortage of trained personnel and limited funding, can also pose challenges for regulatory bodies in enforcing regulatory standards. Lack of transparency in the regulatory process can also undermine public trust in the healthcare system.[15]

Efforts to address these challenges include improving the regulatory and business frameworks through improved collaboration and information sharing between regulatory bodies, increasing public awareness of the dangers of counterfeit drugs, and investing in training and resources for regulatory bodies.

The NPRA has also implemented a track and trace system to revamp the transparency of the supply chain and prevent the circulation of counterfeit drugs.[16] The Malaysian government has also been working to attract more foreign investment in the pharmaceutical industry and enhance access to funding and resources for local manufacturers. [17]

Although there are challenges confronting pharmaceutical companies in Malaysia, there are also considerable chances for advancement and progress. Companies that capable of navigating the regulatory environment and compete effectively in the market stand to benefit from the growing demand for healthcare services and the government’s commitment to developing the sector.

Conclusion

In conclusion, the frameworks of pharmaceutical companies in Malaysia are multifaceted, comprising both regulatory and business aspects. The regulatory framework is overseen by the MHO, NPRA and DCA, and includes processes for drugs registration and control. On the business side, pharmaceutical companies must navigate company registration and licensing, manufacturing, intellectual property protection, and market access. Looking to the future, the outlook for the pharmaceutical industry in Malaysia is positive, with continued growth expected in the coming years.

However, the industry is likely to face ongoing challenges related to regulatory compliance and market competition. Implications for the global pharmaceutical industry are also significant, as Malaysia continues to emerge as a key player in the Asia-Pacific region.

For further information, please contact:

Nur Insyirah Mohamad Noh, Azmi & Associates

insyirah@azmilaw.com

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1. Asrul A.S., et. all, ‘Health Technology Assessment and Its Use in Drug Policy in Malaysia’, Value in Health Regional Issue, (2019), 18, pg. 145-150.
2. PMO NPRA, ‘WHO Collaborating Centre for Regulatory Control of Pharmaceuticals’, Official Portal of NPRA, 5 December 2019.https://www.npra.gov.my/index.php/en/ about/recognition-international-membership/whocollaboratingcentre.html#:~:text=It%20is%20a%20regulatory%20agency,of%20pharmaceuticals%20marketed%20in%20Malaysia.
3. Lisa Assakina, ‘About the Drug Control Authority (DCA)’, Official Portal of NPRA, 2 March 2023. https://www.npra.gov.my/index.php/en/about/drug-control-authoritydca/about-the-dca.
4. Justin Dominic Wong Chi Wen and Jack Lee Yong Jie, ‘Product Registration for Pharmaceutical Industry & Cosmetic Products’, Azmilaw Newsletter. https://www.azmilaw.com/insights/product-registration-for-pharmaceutical-industry-cosmetic-products/.
5. Kobu, ‘Vision, Mission and Objective’, Official Portal of NPRA, 14 July 2022. https://npra.gov.my/index.php/en/about.html.
6. Jauze, ‘Licensing (Manufacturer, Importer and Wholesaler)’, Official Portal of NPRA, 24 February 2023. https://www.npra.gov.my/index.php/en/guidelinesfor-compliance-licensing/1608-licensing-manufacturer-importer-and-wholesaler.html.
7. ‘Registration for Pharmaceutical Products’, MIDA. https://mida.gov.my/wp-content/uploads/2020/07/Guideon-Pharmaceutical-Industry-In-Malaysia_17072020.pdf.
8. Kuek Pei Yee and Tan Shi Wen, ‘Regulatory, Pricing and Reimbursement: Malaysia’, Skrine, 6 January 2021. https://pharmaboardroom.com/legal-articles/regulatorypricing-and-reimbursement-malaysia/.
9. NPRA, ‘Frequently Asked Questions (FQAs) about GMP Inspection by NPRA’, Official Portal of NPRA, February 2020. https://www.npra.gov.my/easyarticles/images/users/1050/FAQs-APB-Inspection-Feb-2020.pdf.
10. MIDA, ‘Guide on Pharmaceutical Industry in Malaysia’, pg. 7, June 2020. https://mida.gov.my/wp-content/uploads/2020/07/Guide-on-Pharmaceutical-Industry-In-Malaysia_17072020.pdf.
11. MIDA, ‘Guide on Pharmaceutical Industry in Malaysia’, pg. 8, June 2020. https://mida.gov.my/wp-content/uploads/2020/07/Guide-on-Pharmaceutical-Industry-In-Malaysia_17072020.pdf.
12. MIDA, ‘Guide on Pharmaceutical Industry in Malaysia’, pg. 7, June 2020. https://mida.gov.my/wp-content/uploads/2020/07/Guide-on-Pharmaceutical-Industry-In-Malaysia_17072020.pdf.
13. MIDA, ‘Guide on Pharmaceutical Industry in Malaysia’, pg. 19, June 2020. https://mida.gov.my/wp-content/uploads/2020/07/Guide-on-Pharmaceutical-Industry-In-Malaysia_17072020.pdf.
14. Surin Murugiah, ‘Rise of digital drug dealers a global ticking time bomb’, The Edge Markets, 25 February 2022. https://www.theedgemarkets.com/article/risedigital-drug-dealers-global-ticking-time-bomb.
15. Abubaker A., et. all, ‘A Challenge Facing the Malaysian Pharmaceutical Sector: Quality and Affordability of the National Medications’, Research and Reviews: Journal of Pharmacy and Pharmaceutical Sciences, (2016), 5(3), pg. 71-77.
16. Nick Paul Taylor, ‘Asia-Pacific Roundup: Malaysia’s NPRA details pilot project for track and trace system’, RAPS, 26 July 2022. https://www.raps.org/news-andarticles/news-articles/2022/7/asia-pacific-roundupmalaysias-npra-details-pilot.
17. MIDA, ‘Guide on Pharmaceutical Industry in Malaysia’, pg. 20, June 2020. https://mida.gov.my/wp-content/uploads/2020/07/Guide-on-Pharmaceutical-Industry-In-Malaysia_17072020.pdf.