The Pharmacy Channel Emerges in Malaysias Evolving Pharma Climate

By navin swaroop, senior consultant, ApAc & Anand srinivasan, engagement manager, ApAc

Its been more than four years since the Malaysian government launched its Health Promotion Board (HPB), an organization commissioned, among other things, to promote a healthy lifestyle among Malaysias 29 million people and to help stem the onset of such conditions as diabetes, cardiovascular disease, infectious diseases, and cancer.
A national cancer strategy has been implemented, thanks to the HPB. Health checks for hypertension, high cholesterol, diabetes, and obesity are now ongoing in government clinics. Pharmacists are being prepared to play a more significant role in improving the health of the Malaysian people. All of this is being played out against the backdrop of a public health system and pharmaceutical market that continues to demonstrate strong fundamentalsfast-growing disposable income levels, for example, as well as a pharma market still in a growth cyclein the ASEAN region. Throughout Malaysia, progress continues to be made on the upgrade and construction of some 500 new health clinics and community clinics, several new hospitals, and approximately 100 additional mobile clinics. Medical tourism, for its part, continues to benefit from tax incentives, a respected national accreditation scheme desired to ensure quality standards, and a recent stipulation in Singapore that allows citizens to use their Medicare contribution in Malaysia. Private insurance, bolstered by favorable new tax measures, is on the rise. Original brands, especially in such therapeutic markets as psycholeptics, antineoplastics, anti-asthma, and cholesterol-lowering agents, dominate the Malaysian
* MAT refers to Moving Annual Total.

pharmaceutical market in which nine of the top ten manufacturers are multinational companies. There are, of course, challenges. The government has been forced to respond to increasing budgetary pressures, for example, by proposing a new national health insurance scheme that will certainly encourage greater adoption of generics, while private insurers, for their part, are on parallel cost containment paths. With formal price control mechanisms now being proposed for the Malaysian National Medicines policy and blockbuster patents expiring, the Malaysian pharmaceutical market is set to grow at 6% between 2010 and 2014not the elevated pattern of a few years ago, but a signifier, nonetheless, of continuing stability. Optimizing resOurces For many reasons, then, Malaysia is a market in which both local and multinational organizations are steadily exploiting a range of new resource optimization optionsmoving toward nuanced initiatives designed to exploit emerging opportunities in both the ethical (branded/generics) market and the OTC/consumer medicines space, to optimize headquarters and field activities, and to realign sales forces and channel resource allocation in general so as to increase productivity.

Much interest currently revolves around the Malaysian pharmacy sector (~300 Million USD in value), which, by the MAT/Q3 2010* with a 2007-2010 CAGR of 12.25%, was outperforming both the government and general practitioner sectors with a 10.60% and 6.43% CAGR respectively, according to the IMS Plus Database MAT/Q3 2010. Importantly, original branded drug sales through retail pharmacies represented more than 15% of the total pharmaceutical market in Malaysia in 2009, contributing to over half the total market growth in the 2008-2009 timeframe. While the economic downturn may have partially contributed to the faster growth in the pharmacy channel, there have in addition been other sustainable fundamental shifts as well increasing number of retail outlets (currently ~3000 in Malaysia), larger number of available trained pharmacists and a more educated patient that is comfortable by-passing GPs to directly visit their neighborhood pharmacist for a variety of ailments. An increase in the number of trained pharmacists accounts, in part, for this development. But so do efforts now being made to end a long tradition of general practitioners dispensing medicines from their own offices. Pilot initiatives in Kuala Lumpur, Penang, and

Johor are testing those waters. Messages are being sent to patients. Greater scrutiny is being paid to the physicians who have sought to benefit financially from overprescribing as well as to patients, who, by virtue of moving from doctor to doctor, are confusing their own treatment plans and getting prescribed more medications than they should. One Ministry of Health official put it this way: When you go to this clinic, the doctors will prescribe you something. You go to another clinic, youll probably get the same thing [...] they put you on overlapping prescriptions. We realize that, but until we get a system that can detect the moment you log in as a patient [you wont know] that the patient has been supplied this. That is an issue we are trying to address.

succeeding in the new erA No matter what the timeframe ultimately is, Malaysia is clearly entering a new eraone in which overprescribing will diminish as individual hospitals closely scrutinize prescribing levels and in which increasing attention will be paid to the pharmacists employed by the countrys burgeoning network of retail and independent pharmacies.

freedom when it came to brands. Patients have trusted physicians to make the right choice, and, because co-payments are either inapplicable or negligible, have willingly accepted brand drug prices. Multinational companies that have relied on the sale of original products through physician offices must now reassess their Malaysia strategy and forge new paths in the pharmacy channel. They must recognize, at the outset, the importance of building meaningful relationships with the right pharmacists.

tOtAL sALes (cOnsuLtAnt usd) (miLLiOns)

One obvious outcome of this shifting environment is the pressure that has been placed on branded original products, which doctors tend to prescribe with greater regularity than do the pharmacy outlets. Private sector Turning challenges into opportunidoctors have not, heretofore, been ties is vital into todays pharmaceutical bound to a set class of drugs; they have market place and that is where the prescribed what their patients could value of IMS Health lies - proven cliafford. Public sector physicians, mean- ent success not text book theory. while, have worked with an expansive It will, of course, take yearsand the formulary of both original and ge- IMS Health-driven re-focusing of sales implementation of a national health neric products; in 2009, the Ministry teams, identification of product opporinsurance scheme that can offset the of Health formulary contained 1,432 tunities, competitive positioning oploss of general practitioner income drugs, many of them innovator prod- tions and potential commercialization before a complete separation of dis- ucts, along with pricing information. strategies all have proven successful. pensing channels can be achieved. While the public hospital formularPhysicians are strongly opposed to ies apply some restrictions in terms of And with IMS Health as a partner, any legislation that would limit their first-line use/specialist-only prescrib- monitoring the market and reporting dispensing activities. The Malaysian ing of expensive drug classes, doctors back on the results has been simply Pharmaceutical Society, for its part, is in the public sector have maintained part of the benefit. arguing for separation, suggesting that a reasonable degree of prescribing it is time that community pharmacists be given more responsibility for prescription monitoring, patient educaphArmAcY chAnneL hAs OutpAced Other chAnneLs since 2007 tion, and medicines management. Fisales contribution by sectors in malaysia nally, the draft master action plan for 1400 cAgr 09-10 the National Medicines Policy has 1200 proposed a 2011 timeline for such a separation, except in those geographies 18% 279 1000 where it is simply not yet feasible. 227 236 The potential impact of such legislation would, of course, be considerable. Suddenly there would be, in Malaysia, a new generation of stakeholders operating under different principles than existing normsstakeholders invested with the power to switch prescriptions based on anticipated pharmacy profit margins.
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2011 ims heALth incOrpOrAted Or its AffiLiAtes. ALL rights reserVed. ApAc regiOnAL Office 10 hOe chiAng rOAd #23-01/02 KeppeL tOwers singApOre 089315 teL: 65-6227 3006 emAiL: infO.sg@sg.imsheALth.cOm