Executing National Plans and Global Commitments
The COVID-19 pandemic exposed critical gaps in our medical device production capabilities, underscoring the urgent need for self-sufficiency in high-end medical equipment. This urgent call to action reinforces the importance of our efforts to strengthen the local medical device industry.
As President of Persatuan Pengilang Peranti Perubatan Malaysia (PERANTIM), I saw firsthand how unprepared we were. When the pandemic hit, we realised just how much we relied on other countries for essential medical devices. Many of the critical medical supplies, including ventilators, had to be imported, leaving us in a position where we had to negotiate and compete with other nations to secure them. Recognising this risk, I wrote an article in The New Straits Times, urging Malaysia to start manufacturing its own critical medical devices. This led to stronger local production capabilities and policies supporting homegrown innovation. Today, two of the three crucial products we highlighted i.e., vaccines and ventilators, are now being produced in Malaysia. Yet, despite having the century-old Institute of Medical Research (IMR), we have never established local vaccine production until now. This underscores the importance of producing critical medical devices domestically.
Previously, we relied on imports from Western countries for high-end medical equipment, such as ventilators. While local production marks a significant step forward, cost remains a major challenge. Manufacturing ventilators for a population of 36 million may not be commercially viable without policy intervention. Right now, Malaysia is known for producing disposable medical products; however, we need strategic policies to expand into high-end medical device manufacturing. We are fortunate to have abundant natural resources such as high-quality rubber and plastic resins, which support disposable medical product manufacturing. However, strong government policies are essential for our industry’s growth. Let us take an example from Indonesia: when the President firmly announced the government’s move to prioritise local production, it immediately attracted major foreign investments to their shores. However, for Malaysia, with a smaller market size, producing everything domestically poses challenges and requires strategic solutions. Joint ventures with international companies are essential to gain expertise and scale production capacity.
At PERANTIM, we are collaborating with the Medical Device Authority (MDA), Malaysia’s regulatory body for medical devices, to form a joint venture with a Czech- Republic-based European Union (EU)-endorsed agency to provide Conformité Européenne (CE) certification locally. The MDA plays a crucial role in ensuring the safety and quality of medical devices in Malaysia, and this collaboration is a significant step towards streamlining certification for local manufacturers and substantially reducing the high certification cost This initiative also supports the growth of a local audit industry, encouraging more of our manufacturers to produce and export medical devices. In 2023, Malaysia’s medical device exports were valued at approximately USD 4.2 billion, with a growing demand for locally manufactured products (MIDA, 2023). Meanwhile, the global medical device market was estimated at USD 518.46 billion in 2023 and is projected to reach USD 886.80 billion by 2032 (Fortune Business Insights, 2023).
Despite this, we currently produce only 30 to 40 types of disposable medical devices out of approximately 30,000 used in hospitals, highlighting the vast opportunity for our local manufacturers to expand and compete internationally. Global Benchmarks and Standards While there are no direct apple-to-apple comparisons for the medical device industry, the Czech Republic serves as a relevant example for Malaysia. Despite its smaller population, it has successfully built export-oriented industries and is one of the largest manufacturers of medical beds and furniture, with companies like LINET, a global leader in hospital bed production, being among the top exporters in this sector. These large manufacturers play a crucial role in supporting the local smaller manufacturers, helping them grow and flourish. Something that is not yet fully developed in Malaysia.
It is crucial for established players, particularly those who have successfully entered international markets, to support local manufacturers that are just starting out. At the same time, encouraging new manufacturers is equally important, as producing a single product requires significant investment and space. Malaysia should focus on promoting new industries and fostering growth to bring more players into the market. Even traders could be encouraged to transition into manufacturers, strengthening the local industry and enhancing its competitiveness on a global scale. Collaboration between large and small manufacturers is essential for Malaysia’s medical device industry. Industry leaders with international market experience must help smaller businesses scale up, ensuring a more sustainable industry.
Given the high costs and space requirements of medical device production, strategic policies should be implemented to ease the transition from traders to manufacturers, further expanding the industry Malaysia holds a unique strength – the MS 2636 Halal Medical Device certification, the first of its kind in the world. However, this standard is not yet internationally recognised, limiting its impact. There is an opportunity to promote MS 2636, leveraging Malaysia’s leadership as ASEAN chairman and expanding beyond ASEAN, particularly in Organisation of Islamic Cooperation (OIC) countries. If successfully adopted, MS 2636 could position Malaysia as a global leader in halal medical devices, ultimately achieving recognition comparable to CE certification.
The significance of MS 2636 lies in its ability to cater to the growing demand for halal-certified medical devices, particularly in Muslim-majority countries. As halal compliance extends beyond food into pharmaceuticals, cosmetics and medical products, healthcare providers and consumers are increasingly seeking assurance that medical devices meet halal standards. This certification ensures that materials, manufacturing processes, and handling practices comply with Islamic principles, making Malaysia a pioneer in an emerging global market.
With rising healthcare awareness in OIC nations and beyond, MS 2636 provides a competitive advantage for Malaysian manufacturers. By gaining international recognition, Malaysia could open new markets, attract foreign investment, and strengthen its position as a trusted supplier of halal-certified medical technologies.
Strengthening the Local Content
International collaboration is essential for the local medical device producer to gain access to advanced technologies, expand market opportunities, and enhance industry standards, as relying solely on the local market is not viable. Technical expertise and global partnerships drive innovation and competitiveness. Industry players and students should actively participate in global expos like Medica (Germany) and Arab Health (Dubai) to explore new technologies and build partnerships. Therefore, collaboration with international players remains crucial, and we must encourage them to invest in Malaysia while ensuring technology transfer so the country can fully benefit.
At the same time, local industries must invest more in research and development (R&D) to drive innovation. A willingness to take risks and embrace failure is necessary for growth. Without continuous R&D, the industry risks stagnation. Encouraging local investment in innovation is key to ensuring a thriving and competitive medical device sector.
Additionally, higher learning institutions, particularly universities researching new products, must involve private or industry partners from the start. Often, products developed in academic settings may not be market-ready even if they demonstrate excellence at the industry level. For successful commercialisation, industry input is essential to ensure products align with market needs and international standards.
Long-Term National Security
The future of Malaysia’s medical device industry looks highly promising. With the global market projected to reach USD 1 trillion, Malaysia currently contributes only USD 11 billion per year, less than 1%. This presents a massive opportunity for growth, making the sector highly lucrative for new players. With the right strategic efforts and collaborations, Malaysia can expand its presence in the global medical device market.
Collaboration is key to strengthening Malaysia’s technological capacity. Agencies, industries and stakeholders must work together to address challenges from all angles. Free trade agreements enable European companies with CE certification to easily enter the Malaysian market, by registering with the MDA and starting sales within 14 days. However, for Malaysian manufacturers to enter the European market, obtaining CE certification is far more costly, ranging from USD 300,000 to 1 million per product, and can take one to two years. Addressing these disparities is crucial for Malaysia’s growth over the next five to ten years.
