Malaysia’s intensified focus on medicine security is anticipated to bolster long-term growth prospects for the country’s pharmaceutical sector, amid an ageing population and increasing healthcare demands. A recent report by CGS International (CGSI) Research highlights that government initiatives aimed at enhancing domestic drug manufacturing and ensuring medicine supply stability could improve the operating environment for local pharmaceutical companies.
CGSI Research revised its outlook on the industry’s long-term potential following the Health Ministry’s PharmaView Expert Series 2026 held on October 13. The event gathered policymakers and industry stakeholders to address key issues including medicine security, healthcare affordability, and innovation in the sector.
Of particular note is the government’s push to expand domestic pharmaceutical production capacity, seen as promising for companies such as Duopharma Biotech Bhd. The firm is currently undertaking two major facility expansions expected to be operational by the financial years 2029 and 2030. These developments are anticipated to strengthen Malaysia’s pharmaceutical supply capabilities.
Despite these positive steps, CGSI Research pointed out that the Health Ministry has not yet moved towards localising the production of active pharmaceutical ingredients (APIs), which Malaysia primarily imports. The reliance on imported APIs, many of which are petroleum-derived, has become a concern amid ongoing geopolitical tensions in the Middle East that could disrupt supply chains.
The report noted that current policy efforts prioritize increasing domestic downstream manufacturing capacities—such as drug formulation and packaging—over upstream API production. This approach includes fostering collaboration among industry participants, healthcare professionals, and investors to attract investment and scale local production.
Additionally, the wider adoption of generic medicines and biosimilars was identified as essential for maintaining healthcare affordability in the face of growing treatment demand. The Health Ministry reportedly supports value-based procurement, risk-sharing arrangements, and alternative financing mechanisms to ensure patients’ access to medicines while managing resources prudently.
Reflecting these developments, CGSI Research affirmed its positive stance on the pharmaceutical industry, maintaining an “overweight” recommendation on the broader healthcare sector. The emphasis on medicine security, supply resilience, healthcare affordability, and generics adoption underscores the strategic importance of strengthening Malaysia’s domestic pharmaceutical manufacturing capabilities.