Legal & Regulatory > Malaysia > Regulatory, Pricing and Reimbursement: Malaysia

An intro to the legal situation for regulatory, pricing and reimbursement in Malaysia. Prepared in association with Skrine, a leading law firm in Malaysia, this is an extract from The Pharma Legal Handbook: Malaysia, available to purchase here for GDP 99.

1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?

The Ministry of Health (MOH) is the primary governmental body responsible for the health of the people and the overall healthcare system in Malaysia. Its key governmental agencies responsible for the administration of drugs and medical devices are as follows:

1. National Pharmaceutical Regulatory Agency (NPRA), formerly known as the National Pharmaceutical Control Bureau (NPCB), is tasked with implementing quality control on pharmaceutical products and meeting the requirements for testing and quality control activities. NPRA also implements and manages regulatory, licensing and product recall schemes as well as carries out research on methodology and training for pharmaceutical and professional officers.¹ 
2. Drug Control Authority (DCA) regulates combination products and is tasked with ensuring the safety, quality and efficacy of pharmaceuticals, health and personal care products marketed in Malaysia. The DCA oversees the registration of pharmaceutical products and cosmetics, licensing of premises (for importers, manufacturers and wholesalers) and monitoring the quality of registered products and Adverse Drug Reactions (ADR).²  
3. Malaysian Adverse Drug Reaction Advisory Committee (MADRAC) is established under DCA to carry out pharmacovigilance for registered drugs in Malaysia. All ADR reports received and assessed by MADRAC are forwarded to central World Health Organization (WHO) Global ICSR database. MADRAC works to promote ADR reporting in Malaysia and provide reliable information and advice to DCA, doctors, pharmacist and other healthcare professionals on drug safety.³
4. Medical Device Authority (MDA) controls and regulates medical devices in accordance with the Medical Device Act 2012 for registration of the medical devices, issuance of licences, training and awareness. The MDA also issues licences to establishments who import, export and place medical devices in the Malaysia market, surveillance and vigilance of medical devices and usage of medical device.⁴
5. Malaysian Pharmaceutical Services Programme (Pharmaceutical Divi-sion), is the enforcement agency of the MOH responsible for ensuring that safe, efficacious and quality pharmaceutical products are made available to the public, protecting their interest via enforcement of relevant legislations and ensuring rational use of medicines by both healthcare providers and patients.

2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?

DRUGS

Key Legislation

The key legislations for the drug industry in Malaysia are the Sale of Drugs Act 1952, Dangerous Drugs Act 1952, Poisons Act 1952, Medicines (Advertisement and Sale) Act 1956, and the Control of Drugs and Cosmetic Regulations 1984. Other guidelines and regulations issued by NPRA have also be implemented to provide guidance to the pharmaceutical industry.

Authorization

The drug formulary produced by the MOH contains a list of drugs that has been approved by the MOH hospitals and institutions. Prior authorization and approval by the Director-General of Health is required before the use of any non-formulary drugs. In order to obtain approval for a new drug, an application must be approved in accordance with the following steps: –

• Pre-submission of application: the category of product, method of evaluation and requirements for product registration must be determined;
• Submission of application: applicant must register and submit application via the online QUEST3 system;
• Screening of application: initial valuation carries out to ensure the required data/information of the submitted application are complete. This takes place before payment is made;
• Evaluation of application: Application with the submitted data is evaluated following different categories of products and/or level of claims. Applicant shall be informed via the system if any further supplementary data/information or documentation is deemed necessary by the Authority. Application is rejected if there is no response to the correspondence from NPRA within six (6) months from the first correspondence date. This takes place after payment is made;
• Regulatory outcome: a regulatory decision will be sent via email/official letter to the product registration holder. The Authority may, at any time reject, cancel or suspend the registration if there are deficiencies in safety, quality or efficacy of the product or failure to comply with conditions of registrations. A product registration number shall be assigned to the registered product.
• Post-registration process: registration status shall be valid for five (5) years or a period as specified in the Authority database. Upon approval, the application shall fulfil all commitments and conditions imposed during the approval process and shall be responsible for the maintenance of the product in terms of quality, safety and efficacy throughout the validity of the registration period.

BIOLOGICALS

The specific requirements for registration of biologicals are set out in the

Guideline on Registration of Biologics. This comes under Appendix 4 of the Drug Registration Guidance Document (DRDG)

The requirements for registration of biologics/ biopharmaceuticals shall be in accordance to the ASEAN Common Technical Dossier (ACTD) format and in adherence to the general regulatory requirement as described in sections of the main DRGD. 

It covers:

• Administrative information
• Product quality data
• Product safety data
• Clinical data, demonstrating clinical efficacy and capacity to meet therapeutic claims, through clinical studies
• Biologics include a wide range of products such as:

1. Vaccines;
2. Blood products;
3. Monoclonal antibodies (therapeutics);
4. Recombinant proteins:

• • Insulins
  • Hormones
  • Erythropoetins and other hematopoietic factors
  • Cytokines: interferons, interleukins, colony-stimulating factors, tumour necrosis factors

5. Cell and Gene Therapy Products (CGTPs)

There are specific requirements which exist for the registration of different types of biologics under the DRGD. These include specific requirements for the registration of Vaccines, Biotechnology Products, and Blood Products. 

Pricing

The MOH is the largest pharmaceutical spender and indirectly controls and reduces medicine price with bulk purchase. The three procurement methods are 1) Supply by Concession Company 2) National tender and 3) Local purchase. 

There are no price control methods in the private sector. Manufacturers, distributors and retailers may offer any prices in the free market without any pricing policy or regulation. However, under the Pharmaceutical Services Programme (PSP), MOH have published and updated a Consumer Price Guide (CPG) as a public reference to purchase medicines in the private sector. The PSP have conducted studies and produced reports with the aim of guiding medicine pricing policy and improving accessibility and affordability of medicine in Malaysia.

Nonetheless, based on publicly available information, the MOH has plans to implement price control measures. The MOH is targeting single-source innovative drugs sourced through public procurement in its first phase of price controls by using external reference pricing to benchmark drug prices in Malaysia against eight to 12 countries. The average three lowest reference prices will then be chosen to determine the maximum medicine prices allowed in Malaysia at the wholesale and retail levels (clinics, hospitals, pharmacies). However, as of June 2021, this has yet to be implemented and the countries that will be used as part of the references have yet to be decided.

Reimbursement

There is currently no national reimbursement scheme in Malaysia. However, the CPG published by the Pharmaceutical Services Programme is said to provide a comprehensive and reliable price data for consumers and for insurance reimbursement until a systematic nationwide procurement and reimbursement scheme can be implemented.

MEDICAL DEVICES

Key Regulations

The key legislation for the medical device industry in Malaysia is the Medical Device Act 2012. The First Edition of the Medical Device Guidance Document and Licensing for Establishment produced by the MDA also provides guidance on licensing requirement and establishments dealing with medical devices in Malaysia, to ensure compliance with the Medical Device Act and regulation.

The Medical Device (Advertising) Regulations 2019 and Medical Device (Duties and Obligations of Establishments) Regulations 2019, which were gazetted by the Malaysian Parliament under the Medical Device Act 2012, have officially come into effect as of 1 July 2020.

The Medical Device (Advertising) Regulations 2019 prescribes the matters relating to the contents of and conditions for advertising of medical devices. Meanwhile, the Medical Device (Duties and Obligations of Establishments) Regulations 2019 prescribes the manner, criteria, conditions and procedures of post-marketing activity of medical devices.

Authorization

Medical devices must be registered before they can be used and sold in Malaysia by licensed establishments. In Malaysia, medical devices are classified into 4 risk classes, namely Class A (Minimal), Class B (Low to Moderate), Class C (Moderate to High) and Class D (High). Manufacturers must ensure that their products conform to Essential Principles of Safety and Performance (EPSP) and Good Manufacturing Practices (GMP) standards and that a Conformity Assessment Body (CAB) certification is obtained in order to receive MDA approval for their product registration application. Moreover, a medical device cannot be imported, exported, or placed on the market unless it is registered. A single producer or authorised agent can only register one medical device. Multiple registrations of the same product are not permitted.

The general procedure to register a medical device is to group and classify it in one of the classes abovementioned, following which, a Common Submission Dossier Template (CSDT) must be prepared (including technical information i.e. design input/specification/verification/etc.). Then, a conformity assessment is conducted and assessed by CAB. The manufacturer can then apply to register the medical device and MDA will conduct an evaluation thereafter. If approval is granted, the medical device will be registered upon payment of a prescribed fee.

Notwithstanding the above, in 2016, a Medical Device (Exemption) Order was gazetted which provides an exemption for registration required under the Medical Devices Act 2012 for the following purposes: –

1. the purpose demonstrating the marketing;
2. the purpose of education;
3. the purpose of clinical research or performance evaluation of medical device;
4. a custom-made medical device; or
5. a special access medical device.

An importer or manufacturers of the above-mentioned medical devices are also exempted from obtaining the required establishment licence. However, prior to any importation of a device potentially eligible for exemption, a notification must be sent by the manufacturer or importer to MDA.

Pricing

There are currently no laws regulating market prices for medical devices.

Reimbursement

There is no national reimbursement scheme for medical devices in Malaysia.

COMBINATION PRODUCTS

Key Legislation

The same as that which regulates drugs and medical devices separately. Aside from legislation, reference can also be made to the Guideline for Registration of Drug-Medical Device and Medical Device-Drug Combination Products.

Authorization

There are different registration processes for combination products which are described as products comprising of two or more regulated components combined to produce a single entity i.e. drug/device, biological/device or drug/device/biological or two or more separate products packaged together in a single package or as a unit.

According to the 2020 Guideline For Registration Of Drug-Medical Device And Medical Device-Drug Combination Products: The registration process of Drug-Medical Device combination product hall undergo the following 2 stages:

1. Stage 2 – Obtaining Endorsement from MDA
2. Stage 3 – Application For Registration to NPRA

Note: All the stages shall be completed, with the exception of low risk medical devices which may proceed directly to Stage 2- Application for Registration to NPRA.

The registration process of Medical Device-Drug combination product shall undergo the following: –

1. Stage 2 – Obtaining Certification from CAB
2. Stage 3 – Obtaining Endorsement from MDA

3. What are the steps to obtaining authorization to develop, test, and market a product?

Refer to authorization in section 2 above.

4. What are the approximate fees for each authorization?

Certificate fees for any product where such certification is required by any country importing such a product

Charges for Product Classification

5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/registrations renewed?

Drugs

Marketing registration for drugs is valid for a period of (5) years or such period as specified in the registration certificate. Renewal of the product registration shall be done no later than 6 months prior to expiry of the product registration. The product information/amendments/variation can be updated through a proper application. Any changes affecting the quality, safety and efficacy of a registered product cannot be renewed – a new registration shall be required. This is however not applicable to non-medicated and contraceptive devices. 

Medical Devices

All establishments importing, exporting or placing on the market any registered medical devices must obtain an establishment licence. This licence is valid for three (3) years but may be renewed no later than one year before the expiry date by paying the prescribed fee and complying with any request for information, particulars or documents as may be required by the MDA. 

Additional Licences

In addition to the product registration and establishment licence, any person(s) or company that intends to manufacture, import or wholesale any registered product will have to obtain a Manufacturer’s Licence, Import Licence or Wholesale Licence respectively. Each licence is valid for a period of one (1) year and an application must be submitted together with the following documents: –

1. a copy of Company/ Business Registration Certificate 
2. a copy of Business License (Local Authority) for business premise or store (if any) 
3. a copy of Applicant’s/License Holder’s Identity Card
4. a copy of Annual Retention Certificate and/or Type A License (This document is necessary if products manufactured/ imported/ wholesale are Scheduled Poison A products or any other products that require a Pharmacist) 

Application for these licences must be made to the Drug Control Authority through the QUEST 3+ System. These licences are non-transferable. Compliance with Good Manufacturing Practice (GMP) and Good Distribution Practice (GDP) is required for the application of a manufacturing licence as well as product registration, whilst GDP compliance is required for the application of a wholesale or import licence.

For the renewal of any of these licences, a new application with the same supporting documents abovementioned must be submitted along with a copy of the previous licence.

6. How does the authorization process differ between brandname products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?

All medicines, either brand-name (“the innovators”) or generic medicines must undergo a scientific evaluation process to establish their quality, safety and efficacy. Generic medicines must have specifications similar to that of the innovators to ensure they are equally effective and interchangeable. Both brand-name and generic medicines’ facilities must comply with the same standards of Good Manufacturing Practices (GMP). The regulatory requirements in Malaysia are similar to that of other developed countries.

Malaysia is a member of the Pharmaceutical Inspection Cooperation Scheme (PIC/S). Therefore, the code and standards of GMP is the same as that used by PIC/S members such as Australia, Canada, Europe and the United States. Local manufacturers however are subject to licensing and periodic GMP audits. Foreign manufacturers of imported generic medicines are also subjected to GMP conformity assessment whereby the manufacturers are required to provide acceptable evidence that the premise conforms to current GMP requirements. Where the GMP evidence is not available or the documents are insufficient or unsatisfactory to demonstrate equivalence to GMP standards, the DCA may require an on-site audit of the foreign manufacturer. In order to ensure that generic medicines comply with strict registration requirements, all registered generic medicines are subjected to post-market surveillance, complaints and adverse drug reactions monitoring programme.

Local manufactures must ensure that the products meet essential principles of safety and performance (EPSP) and are manufactured in accordance with GMP. Both local and foreign manufacturers must apply for registration of their medical device products. The process of registration of medical devices for foreign manufacturers are as such: – 

1. A foreign manufacturer needs to appoint an Authorised Representative (AR) to register their devices;
2. The AR must prepare the registration application Common Submission Dossier Template (CSDT) based on the technical information from foreign manufacturer to be submitted to the MDA; 
3. An independent CAB (different from the one engaged by the foreign manufacturer in other countries) is to review the same registration application dossier and issue a CAB certificate to be submitted to the MDA; and
4. The MDA will then review and approve or reject the registration of the medical device under the registration name of the AR for the device to then be marketed in Malaysia.

7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated?

In Malaysia, the primary agency for registration of combination products is based on the primary mode of action/the principal mechanism of action by which the claimed effect or purpose of the product is achieved.⁵ In short, if the primary function of the combination product is as a drug, that would be its classification. Drug is based on pharmacological, immunological or metabolic action in/on the body.⁶ Combination products categorised as drug by the DCA is regulated in accordance with the CDCR 1984 and any other relevant documents published by NPRA.⁷

Medical devices do not achieve their primary mode of action in or on the human body by pharmacological, immunological or metabolic means, but that may be assisted in its intended function by such means.⁸ Combination products regulated as medical devices by the MDA is in accordance with the Medical Device Act 2012 and its subsidiary legislation, and any other relevant documents published by the MDA.

Additionally, any drug substances used as ancillary to medical device which is listed as a scheduled poison shall be regulated in accordance with the Poison Act 1952.⁹

8. How is compliance with regulations monitored and evaluated? Is the regulatory regime comparable with the U.S. Food and Drug Administration or the European Medicines Agency expectations and requirements?

Compliance with regulation is monitored by different agencies depending on the relevant products. Before any product is marketed and sold in Malaysia, it must be registered with the DCA even if it has received approvals from other regulatory bodies such as the US FDA.¹⁰ Furthermore, although the International Council for Harmonization (ICH) and European Medicine Agency (EMA) guidelines are generally acceptable in most ASEAN countries, there are additional regulatory requirements as well as enforcement and compliance procedures unique to Malaysia that must be further complied with for the dispensing and marketing of medicines.¹¹ These are set out in detail below.

The NPRA monitors compliance with regulations on drug related matters. Any pharmacy or individual carrying on the business of manufacturing, whole-selling and/or importing medicines in Malaysia must obtain the respective licences from the NPRA. Upon doing so, the NPRA will conduct various inspection on the premises of the business. In particular, a GMP inspection will be carried out for manufacturers and a GDP inspection for wholesalers and importers. This inspection may be carried out annually depending on the performance of the business. In undergoing the renewal process for each licence, all such manufacturers, wholesalers and importers must comply with the current regulations set out by the NPRA.¹² All validly licenced pharmacy or business will be listed on the NPRA website.

The Malaysian Pharmaceutical Division regulates any pharmacy dispensing or marketing medicines and products containing scheduled poisons, (chemicals listed in the First Schedule of the Poisons Act 1952) or non-scheduled poisons (chemicals not found in the First Schedule of the Poisons Act 1952). This body is tasked with enforcing compliance to existing legislation and ensuring that the link of supply and marketing, advertising of the products (including the medical services) and its usage are properly managed.¹³ In ensuring continued compliance with all the local legislative provisions, rules and guidelines, the Pharmaceutical Division would carry out its own annual inspection and audit for the renewal of any such licences granted.

9. What is the potential range of penalties for noncompliance?

Failure to submit necessary documentation and reports (i.e. BE studies) will result in a rejection of the application for registration of the product. Additionally, if the DCA finds unsafe or sub-standard medicines, they are authorised to remove such products from the market. According to the CDCR 1984 enforced pursuant to the Sale of Drugs Act 1952, as well as the Dangerous Drugs Regulations 1952, non-compliance by any persons (depending on the nature of the non-compliance) could lead to financial penalties, suspension of business activities, revocation of a product registration or establishment licence. Save in the more serious cases, violations of the legislation and regulations on drugs and medical devices may attract criminal liabilities, including imprisonment. 

10. Is there a national healthcare system? If so, how is it administered and funded?

Malaysia has a two-tiered healthcare service sector: a government-based and publicly funded sector and a private sector. The public healthcare services are tax-funded and administered by the Ministry of Health through its central, state and district offices. The policies and programmes are centrally formulated, funded and administered. There are also many active non-governmental organisations providing emergency ambulatory and relief services in Malaysia.

11. How does the government (or public) healthcare system function with private sector healthcare?

To a small extent the MOH also regulates the private sector, i.e. requiring health care professionals to register with statutory professional bodies. In addition, the MOH also regulates the pharmaceutical industry and food safety offering comprehensive services ranging from preventive and primary health care to tertiary hospital care. The private health sector provides health services, mainly in urban areas, through physician clinics and private hospitals with a focus on curative care. The government also works with private insurance companies to give low-income people with cheap healthcare protection and coverage. For example, via the “mySalam National Health Protection Scheme”.

12. Are prices of drugs and devices regulated and, if so, how?

See Question 2 above regarding the regulation of price of drugs and device products.

13. How are the drugs and devices used by patients paid for? What roles do public and private payers play?

Malaysia’s public health system is financed mainly through general revenue and taxation collected by the Federal government, while the private sector is funded through private health insurance and out-of-pocket payment from consumers.

Government taxes collected by the Treasury are allocated to the MOH under the framework of five-year plan and annual budgets. The MOH funds its public health care facilities through global budgets based on historical spending, while the private sector funders mainly seek fee-for-service to pay for their facilities and expenditure. 

14. Who dispenses drugs and devices to patients and how are those dispensers compensated?

Medicines are dispensed by registered medical practitioners, registered dentists and registered veterinarians. Medicines and devices are dispensed by hospitals and pharmacists. Public hospitals are government funded and are therefore compensated by taxpayers whereas pharmacists tend to be privately owned and therefore are paid out-of-pocket of consumers.

15. What are the professional and legal responsibilities of those who dispense drugs and devices? What role do they play in providing patient care, information, and safety?

Pharmacists are regulated by the Malaysian Pharmaceutical Society (MPS) and must adhere to a code of conduct therefore maintaining the highest professional standard in the discharge of their professional service to patients and clients, in their conduct and professional relations with members of the profession and other allied professions. Various extensive guidelines are available concerning good dispensing practices. These include the “Guidelines for Good Dispensing Practice” adopted by the Malaysian Medical Council on 19 July 2016 and the “Guide to Good Dispensing Practice” issued by the Pharmaceutical Services Division of the Ministry of Health Malaysia in 2016

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(1) NPRA, MOH website, 02.07.2015 https://www.npra.gov.my/index.php/en/about/addons-list-6/vision-mission-and-objective.html
(2) NPRA, MOH website, 03.07.2015 https://www.npra.gov.my/index.php/en/about/drug-control-authority-dca/about-the-dca
(3) NPRA, MOH website, 20.03.2019 https://www.npra.gov.my/index.php/en/about/malaysian-adverse-drug-reactions-advisory-committee-madrac/madrac-introduction
(4) MDA, MOH official portal, background pg. https://portal.mda.gov.my/introduction/background.html
(5) Ibid. pg. 10
(6) Ibid. pg. 10.
(7) Guideline for Registration of Drug-Medical Device and Medical Device-Drug Combination Products, MOH, 1st edn, 15th March 2017, https://www.npra.gov.my/images/Guidelines_Central/MDC/Garis_Panduan_13.3.17.pdf, at pg 2
(8) Ibid. pg. 10
(9) Ibid. pg. 2.
(10) NPRA, MOH, Frequently Asked Questions (FAQs) Veterinary Medicine, question 2), https://www.npra.gov.my/index.php/en/frequently-asked-questions-faqs-veterinary-medicine/general-regulatory.html
(11) Regulatory Affairs Professional Society, Regulatory Focus, News Article, The drug regulatory landscape in the ASEAN region, 2018 https://www.raps.org/news-and-articles/news-articles/2018/1/the-drug-regulatory-landscape-in-the-asean-region
(12) NPRA, MOH, Frequently Ask Question: Compliance and Licensing, question 1), 5) and 11), https://www.npra.gov.my/index.php/en/faqs-compliance-and-licencing/frequently-asked-questions-faqs-licensing.html?highlight=WyJmcmVxdWVudGx5Il0=
(13) Pharmacy Enforcement Division, Official Portal of Pharmaceutical Services Malaysia, MOH, 2018, https://www.pharmacy.gov.my/v2/en/content/pharmacy-enforcement-division.html