Business

Wednesday July 25, 2012

Earning the trust of foreign and local medical institutions

By LIZ LEE
lizlee@thestar.com.my


TRUST is a big word in the medical devices industry it has the power to make or break a manufacturer's business anywhere.

A local manufacturer who wants to break into the international market will have standards to live up to in order to attract foreign buyers and there have been some local success stories.

“Different markets respond to different standards,” says Vigilenz Medical Devices Sdn Bhd managing director Shudipta Choudhury, quoting from experience.

“For medical devices, the standards that are most significant comes from the United States Pharmacopeia or the European Pharmacopeia,” he says.

Bigar says Pemandu has been working on incentivising the sector

“However, most advanced markets will have their own entry barriers through product registration requirements for sale in-country and through the regulatory bodies.”

The “barriers” that Choudhury refers to include the US Food and Drug Administration (FDA), the European Conformity (CE) marking, the Canadian Medical Devices Conformity Assessment System, the Pharmaceutical Affairs Law in Japan and the Therapeutic Goods Administration in Australia.

He told StarBiz that while there are country and agency peculiarities on the required in-country standards, there is a drive to harmonise the standards globally now so that the standards will largely be the same, with exception for some local requirements in some countries.

In Malaysia, the Medical Device Bureau under the Health Ministry is the body that regulates medical devices.

While companies are looking beyond their local shores, the irony is that Malaysian players are getting the sceptical squint from local buyers.

UWC Healthcare Sdn Bhd operating manager Jason Ng says there is a lack of sufficient medical device expertise in the Malaysian market, resulting in government hospitals preferring to buy overseas brands instead of local products.

“This happens even when the quality is the same and local products are cheaper,” he says. “Nowadays, a lot of China and India medical devices are offered at a better price but without guarantee on the quality. The brand or manufacturer could disappear when some serious issues happen,” he adds.

Acknowledging the effortsmade by the Economic Transformation Programme (ETP), Ng says that the relevant authorities still need to look into the matter seriously and review the tax structure to make local manufacturers competitive.

Ng says a number of factors need to be addressed to accelerate industry growth. One factor that affects the industry is the lack of medical devices innovation and support such as pro-local product procurement policies in both the public and private sectors.

One of the many medical devices manufactured in Malaysia

“There is also no sufficient incentives to attract and retain local players, as well as a lack of harmonisation internally and externally with other jurisdictions, and no clear national strategy for the sector,” he notes.

The ETP healthcare National Key Economic Area (NKEA) associate director Fabian Bigar reveals that the problem of getting local buyers is not new to the industry but he believes it is not insurmountable.

“We were told that the biggest problem is the preference for foreign branded products over locally-made quality products. I believe that over time this can be overcome, as long as local manufacturers can demonstrate that their products meet quality and safety standards and have access to the local markets.”

“It doesn't make sense when local products are exported to Europe with CE marking and registered with FDA, but cannot access local markets because users prefer foreign brands,” he says.

Bigar adds that Pemandu (the Performance Management and Delivery Unit under the Prime Minister's Department) has been working on incentivising the sector. It has organised an NKEA lab specifically for medical devices last year, bringing together industry players and government agencies.

He says one incentive for local players to go global is via an “off-take agreement policy”. “(That means) they can enter a procurement agreement with the Government for a specific period and this can be extended should the players are able to prove they can register the products abroad and export them,” he explains.

The Health Ministry has agreed to the proposal and is now drafting the mechanism for implementation.

Other than governmental initiatives, Choudhury says that the sector itself should also push matters. He notes that the Government has made efforts to develop this industry, and for him, the most significant has been the formation of the Medical Devices Authority (MDA).

“The task before the MDA is quite daunting, but I am sure it has very capable people manning the fort. The industry itself has largely been the preserve of the multinational companies having their production bases here.”

He adds that the only significant local medical devices players enjoying a global reputation are the rubber glove makers.

“Today they still are the most significant exporters of Malaysian medical products globally and this certainly was not achieved in two years. There is already a group of committed companies under the healthcare NKEA for medical devices charting a growth path from here to 2020.”

Choudhury hopes that the group will get the required support to succeed as the impact is expected to be very significant for the industry. Besides that, there are also many local institutions getting into research and development work in medical devices.

“Of course we need to do more. The Government can only do so much. We should see more big private sector initiatives, even some governtment-link companies should ramp up their involvement in this industry especially manufacturing initiatives.

“I wish also to see more local practitioners coming out as inventor of devices and then have local companies produce for global consumption. Let the cycle begin.”

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