Harmonisation of Asia's Medical Device Industry
Medical Devices Today
The economic boom has boosted per capita income across the region and with it, the growing middle class now demands more and better quality medical devices. In 2012, the total value of the ASEAN medical device market was more than US $4 billion and the value is expected to increase to US $8 billion by 2017.
Strong demand for Asian medical devices has delivered sales growth of 44.1% compared to North/South America (31%) and Europe/Middle East/Africa (35.1%) . Despite global economic uncertainty, medical device companies are more optimistic about 2013 than they were about 2012, with the expected growth opportunities driven by ageing populations and growing middle classes in emerging markets, including Brazil, India and China. Strong sales among Asia Pacific companies comes as no surprise, given the region’s rising middle class and government investments in healthcare, especially in China.
In term of regulation, medical device regulations are the key challenge faced by device manufacturers in the Asian region, followed by new product development and price pressure. Mid-sized and large companies struggle with regulatory issues more than smaller companies. This may be due to the fact that larger companies are more likely to sell in markets with less transparent regulatory systems. Unlike the mature markets of the EU and Japan, ASEAN’s market for medical devices is significantly under-penetrated. Thus, foreign medical device companies will take advantage of opportunities to navigate the ASEAN regulatory environment, which is fraught with variations of standards for product registration, distribution and post-market surveillance, or do not exist at all in some countries, e.g. Cambodia, Laos and Brunei; even as ASEAN moves towards the ASEAN Economic Community (AEC) in 2015, which places healthcare as a high priority sector for integration across the region.
Harmonisation of the sector and the efficiency of its regulations are needed for a successful integration effort. The ASEAN Consultative Committee on Standards and Quality (ACCSQ) set up the Medical Device Product Working Group (MDPWG) in 2004, with the aim of mapping a harmonised set of standards for medical device registration and post-market surveillance throughout the ASEAN region.
The MDPWG released a draft of the ASEAN Medical Device Directive (AMDD) in 2012, with implementation expected by December 2014. The AMDD sets out basic requirements for a harmonised classification system, medical device safety and performance, conformity assessments and a Common Submission Dossier Template (CSDT). ASEAN countries are required to implement standardised medical device classification criteria and device placement systems as well as establishing post-marketing surveillance alert systems.
The Malaysian Medical Device Industry
Companies engaging in the production of medical gloves and various disposable medical products dominate Malaysia’s medical device industry. Malaysia continues to be the world’s leading producer and exporter of medical gloves and catheters, meeting 80% of the world’s demand for catheters and 60% for rubber gloves. The medical device industry is highly reliant on imports. About 95% of imports are for local consumption, especially high-end technology products. In 2011, imports reached approximately US $939 million (around RM 3 billion), growth of 15.5% compared to 2010, even though the compounded annual growth rate (CAGR) from 2007 to 2011 was expected to reach 13.2%. Medical device exports reached RM 11.7 billion in 2011, with an annual growth rate of 15.4% from 2007 to 2011. In 2012, exports were valued at RM 12.9 billion  and the market is expected to continue growing in 2013.
The Malaysian medical device industry is made up of nearly 200 medical device manufacturers, ranging from small to medium-sized enterprises and some major foreign multinational corporations (MNCs), which are involved in high value products such as orthopaedic products, dialysers, surgical instruments, medical electrodes, catheters, diagnostic radiographic equipment, safety intravenous cannulae and sutures, as well as ophthalmic lenses. The majority of local manufacturers are, however, involved in the production of surgical and examination gloves, with a gradual shift towards the manufacture of non-rubber based higher value medical devices made from plastics, silicone and metal alloys. Established supporting industries range from sterilisation services, sterile medical packaging, precision engineering and tool and die making to contract moulding and assembly. Machinery fabrication also has a strong presence in Malaysia.
The medical devices sector has been identified by the Malaysian government as one of the priority sectors for promotion and further development, given the growing demand for medical products. This is also in line with the Healthcare National Key Economic Area (NKEA) which aims to develop the medical technology sub-sector such as medical devices, diagnostic equipment and healthcare information technology.
What’s New in Malaysian Medical Device Regulation?
The medical devices regulatory system is important to ensure compliance of Malaysia’s medical devices to international standards of safety, quality and effectiveness in several areas; pre-market control of medical devices, provision of adequate information for the public and public health professionals to make informed choices, tighten a lack of control on the use of certain medical devices and set up a post-market reporting system to identify and monitor medical devices with problems already on the market. Besides, Malaysia will gain competitive advantage in the global marketplace by facilitating local manufacturers to market their products globally, as well as to establish a favourable growth environment in this industry.
Malaysia’s medical devices regulatory framework is based on the global harmonisation trend as promoted by the Global Harmonisation Task Force (GHTF), Asian Harmonisation Working Party (AHWP) and Medical Device Product Working Group (MDPWG) of the ASEAN Consultative Committee for Standards and Quality (ACCSQ) and supported by the World Health Organisation (WHO) .
The first phase of Malaysia’s medical devices registration scheme was the voluntary registration of establishments via MeDVER, an electronic registration system launched on 12 January 2006, by the Malaysian Ministry of Health to encourage voluntary registration of manufacturers’ products as a transitory step before medical device regulations were fully imposed. The Medical Device Authority Act 2012 (Act 738) came into effect on March 15, 2012 to establish the Medical Device Authority, to oversee the execution of the Act. The Medical Device Act 2012 (Act 737) and Medical Device Regulations 2012 came into operation on July 1, 2013, replacing the voluntary registration scheme.
The Medical Devices Act 2012 introduces the requirement for all medical devices that are imported, exported and placed for sale in Malaysia to be registered. There will be a transition period of two years, from July 1, 2013, for medical device manufacturers to register with the Medical Device Authority. In addition, the Act calls for all medical device establishments (manufacturers, distributors, importers, exporters, conformity assessment bodies and local authorised representatives, but not including retailers), to obtain an establishment license from the Ministry of Health. Unlike the device registration timeline of two years, local manufacturers, importers, distributors and local authorised representatives will have just one year to obtain their establishment licenses .
Registered medical device establishments will be required to have good design and manufacturing standards, conform to safety and quality assessment standards, and have proper procedures in the event of voluntary/mandatory recall. Conformity Assessment Bodies, appointed by the MDA, are responsible for independently assessing medical device manufacturers, importers and distributors to ensure compliance with the Medical Devices Act 2012.
Depending on the classification of the medical device, the assessment process will consist of several steps including a medical devices approval review that is necessary prior to registering the device with the Medical Devices Bureau; assessing the organization's medical device Quality Management System, (in compliance with ISO 13485 or similar) and assessing to the Good Distribution Practice for Medical Devices (GDPMD) throughout the supply chain in accordance to regulatory compliance set by the Medical Device Authority for post-market surveillance.
Medical device organisations will need to appoint a Conformity Assessment Body in order to be certified to a Quality Management System, or to achieve conformity to the GDPMD. Applications for medical device registration, establishment licensing and export permits are submitted to the Medical Device Authority using an online system, the Medical Device Centralised Application System (MEDCAST) launched on 1 July 2013. Failure to register a medical device, or to obtain an establishment license is an offence punishable by a fine of up to RM 200,000 and/or a term of imprisonment of up to three years. The establishment license also imposes additional conditions which if breached, will expose licensees to a fine of up to RM100,000 (Est. USD 30.1K) and/or for a term of imprisonment of up to one year .
The Medical Device Authority Act and the Medical Device Act 2012 will both have significant effects on Malaysia’s medical device market. With mandatory registration in place, the quality and compliance of medical devices will be improved, and the medical devices will be protected under patent law. Thus, it will lead to improved foreign investment opportunity and drive the growth of Malaysia’s medical device market.
All Eyes on Asia
Medical device companies remain bullish about Asian markets. Japan is still #1 in healthcare spending, but China will soon pass Japan and is the engine of growth in the region. Emerging markets in South East Asia are also garnering more attention. The Asia-Pacific (71%) region is rated as the highest potential growth market in terms of five-year growth when compared to North and South America (61%) and EMEA (70%).
Harmonisation of industry and regulatory requirements will help eliminate trade barriers and promote economic development among ASEAN countries. The integrated regulatory regime will make it easier for Western companies to enter the ASEAN medical device market and register products in Southeast Asian countries. The AMDD is also expected to reduce uncertainty in the market, improve patient safety standards across the region and may open the door to other forms of regulatory integration within ASEAN, such as integrated abridged registration processes and common product approval procedures.
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