Halal Pharmaceuticals: New Growth Sector

Malaysia is in the forefront of the global halal Pharmaceutical Industry.  
The certification body, the Department of Islamic Development Malaysia, better known in its official Malay name JAKIM, published the world’s first halal pharmaceuticals standard ie "ISO MS2424: 2012" Halal Pharmaceuticals General Guidelines.
Chemical Company of Malaysia Berhad (CCM) was the first to venture into the halal sector about 17 years ago, from vitamins and health supplements to over-the-counter (OTC) medicines such as painkillers, analgesics, eye drops, cough mixtures, ointments and creams.
In the past three years, the number of halal pharmaceutical players, excluding traditional medicines and cosmetics manufacturers, has significantly increased.
“When we got halal certification in 2013, we were the first, and we now see 20 to 30 companies out of around 70 pharma manufacturers in the country, so the sector has grown quite well,” Leonard Ariff, Group Managing Director of CCM Berhad.
Leonard estimated the overall pharmaceutical sector to be growing by 10 to 12% per year, while CCM’s exports are growing at close to 15%.
Demand is driven at the domestic level by the country’s 31.7 million people, around 60 percent of whom are Muslim, although uptake of halal pharmaceuticals is still low overall.
“What sells the most in the halal segment, at 35 percent of the market, is food and beverage, then ingredients, and pharmaceuticals is 1%. Acceptance is still low at the moment,” said Dr Tabassum Khan, Managing Director of AJ Pharma Holding and Chairman of AJ Biologics, an initiative of the Aljomaih Group of Saudi Arabia, which has facility in Malaysia.  
Malaysia is pushing exports of pharmaceuticals which, according to the Malaysia External Trade Development Corporation (MATRADE), valued at MYR 1.31 bil  (USD 317 mil) in 2015, an increase of 15.8% over 2014.
Exact export figures for halal pharmaceuticals are not readily available, but Malaysia’s Halal Industry Development Corporation (HDC) estimates that the top export markets are the United States and Singapore at around $24.2 mil each, and Nigeria, Hong Kong, and China with around $726,521 each in 2014.
Holding back exports is the lack of mutual recognition of halal certification by regulatory bodies around the world, few of which have the same standards as JAKIM, especially in pharmaceuticals.
At the domestic level there is a general lack of raw materials for the industry, despite the country’s biodiversity, which could be tapped into to develop resource-based biogeneric drugs. 
What is needed for the sector to develop further is greater synergy and economy of scale, such as through halal pharma hubs, bigger market players, and for the global pharmaceutical sector to be more geared towards halal ingredients, which is gradually happening, with global ingredients suppliers like DSM and BASF certifying halal lines.
Currently, in Malaysia, prescription medicines are not allowed to carry halal logos on packaging, but halal references in promotional materials are allowed. Labeling of gelatin is compulsory, to ensure its source of origin is clear.
“One of the factors Malaysia is grappling with is prescription products, since the government is being cautious to avoid patients refusing life saving medication purely because they are unsure of its halal status. This involves a holistic approach to educate stakeholders, and how quickly halal pharma companies develop halal products,” said Leonard.
CCM is moving into larger molecule products such as biologics, and has invested in a South Korean company to push such development.
AJ Biologics is also pushing R&D, recently acquiring Denmark’s Statens Serum Institut (SSI) vaccine production business to develop halal vaccines for EV71 (against Hand, Foot and Mouth Disease) and MCV4 (meningococcal meningitis).
“The biggest motivation for acquisition is to have access to the global vaccine market and to have upstream manufacturing capabilities for our project in Malaysia. The other motivation is to have access to a polio vaccine. Developing an animal source-free polio vaccine would be a major contribution to the Islamic world,” said Dr Khan.
AJ Biologics is expected to start commercial operations in the first quarter of 2018, targeting the Middle East and East Asian markets. “The MCV4 will be the first ever halal certified meningococcal vaccine for all the pilgrims traveling to Saudi Arabia,” added Dr Khan.
/Global Islamic Economic Gateway Oct 2016

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