Security as the backbone

FROM food to medicine and from semiconductors to medical devices, just about everything important to our daily lives has a “security” aspect to it.

“Security” here refers to the need to have some ability to churn out these products domestically. It is a global trend, stemming from all the shocks that countries have suffered in recent times.

Many governments today are looking to maintain domestic or at least allied-country capability for these strategically important sectors. The Covid-19 pandemic, geopolitical tensions, trade disputes, semiconductor shortages, and recent conflicts have all reinforced this shift.

While we are more familiar with efforts aimed at food security and helping Malaysian companies move higher up the semiconductor value chain, less is known about what’s being done about medical devices.

Also referred to as the medical technology or med-tech sector, Malaysia has long been a hub for global multinationals (MNCs) in the business. The country now boasts the highest concentration of med-tech MNCs in the region.

A very good eco-system exists as local companies both aid and benefit from these MNCs. Yet, there are hardly any homegrown players creating and manufacturing their own med-tech devices.

Even the MNCs that manufacture medical devices on our shores export most of those products. As a result, the bulk of medical devices bought by hospitals in Malaysia are imported.

One could argue that there is nothing wrong with this scenario, as the procurement departments of these hospitals go about sourcing the cheapest and best medical devices from around the world.

But what happens if there is a shortage of certain important devices? We experienced this during the Covid-19 pandemic when we ran out of ventilators. Another issue is pricing. More basic med-tech products can be made at cheaper prices domestically. No wonder governments around the world are seeking to boost their local med-tech sectors, now dominated by the United States, Europe, South Korea and Japan.

Malaysia has been a leading producer of rubber gloves for the medical sector, but those products are in the lower levels of med-tech and have increasingly been impacted by cheaper alternatives from China and Vietnam.

Entrepreneurs trying to make it in the higher value-added med-tech products speak about the arduous journey they face, primarily from a lack of funding.

Commercialising a medical device can take years due to the high costs involved in getting their products certified by global medical regulators such as the US Food and Drug Administration (FDA) and Europe’s CE.

Certification under the European Union Medical Device Regulation alone can cost up to RM2mil for a single product, some industry players say.

Some developments could help fast track the process. SIRIM Bhd, for instance, is ­s­eeking to affiliate with European notified bodies so that they can support Malaysian companies seeking CE certification, reducing costs and waiting times.

This is similar to what the Medical Device Authority (MDA) is doing through its reliance agreements with countries like China, Singapore, Thailand, Uzbekistan and Japan, with discussions ongoing with the United Arab Emirates, Brazil and Egypt.

The aim here is to reduce duplicate regulatory assessments, whereby a medical device does not have to undergo a full regulatory assessment from scratch in that country.

These reliances are also able to quicken the process for companies to obtain their CE and FDA certifications by allowing regulators to build on assessments already conducted by trusted counterparts, reducing the need for companies to repeat the full regulatory process.

Other fast track programmes include SIRIM’s Medical Device Innovation Centre and the MDA’s Innovative Medical Device Pathway, all of which help hasten the time-to-market of medical innovations for companies.

While such fast track programmes are good initiatives, funding remains one of the biggest constraints, particularly when products reach the prototype testing stage. This is when companies need substantially more capital to scale up manufacturing, complete clinical validation and enter the market.

Rather than competing for the same small public fund pool, med-tech companies are increasingly looking to tap the larger private capital fund space. For this reason, Malaysia Medical Device Manufacturers Association (Perantim) launched INNOMed, a national medical innovation platform that brings together researchers, start-ups, venture capital firms, high-net-worth investors and industry players to help promising technologies secure the financing needed to reach commercialisation.

One company that emerged from the platform is Vista Robotics, which is developing a robotic system for spinal surgery. The project is spearheaded by Malaysian-born and US-based medical device innovator Roy Chin.

The robotic system is expected to be launched globally in 2028 after obtaining FDA approval.

Beyond the spinal surgery platform itself, the underlying technology could eventually be adapted for other medical applications, including dental and cardiac procedures.

The hope is that the project will draw greater investor interest to Malaysia, while encouraging other leading medical device innovators from the United States to come to Malaysia, and help spur the growth of the country’s med-tech sector.