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Pharma Business
Growing Demand for
Halal Pharmaceuticals
With increase in awareness for implementation of Sharia-approved healthcare
products, modern lifestyle and rising income levels, the demand for Halal
medicines also soared in recent times. Siddharth Dutta explains how.
July-September 2014 • PharmaAsia
In the Middle East and North Africa (MENA)
region, one of the prominent traditional forms of
medicine called “Unani” or “Yunnai” (originating
from Greece) gave birth to the traditional Muslim
pharmaceutical industry in the time of Galen (131-
210 AD), a prominent Greek physician, surgeon
and philosopher who had a huge influence on
Muslim physicians.
Later, this form of medicine was developed
by Arab physicians Rhazes (850-925 AD)
and Avicenna (980-1037 AD). The traditional
medicine preferred by Muslims struggled to pick
up due to poor R&D, lack of market demand and
investment, and low-quality finished products.
With growing awareness for implementation of
Sharia-approved healthcare products, modern
lifestyle and rising income levels, the demand
for Halal medicines has also increased in recent
years. Countries like Australia, the US and
Singapore have started investing in Halal
pharmacies, and it is likely that this trend will
grow to other regions as well.
Malaysia has been one of the major contributors
in upgrading the processing and quality of Halal
pharmaceuticals. The government has been
working on this since 1975, and recently has
come out with the world’s first Halal certification
for pharmaceuticals in 2012. Malaysia is closely
followed by Indonesia and Thailand.
Market overview
Halal pharmaceutical has strong growth
Traditional and modern pharmaceutical
industries have co-existed for a long
time. On one hand, modern medicine
is more technology based, while the traditional
form is more herbal approach (sometimes animal
products).
Halal vaccines for meningitis, hepatitis and meningococcal are expected to enter the
market by 2019. (Photo courtesy of DXfoto.com)

2. www.PharmaAsia.com 31
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July-Septemer 2014 • PharmaAsia
opportunities for investors due to the existing niche population,
high disease prevalence, and increased awareness of Sharia
approvals for these products. More than 25 percent of the global
population are Muslims—an estimated 1.8 billion people. Of the
total Muslim population, approximately 48 percent live in MENA,
24 percent in Asia-Pacific, 7 percent in sub-Saharan Africa, and
the rest in Europe and America.
Out of faith, Muslims prefer pharmaceuticals which are permitted
by the Sharia. Broadly speaking, pharmaceuticals for Muslims are
categorised as “Halal” (in Arabic), which is lawful and permitted by
Sharia; “Haram”, which means prohibited; and finally “Mashbooh”,
which means doubtful or questionable.
The global Halal market is estimated at US$2.3 trillion (excluding
Islamic banking), of which the pharmaceutical industry has a
share of US$0.5 trillion (market share of 22 percent). Malaysia,
Indonesia and Singapore are some of the prominent markets for
Halal pharmaceutical manufacturers, while retail outlets have
been operational in countries in other regions.
Factors that favour growth
Investors who are looking at Halal pharmaceuticals as their next
business should ask these questions:
• What are the challenges?
• Where is the addressable market?
• How can I benefit from this?
Currently the biggest challenge faced by pharmaceutical
companies is finding the origin or source of the medicines.
Most antibiotics are sourced from bacteria, and whether they
be can Halal is highly debatable. This can be an opportunity
for manufacturers to supply synthetic molecules with similar
composition and efficacy. Strong R&D can only drive such a
situation.
Halal vaccines
The vaccine market is lucrative since there is a pressing demand
for vaccines amongst the population which heads to Mecca
for their annual pilgrimage (Hajj). Since the existing vaccines
for meningitis, hepatitis and meningococcal are pork-based
(pork is forbidden or “Haram” in Islam), the Malaysian Industry
Development Corporation (HDC), in collaboration with a Saudi
Arabia-based partner, is now developing Halal vaccines for such
diseases. These vaccines are expected to enter the market by
2017.
Entry point markets
Companies who are eyeing to set up new manufacturing
facilities have to take a lot of factors into consideration, such
as environmental regulation compliance, incentives for new
investors (tax rebates), reliable infrastructure, and skilled
manpower.
Most antibiotics are sourced from bacteria, and whether they be can
Halal is highly debatable.
Products with Halal certifi cation can also be consumed by non-Muslims
due to their high quality and hygiene. This means Halal medicine is not
a niche market.

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In the last few years, several countries have become sought-after
places for new investors of Halal drug manufacturing. Some of
them are:
1. Malaysia: The country is one of the few which has been
favouring the Halal industry. Halal Industrial Parks in Penang
have been opened for pharmaceutical investors to set up
manufacturing plants. In addition, there is a Halal Penang port
with warehouse and cold storage facilities for export.
Due to the high cost of medical services and drugs, there is a
high demand for low-cost medicines, herbals and biosimilars
in the domestic market. So besides exporting Halal medicines,
investors consider Malaysia as an alternative market for end users
(non-Muslims and Muslims alike).
Sixty percent of the population in Malaysia are Muslims and
can be considered a huge potential market for Halal
pharmaceuticals. Chemical company Malaysia (CCM) Berhad
is one of the leading Halal pharmaceutical companies in the
country. It reported a net export of US$10.8 billion in 2012
with its 200 Halal-certified products. CCM — including its three
subsidiaries, namely CCM Pharmaceuticals Sdn Bhd, Upha
Pharmaceutical Manufacturing (M) Sdn Bhd, and Duopharma
(M) Sdn Bhd) – is also the first and only company to have been
awarded this certification.
Malaysia started its process of Halal pharmaceutical long back
in 1975. In fact it is the first country in the world which created the
halal certification for pharmaceutical products, MS2424, certified
by JAKIM (Islamic Development Department of Malaysia).
2. Indonesia: The Indonesian government is currently indecisive
in passing the Halal law for medicines, and it is unlikely that the
law will be passed before 2016.
Many drug manufacturers (including vaccines) in the country
import raw materials and hence the origin of products (Haram
or Halal) is unclear. This will likely slow down Halal investment
pickup in Indonesia.
3. Brunei: There are Halal pharmaceutical manufacturers in
Brunei as well. Simphor Pharmaceutical, an emerging Halal
pharmaceutical company, is aiming to enter the Middle East and
ASEAN markets for its Halal nutraceuticals and pharmaceutical
products. The company, which operates as a joint venture with
Canada’s Viva Pharmaceutical Inc., has invested US$32.6 million
July-September 2014 • PharmaAsia
The traditional medicine preferred by Muslims struggled to pick up due
to poor R&D, lack of market demand and investment, and low-quality
fi nished products.
for this project and currently awaiting certifications from local
governments.
Final word
Halal consumption is a principal focus of Islam. With the awareness
and availability of Halal medicines, the market demand has also
increased. However, it remains to be seen if Asia-Pacific would
take over MENA in terms of manufacturing and export. It would
be also interesting to observe if Halal vaccine development can
change the market perception.
Products with Halal certification can also be consumed by non-
Muslims due to their high quality and hygiene. This means Halal
medicines is not a niche market. PA
Dr Siddharth Dutta is the Industry Manager for Life Sciences at Frost
and Sullivan, Malaysia.