Definition of Herbal Medicine

The World Health Organisation (WHO) defined Herbal Medicine as :

“Finished, labelled medicinal products that contain as active ingredients aerial or underground parts of plants, or other plant material, combinations thereof, whether in the crude state or as plant preparations. Plant material includes juices, gums, fatty oils, essential oils, and any other substances of this nature. … may also contain natural organic or inorganic active ingredients, which are not plant origin.  Herbal medicines may contain excipients in addition to the active ingredients…”

Under the Specialty Natural Products of the National Agriculture Policy (NAP3) 1998-2010, herbal medicines/products has identified as one of the potential industry for Malaysia and referred as:

“ ..natural products based on botanicals (herbs, medicinal plants, spices and aromatic plants), and aquatic plants and animals. Botanical (including their extracts, exudates and essential oils) have found applications in a wide range of products including food & beverages, pharmaceuticals, herbal/traditional medicine, health care, health enhancing products, dietary supplement, flavours and fragrance, cosmetics and toiletries and various consumer goods.”


Global Trends
   
For centuries, people from all over the world have been using plants for medicinal and healing purposes. Traditional medicine is a very important part of health care, but their quality assurance needs to be developed. Most of the population in developing countries still relies mainly on indigenous traditional medicine for their primary health care needs but these uses have not been incorporated into their national health systems. There has been a growing interest in herbal medicine, causing an increase in international trade in herbal medicines and other types of traditional medicines.

The current global herbal industry estimated to be USD 80 billion in 2000 and the World Bank projects it to be USD 200 billions in 2008 and 5 trillion in 2050. As year 2001, The Economist Intelligence Unit reported that internationally, herbal medicine sales are growing 10% a year. 

A World Health Organisation (WHO) report recognised that 80 per cent of the world’s population depends on herbal medicine The global herbal trend shows that herbal therapy enters the mainstream medicine from 1970-2000.

Herbs and botanicals were humankind's first medicines; and increasingly, traditional medicines derived from plants, herbs and other natural sources are being sought as alternatives to modern medicine and pharmaceuticals. The World Health Organization (WHO) estimates there are more than 20,000 medicinal plants and 4,000 plant drugs.

"Medicinal plants are also important for pharmacological research and drug development, not only when plant constituents are used directly as therapeutic agents, but also when they are used as basic materials for the synthesis of drugs or as models for pharmacologically active compounds." (WHO)

In the U.S, 25% of pharmaceuticals are derived from plants. Surveys indicate that in North America, people use herbal supplements for colds/flu, fatigue, stress, depression, sore throat, allergies, memory loss, anxiety, and immune system weakness. In Germany, 70% of doctors are prescribing herbal medicine to patients. Currently, the top herbal categories are garlic, gingko, St. John's wort, echinacea, ginseng, saw palmetto, kava-kava and various Chinese herbs.

Herbs and medicinal plant are mainly used for phytomedicines, flavours and fragrance, biopesticides, nutraceuticals and functional food. Market growth in medicinal herbs and botanicals is expected to average 7.6% a year between 1999 and 2002. Worldwide sales figures for herbal remedies in year 2000 and projection figures for year 2002 are as follows:



Billion US$( retail prices)    2001    2002
·    Europe    6.9    7.5
·    Asia    5.1    6.2
·    North America    3.9    4.3
·    Japan    2.3    2.6
·    South America    0.6    0.8
·    Australia / New Zealand    0.3    0.4
·    Mid East    0.1    0.1
·    Africa    0.1    0.1
·    RoW    0.3    0.4
Total Value    19.6    22.4
Estimate based on IMS market analysis for 1997 plus main growth rates and side markets

Global Market
   
There is general agreement that there is enormous market growth potential in Canada, United States, Europe, Japan and other parts of Asia. There are strong market drivers for herbal industry and the potential demand is huge. The use of natural products, especially herbal-based products, has been increasing worldwide.

Factors affecting demand for herbal products in markets around the world are consumer awareness, culture, ethnicity, traditions, education, age, regulatory environment and income. Europe, Japan and Asia are more receptive to herbal-based products because of the historical use of natural medicinal products in those parts of the world.

Another market in which herbal products are being used and showing potential increases is the global fragrance market. The fragrance market is worth about US$50 billion a year, 25% of which is from the Asian-Pacific region (excluding Japan). For France, the world’s major exporter of perfumes and cosmetics, it is the country’s leading export sector.

In Europe, the herbal market is expected to peak at US$6 to US$8 billion in the next two to three years. The herbal dietary supplement market has been growing at an annual rate of 25 percent and is currently estimated at US$4 billion.(PR Newswire, September 29, 1999.). In Germany, 70% of doctors are prescribing herbal medicine to patients.

In the U.S., the natural products business reached nearly $15 billion last year with 60 million reported trying herbal medicines. Over the next three years, natural products are expected to increase at a rate of 10-13% per year, dietary supplements 8-10%, herbs and botanicals 12-18% and natural personal care products, 10-12%.

A similar trend is occurring in Canada with the number of consumers using some form of alternative medicine increasing yearly. In a 1997 poll (CTV/Angus-Reid), 42% of Canadians said they used alternative medicines and/or practices, an 81% increase over the previous 5-year period. A more recent survey (Angus Reid, 2000) indicates that Canadians are ingesting vitamins, minerals and herbal supplements in unprecedented numbers to ward off illness, prolong their lives and maintain youthful looks and energy.


Issues affecting the global market for herbs and botanicals include:

·    escalating expense of western pharmaceuticals
·    emergence of global economy with ease of communication
·    a desire to return to a natural lifestyle
·    a renewed interest in ethnic cultures and rots
·    growth of the U.S. market as a growth-trend setter
·    drug companies with global presence are now entering the market.

Issues and Challenges
   
The strong trends and re-emergence of complementary medicine in both developed and developing is challenging various governments/authorities and professionals to address public health. The critical issues affecting the industry include:

·    To create an environment that ensures quality, safety and efficacy of products
·    Harmonization of regulations that is vary from one country to another
·    Provision of appropriate, accurate and reliable information to the public
·    Classification for regulation of the herbal products either classified as food or drugs

Natural Business Journal reported that the biggest challenge that the industry has ever faced is genetically modified organism (GMOs). Despite the technology is in its infancy, biotechnology continues to evolve and able to create foods that are potentially healthier than natural foods.

Local industry overview

Malaysia as being the world’s oldest rainforest was one of the main ports for the world’s spice and herb trade. Malaysia is the 4th most bio-diverse nation in Asia after India, China and Indonesia. Malaysia is the one of the only 12 countries in the world with a mega diversity of plants, medicinal and aromatic plants and home to about 12% of all the plant species on earth, which has not been fully exploited and cultivated.

The Malaysian tropical forest is one of the primary centres of biodiversity with an estimated 15,000 known plant species, 3,700 are known to be useful, 2,000 species with medicinal value and the balance remain unexploited. 

Herbal products can be applied to a wide range of products such as food and beverages, pharmaceuticals, herbal/traditional medicine, health care, health enhancing products, dietary supplements, flavours and fragrance, cosmetics and toiletries, dyes, detergents, biopesticides and other industrial chemicals.

Current Scenario

Study by MIGHT Interest Group (MIG) in Pharmaceuticals in 1998 reported that in 1997, the total figure for the local pharmaceutical market has been quoted as RM 1.2 billion for the western drug products whilst RM 2 billion for the traditional medicine.

Currently, there are about 149 herbal companies qualified under GMP and more than a thousand small companies operating in Malaysia. Total value of the domestic market for herbs and medicinal plants is estimated to be RM 4.55 billion with a dynamic growth from 15-20% annually. They are mainly used as follows:

Industrial Use    Value (RM)
·    Herbal remedies         2.00 billion
·    Flavours & Fragrance         1.60 billion
·    Pharmaceuticals/Nutraceuticals         0.95 billion
Total Value    RM 4.55 Billion
(Source : Dato’ Dr Md Shariff Ahmad, 1999)

Some pharmaceutical companies are involved in the production of dietary supplement incorporating local herbs. There are many more small scale operators and most of the products produced are often not manufactured according to GMP standards. A substantial amount of capital may required to upgrade current production facilities to meet the quality and efficacy standard.

The Malaysian health related food products industry is growing at a steady pace of 20% a year. They are few large or multinational companies being involved in the production of health/functional food such as low fat yogurt, low fat milk, probiotics/isotonics drinks, fortified spreads/cereals/bread/milk and fruit juices.

In cosmetics and toiletries, Malaysia grows very few crops for extraction of flavour and fragrance material. A large proportion of the materials used by the local industries is imported. The market is growing at 10% annually.

Generally, the plant-based manufacture of cosmetic, health care and herbal products are mainly from imported raw materials. More than 90% of the raw materials used are imported. (Dr Azizol Abdul Kadir 1998)

Statistics show that the total import value of medicinal and aromatic plants increased from RM 141 million in 1986 to RM431 million in 1996. There has also been a corresponding increase in exports from RM 5.9 million to RM 63 million over the same time period. However, the value of total imports is increasing much faster than that for exports due to increased domestic demand for medicinal and aromatic plants. (Ng. L.T., & Mohd Azmi Muhammad Idris 1997)

Based on data obtained from the Statistical Department (1986-1996) the import of crude medicinal plants kept on increasing for the past eleven years, except for a slight decline in the total import of medicinal plants in 1987, from RM 95 million in 1986 to RM 277 million in 1996 (an increase of 192%). The total exports, there was a slight decline in 1992, but overall the increase in export activity was not as great as that seen for imports













Malaysia :Import and export of medicinal plants for pharmaceutical uses (Statistical Department 1996)
   
YEAR    IMPORT (RM million)    EXPORT (RM million)
1986    93.4    4.1
1987    85.2    5.2
1988    143.9    8.2
1989    160.3    12.2
1990    160.4    16.7
1991    181.4    18.7
1992    197.7    10.1
1993    212.6    21.9
1994    224.9    34.9
1995    256.7    41.2
1996    264.7    55.9

The import of medicinal plants comes largely from China, India and Indonesia, while export is largely to Singapore. Import of raw materials for traditional medicines are in the form of powder, pellets and plants Export is mainly to Singapore, Phillipines, Australia and Hong Kong. These indicate a substantial trade in medicinal plant materials and products. (Ng. L.T., & Mohd Azmi Muhammad Idris 1997)

Regulatory
   
    In Malaysia the regulation body for herbal medicinal products is governed by National Pharmaceutical Control Bureau (NPCB), Ministry of Health. NPCB defines traditional medicines as “any product employed in the practice of indigenous medicine, whereby the drugs use only consist of one or more naturally occurring substances of plant, animal or part thereof, or in extracted or non extracted form”.
   
    Product that requires registration as traditional medicine (TM) is:

·    Traditional Medicine in Pharmaceutical dosage form (pill, tablet, capsule)
·    Dietary and health supplement in pharmaceutical dosage forms
·    Traditional medicines for external use containing combination with essential oil
·    Cosmetic products containing herbal ingredients with claim for treatment
·    Homeopathic medicine in pharmaceutical dosage forms
·    Liquors containing substances of traditional medicines with medical claim
·    Herbal tea packed in pharmaceutical dosage forms and labeled for use as drug
·    Anti dandruff, anti-pigment preparations and plasters containing herbal products as active ingredients.

Product that does not require registration as TM are as follows

·    TM prepared and dispensed directly to patients by practitioners
·    Preparation containing naturally occurring substance prepared by drying, crushing
·    Preparation containing naturally occurring substance used as food, spices or condiment
·    Preparation containing naturally occurring substance used as cosmetic – Phase 4 (cosmetic)
·    TM containing combination of substances under phase 1/ phase 2 (Scheduled Poison/OTC)

    Current laws and regulations for herbal products are tabled below:

Categories of Herbal Products (from National Agricultural Policy Definitions)    Current Laws / Regulations where the products fall under    Current Regulating Agencies in Malaysia    Other Remarks
·    Herbal/Traditional Medicine (Jamu)§    Pharmaceuticals§    Nutraceuticals    §    Sales of Drug Act 1952 (Revised 1989)§    Control of Drugs & Cosmetics Regulation 1984    §    National Pharmaceutical Control Bureau (NPCB) as Secretariat to Drug Control Authority (DCA), Min. of Health    Definition of the terms used
·    Health Food & Drinks§    Food & Beverages§    Health-enhancing products§    Dietary supplements    §    Food Act 1983 & Food Regulations 1985§    Products in Pharmaceutical dosage form- Sale of Drugs Act 1952 (Revised 1989); Control of Drugs & Cosmetics Regulation 1984    §    Food Quality Control, Ministry of Health§    NPCB as Secretariat to DCA, Ministry of Health    Definition of the terms used
§    Herbal Cosmetics & Toiletries (shampoo, cream, soaps & toothpaste    §    Control of Drugs & Cosmetics Regulation 1984    NPCB as Secretariat to DCA, Ministry of Health    Implemented in 2002
§    Flavours§    Fragrances         National Pharmaceutical Control Bureau (NPCB) as Secretariat to Drug Control Authority (DCA), Ministry of Health    Not yet implemented
Consumer goods (Dyes, detergent, bio-pesticides)     -    -    -




Institutional Framework

The Malaysian government is committed in promoting and developing the herbal industry. Since 1998, the Malaysian Industry Government Group For High Technology (MIGHT) under the Prime Minister’s Department has formed an interest group on herbal products and prepared MIGHT Herbal Products Blueprint. Consequently, MIGHT has established the Malaysian Herbal Corporation as a co-ordinating body for herbal industry.

In November 1999, the International Advisory Panel comprising of international eminent scientists, professionals and entrepreneurs met the local players in Kota Bharu and proposed strategies for the development of the herbal industry.

The growing interest in Traditional and Complementary Medicine (T/CM) has prompted the Ministry of Health to establish a National Standing Committee for T/CM and National T/CM Council, a special committees that look into all aspects of T/CM in the country with a view to include some aspects of T/CM in national healthcare system.
       

Conclusion

It is indeed that the potential of the industry is surely bright and Malaysia has the strong advantages to become a global player and strategies towards that should be formulated for success.