Pharmaniaga Says Operations Normal Despite Losing Government Concession

Pharmaniaga is confident that its “excellent performance” will be the main factor in the government continuing its services.

KUALA LUMPUR, Oct 31 — Pharmaniaga Bhd said its business operations were running as usual, after the government announced that its concession to supply the Ministry of Health (MOH) medicines would not be renewed.

Pharmaniaga, Malaysia’s largest pharmaceutical company, said it was confident with its ability to continue its services to the country.

“As the government believes in meritocracy, the Company is confident that its performance will be the key factor to continue its services, either through extension of concession or open tender contract,” Pharmaniaga said in a brief statement.

Health Minister Dzulkefly Ahmad told the press earlier today that the government has decided not to renew Pharmaniaga’s 25-year-long concession to procure medicines for MOH, as it wants to replace the ministry’s concession system of distribution and logistics services for medical supplies with an open tender one.

But Pharmaniaga’s services to MOH will continue — despite the end of its concession on November 30 — pending the Cabinet’s decision on the type of mechanism for the open tender that Dzulkefly hoped would be ready by the first quarter of next year.

Finance Minister Lim Guan Eng said last month that the government was reviewing MOH’s drug procurement concession with Pharmaniaga which he described as a “monopoly” that cost the government over RM1 billion annually.

Pharmaniaga is the biggest Bumiputera tender agent in the country with exclusive concession to supply 700 items in the Approved Product Purchase List (APPL) comprising medicines and other medical items, determined by MOH, to government hospitals, institutions, and clinics. This comprises over a third of the government’s drug supply.

The company received sole concession for a quarter of a century since Putrajaya privatised the medicine procurement system in 1994.

Pharmaniaga’s concession provides distribution and logistics services for the products procured under the APPL. According to the Malaysia Competition Commission (MyCC), Pharmaniaga supplied 38.5 per cent of the RM2.3 billion total cost of medicines procured for all MOH hospitals, institutions and clinics in 2015.

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