KUALA LUMPUR, Nov 7 – Following the government’s decision not to renew Pharmaniaga Bhd’s drugs and medical supplies concession, the firm has witnessed a 300 per cent spike in orders, largely from hospitals and government clinics.
“We are getting more orders and at the same time various vendors have expressed concerns on whether there would be a disruption to the supply chain in the near term,” a source within the company told The Malaysian Reserve.
“There were already concerns on whether the supplies, especially to areas inaccessible by land, can be done within the time stipulated, as what Pharmaniaga has been doing all this while.”
Government-linked company Pharmaniaga has 90 vendors under the Ministry of Health’s (MOH) approved product purchase list (APPL), supplying and distributing drugs and medical devices to 1,600 hospitals and clinics throughout the country.
Antamax Manufacturing Sdn Bhd, a vendor under the firm, was reportedly concerned that any firm selected under the proposed open tender system to replace Pharmaniaga’s concession may not be able to fulfil the vendors and customers’ demands.
“Prior to this, we have been dealing with MOH directly under the central contract system. We had to manage the logistics side on our own, it’s very troublesome for us,” said Antamax’s manufacturing director Mohd Amirrol Mohd Shariff.
“We can manufacture, but we found it hard to deliver our supply ourselves. These are additional costs as we are not in the logistics business. We do not have the infrastructure or expertise such as Pharmaniaga.”
Another vendor, Foresight Sdn Bhd CEO Zulkifli Ismail, reportedly expressed concern and questioned if the government’s move was to encourage foreign players into the market.
“I think if the government decides to appoint a new player, it will take some time for the new company to adjust and deliver the supplies accordingly,” Zulkifli said.
“I am doubtful that with the open tender system, we can lower the total costs as well. What I fear is, private companies may impose minimum order quantity for any orders, and the customers may have to incur more cost.”
Despite the termination of the contract, Pharmaniaga is confident in securing the right to distribute even in an open tender system, due to its extensive logistics network and infrastructure.
“As the government believes in meritocracy, the company is confident that its performance will be the key factor to continue its services either through an extension of concession or open tender contract,” it said.
Last month, the government announced that it will not renew Pharmaniaga’s 25-year-long concession to procure, store and distribute medicines for the MOH that Finance Minister Lim Guan Eng had dubbed a “monopoly”. The Bumiputera tender agent’s concession ends this November 30.
Health Minister Dzulkefly Ahmad said that the government has decided to replace MOH’s concession system of logistics and distribution services for medical supplies with an open tender system.
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, so as to prevent a disruption of MOH’s medical supplies and health services.