KUALA LUMPUR, July 13 – The unity government has decided to award Pharmaniaga Berhad a new concession for seven years to supply the Ministry of Health (MOH) medicines and medical supplies.
The seven-year award to Pharmaniaga Logistics Sdn Bhd (PLSB), a wholly-owned Pharmaniaga subsidiary, for medical supply logistics services to the MOH from last July 1 to June 30, 2030 was given, even though PLSB previously supplied insufficient and defective ventilators to the MOH in 2020 during the Covid-19 pandemic.
Pharmaniaga Bhd is also under Bursa Malaysia’s Practice Note 17 (PN17) classification of financially distressed companies.
The local pharmaceutical company announced on Bursa yesterday that the contract was informed by the MOH in a letter dated yesterday to PLSB.
“Following the issuance of the letter, the interim period which commenced on 1 December 2019 to provide the services for the provision of medicines and medical supplies has ended.
“While MOH and PLSB finalise the terms of the new medical supply logistics services agreement, PLSB will continue to support and render its services to MOH based on the agreed salient terms.”
Health Minister Dr Zaliha Mustafa said in a written Dewan Negara reply last June 27 that the MOH was not currently taking any action over the supply of faulty ventilators from PLSB during the pandemic.
In a separate written Dewan Rakyat reply last June 6, the health minister also said the MOH had decided to renew PLSB’s concession – then announced for 10 years before Pharmaniaga Bhd’s announcement yesterday of the seven-year contract – due to PLSB’s “excellent” track record in filling 98 per cent of delivery orders on time.
The Galen Centre for Health and Social Policy said last April that the government’s verbal announcement then for a new decade-long concession for Pharmaniaga confirmed that Malaysia’s public health care system was vulnerable, at risk, and highly dependent on a single company for over a third of its branded and generic drug supply, and almost all of its logistics and pharmaceutical supply chain.
“The government’s practice of exclusive concessions which grant individual companies such as Pharmaniaga and other GLCs (government-linked companies), a dominant grip, and major influence over large portions of our health care system, including hospital services, has created an unhealthy over-dependence in the belief that these companies will be considered indispensable and become ‘too big to fail’,” Galen Centre chief executive Azrul Mohd Khalib had said.