Health Ministry dismisses claims of Pharmaniaga's monopoly over meds supply

KUALA LUMPUR: The Health Ministry has refuted claims that Pharmaniaga is monopolising the supply of medicines to the ministry.

Its minister Dr Dzulkefly Ahmad (pic) said that it was "strictly incorrect" to state that Pharmaniaga is the sole concession holder because there were also other vendors supplying directly to all of the ministry's health facilities.

He also clarified that the sourcing of pharmaceutical products is done through a tendering process.

"This procedure includes product and technical specifications by the Pharmaceutical Services Division of the Health Ministry and the selection process of products by the procurement board in the ministry," he said in a statement on Friday (June 8).

Dr Dzulkefly Ahmad was responding to a report by news portal FMT quoting CEO of Galen Centre for Health and Social Policy Azrul Mohd Khalib claiming that Pharmaniaga is the sole concession holder to purchase, store, supply and distribute both branded and generic approved drugs and medical products to 148 government hospitals and 2,871 clinics and district health offices nationwide.

The Galen Centre is a Kuala Lumpur-based independent public policy research and advocacy organisation committed to a free market approach in healthcare.

Azrul said that it is time that the ministry deals directly with pharmaceutical companies rather than depend on middlemen, as this would allow for millions of ringgit in savings.

He claims that Pharmaniaga would source for required medicines and sell them to the Health Ministry at a pre-determined price with an additional mark-up and commission rate to cover the costs of distribution, inventory holding and procurement.

Dr Dzulkefly said that the public sector manages medicine procurement through the Finance Ministry procurement policies and directives, namely purchases by national tenders, concession agreement and direct purchases by individual health facilities (such as hospitals and clinics).

Last year, the Health Ministry's expenditures for medicines and consumable items were around RM 3.3bil, he said.

Around 33.4% (RM1.1bil) of the ministry's pharmaceutical spending was from the concessionaire company, while 66.6 % (RM2.2bil) were purchases by the facilities through central contracts or quotations, he said.

"From these figures above, it is strictly incorrect to state that Pharmaniaga acts as the sole concession holder because there are also other vendors" he said.

Nevertheless, Dr Dzulkefly said that such huge chunks of supplies coming through opaque direct-negotiation mechanism of concession agreements of Pharmaniaga and other similar concessions for hospital services are a huge cause for concern to the public.

Being aware of the concerns of various bodies on this matter, a task force will be appointed to study the issues and make prompt and pertinent recommendations on best practices, he said.