‘Graft’ in supply of drugs

  • Nation
  • Thursday, 14 Jun 2018

Life savers: Billions of ringgit of medicine are supplied to public hospitals nationwide.

PETALING JAYA: Details of high-ranking officials and politicians or their relatives allegedly involved in bid rigging of open tender process, hence, controlling the supply of billions of ringgit worth of drugs supplied to the Government, which could lead to high drug cost, have emerged.

In a 12-page document emailed to the Health Minister Dzulkefly Ahmad and forwarded to a few parties including The Star, the document revealed the monopoly of the supply of drugs to the Health Ministry.

Dr Dzulkefly said that he will scrutinise the documents before making any conclusion.

According to the documents, from 2013 to 2016, the total medicine tender awards by the Health Ministry which amounted to RM3.7bil were controlled by six tendering agents.

It claimed that collectively, the top three tendering agents were awarded RM2.8bil or 75.9% of the RM3.7bil; top six were awarded RM3.4bil or 90.93% of the RM3.7bil of the total tender contracts value.

The document also pointed out that for the same period, half of the tenders had only one single participant (tendering agent) and represented RM1.8bil of the RM3.7bil total contracts value.

The document stated that there were many established distributors, resellers and Bumiputra tendering agents in Malaysia but the contracts were only awarded to a handful.

“More importantly, the top tendering agents are actually owned by high ranking officials and/or politicians, or relatives of high ranking officials and/or politicians.

“International pharmaceutical companies collude with official-owned tendering agents to bid rig,” it said.

According to the document, these drugs supplied are the open tender for medicine not covered under the Approved Product Purchase List (Pharmaniaga concession) which international pharmaceutical companies could participate.

The ministry puts out a procurement tender and the companies will engage Bumiputera tendering agents to bid for the tender according to the tender specifications and the agents are paid a percentage of commission based on every tender won, it said.

It claimed that these tendering agents act as intermediaries and earn a clean profit since they do not handle marketing, logistics or distribution.

“It is no coincidence that more than 70 pharmaceutical companies all only use the same few official-owned tendering agents. ,” it said, accompanied by proofs of the allegations.

By refusing to supply or deal with other resellers and tendering agents, international pharmaceutical companies grant official-owned tendering agents a monopoly and thus securing an automatic win in a tender, it said.

“From at least 2011 to the present, international pharmaceutical companies have been paying bribes to high ranking officials/politicians to assist in obtaining or retaining business in Malaysia in violation of the United States Foreign Corrupt Practices Act (FCPA).

“These corrupt payments are concealed as commission payments to the official-owned tendering agents,” said the whistleblower.

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