Pharmaniaga up to the task

PHARMANIAGA Bhd’s Practice Note 17 (PN17) status does not affect its logistics arm’s service in distributing medicines to Health Ministry (MOH) facilities, says Dr Zaliha Mustafa.

In a written reply to Tan Hong Pin (PH-Bakri) dated June 6, Dr Zaliha said her ministry was made to understand that the PN17 status was due to accounting streamlining carried out according to the Malaysian Financial Reporting Standards (MFRS) and the practices of good governance.

“The PN17 status is due to the allocation of the Covid-19 vaccine, which was a slow-moving stock.

“Nevertheless, the Health Ministry understands the PN17 status does not affect the operations of its subsidiary Pharmaniaga Logistics Sdn Bhd (PLSB) in conducting logistics activities and distributing medicines to MOH facilities nationwide.

“On top of that, Pharmaniaga Bhd is owned directly and indirectly by the Armed Forces Fund Board which is under the Defence Ministry,” she added.

PLSB, she said, had experience in the supply and logistics of medical products that was on par with international logistics companies such as DKSH and Zuellig Pharma.

Dr Zaliha also said PLSB had successfully built logistics networks comprising bumiputra and other local entrepreneurs. The company also has the logistics capacity for cold chain products.

She added that PLSB had given an “excellent” performance and fulfilled the obligations in its concession agreement with the government, including hitting the key performance indicator (KPI) of over 98% by fulfilling orders within Peninsular Malaysia in seven days and 10 days for Sabah and Sarawak.

She said the government had agreed with the proposal to give PLSB a fresh 10-year Medicines Supplies Logistics Service concession, given the company’s performance.

Under the concession, the company will manage the logistics and supply network for medicines to MOH facilities.

She said MOH facilities would not have to store an ample supply of medicines as they would be able to source the needed supply within seven to 10 days.

She also said this required the concessionaire to have a strong financial footing to ensure there was no disruption in supply.

Tan had asked whether the ministry was ready to end Pharmaniaga’s monopoly on medicines given its PN17 status and having reported a net loss of RM664.39mil in the fourth quarter that ended Dec 31, 2022.

Pharmaniaga was admitted to the PN17 category on Bursa Malaysia on Feb 27.

In a filing with the stock exchange, the pharmaceutical company said it had triggered the PN17 criteria pursuant to its audited consolidated financial statements for the period ending Dec 31, 2022.

For its first quarter ended March 31, 2023, Pharmaniaga’s net profit dipped to RM2.65mil from RM27.73mil in the corresponding quarter last year.

Revenue declined by 8.5% to RM880.45mil from RM962.17mil previously, mainly due to lower customer demand in both the concession and Indonesia segments.

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