Pharmaniaga gets 25-month interim period

by TMR/ pic by BERNAMA

THE government has agreed to provide a 25-month interim period for procurement of drugs to Pharmaniaga Bhd after its concession ends on Nov 30, said Health Minister Datuk Seri Dr Dzulkefly Ahmad (centre).

He said the interim period from Dec 1, 2019 to Dec 31, 2021, is to ensure that there is no supply chain disruption in the supply and distribution of medicines to the Health Ministry’s (MoH) facilities nationwide.

Dr Dzulkefly said the 25-month period will also allow the Health Ministry to make the necessary preparations to undertake the services which were done previously by Pharmaniaga, whose concession is said to be a monopoly.

“If the MoH is able to take over the role of Pharmaniaga in less than 25 months, then an open tender for procurement of medicines will be initiated early,” Bernama reported him as saying at a press conference after his ministry’s post-Cabinet meeting last Friday.

Dr Dzulkefly said the implementation of the interim period was decided at the Cabinet meeting after he tabled a memorandum on Pharmaniaga’s concession, which ends on Nov 30.

Meanwhile, Dr Dzulkefly said starting Dec 1, 2019, the government will award Pharmaniaga a five-year contract for logistics and distribution of medicines based on the capabilities, performance and everything that Pharmaniaga has built until now.

“The government has decided it as a matter of policy to award the contract for five years. After five years, the situation depends.

“In the five-year period, the government will build capacity through vendor development programmes and after that, the ministry will be able to make open tenders for medicine logistics concessions,” he said.

The Malaysian Reserve previously reported that Pharmaniaga had witnessed a 300% spike in orders, largely from hospitals and government clinics last week after the government announced the firm’s drugs and medical supply concession would end next month.

Under the concession, Pharmaniaga purchases, stores, supplies and distributes at least 700 pharmaceutical products but the concession ends on Nov 30.

Pharmaniaga was awarded the concession in 1994. Some parties had requested the government to open the sector after 25 years of single operator contract.

According to Hong Leong Investment Bank Bhd, Pharmaniaga could likely be retained as a key distributor due to the many issues which needed to be ironed out like the overall framework, tender and evaluation.

“Until all these are resolved, the government is likely to extend the logistics and distribution services of Pharmaniaga beyond Nov 30, 2019 (official concession expiry date), this has been echoed by the health minister,” it said in a research note recently.