Pharmaniaga has been given a conditional agreement to keep providing medical supplies to the government, according to news released by health minister Dr. Zaliha Mustafa.
The country’s health system is “vulnerable, at risk, and heavily dependent” on a single government-linked company (GLC), according to the Galen Centre for Health and Social Policy, as a result of Putrajaya extending Pharmaniaga Bhd’s concession for the following ten years.
The health think tank said in a statement today that this was a setback for healthcare reforms because it gave one company a monopoly instead of fostering healthy competition and a range of options.
It claimed that the government’s exclusive concession policy also gives particular businesses, including Pharmaniaga and other GLCs, a stranglehold and significant influence over significant parts of the healthcare system, including hospital services.
According to the think tank, this has led to an unhealthily excessive reliance on the idea that these corporations will be seen as indispensable and “too big to fail.”
Azrul Khalib, the CEO and founder of the think tank, stated that this decision “confirms that perception.” According to him, the extension will also signal to pharmaceutical industry participants that it is pointless for them to develop, invest in, and expand their companies given that Pharmaniaga will hold the government’s monopoly for the next ten years.
Azrul added that the concession extension was a “poor business practise” that kept middlemen in place, unnecessarily raising the price of medicines.
He claimed that allowing vendors to bargain and submit bids directly to the government could potentially save the government millions of dollars, reduce costs, and make newer therapies available to patients.
Pharmaniaga has been given a conditional agreement to keep providing medical supplies to the government, according to news released by health minister Dr. Zaliha Mustafa yesterday. This is true even though Pharmaniaga has been classified as a financially distressed company under Practice Note 17 by Bursa Malaysia.
Azrul continued by saying that the auditor general had discovered that Pharmaniaga had given the health ministry defective ventilators during a public health emergency, endangering many lives.
He argued that rewarding a company for making questionable business decisions regarding the Covid-19 vaccines, which cost more than half a billion ringgit, was disappointing and perplexing. Will this strategy be used each time this GLC experiences financial difficulties?
Azrul added that if Pharmaniaga continues to control the market through a monopoly, allowing for healthy competition will force it to improve rather than take things for granted.