KUALA LUMPUR (April 21): Under fire Pharmaniaga Bhd has clarified that the government is not solely dependent on the group as all measures are taken to ensure a diversified supply chain to avoid overreliance on a single company.

In a statement on Friday (April 21), the pharmaceutical group said the Ministry of Health (MOH) spent approximately 35% of its pharmaceutical spending via Pharmaniaga, with the group’s role limited to managing the logistics and distribution of the products, as well as holding the drug stockpile in the tune of RM400 million as of Dec 31, 2022.

“The selection of suppliers, products and prices is determined by the MOH after concluding an open tender exercise.

“We believe that making a blanket statement that a single company, such as Pharmaniaga, has a dominant grip and major influence over large portions of our healthcare system in Malaysia is baseless,” it said.

Meanwhile, Pharmaniaga said its concession had expired in December 2019 and been extended until June this year.

“During the period, Pharmaniaga has been negotiating with the MOH on the new concession agreement.

“The froup is confident of its capabilities and expertise to carry out the responsibilities given by the government to manage the logistics and distribution of medicines and medical supplies to the MOH’s health facilities,” it said, without reference to recent reports that it had been awarded a ten-year concession.

Pharmaniaga claimed it was selected for the concession based on its successful track record in meeting MOH's stringent KPIs, achieving a more than 98% score consistently.

It said heavy monetary penalties are imposed by MOH for any non-conformances.

“To date, Pharmaniaga operates 15 pharma-grade warehouses and distribution centres at strategic locations throughout the country, supported by a fleet of more than 300 vehicles.

“The warehouses keep approximately RM300-RM400 million worth of drugs and medical supplies at any time, acting as the national drug stockpile that provides continuous and adequate supplies of drugs to the country.

Pharmaniaga said it has invested approximately more than RM600 million over the years, in developing the whole logistics infrastructure that supports an extensive and efficient distribution network throughout the country.

“This includes the RM400 million Pharmacy Information System (PhIS), as well as substantial investments in human capital, digitalisation and ESG based activities which are part of the group’s continuous improvement initiatives to enhance operational efficiency,” it said. 

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