Over-reliance on 1 company cause of medicine supply woes, says think tank

 

Galen Centre for Health and Social Policy CEO Azrul Mohd Khalib said other service providers had not invested or prepared themselves to complement or take over Pharmaniaga’s role. (File pic)

PETALING JAYA: The public health sector has relied for far too long on one company as a logistics provider of drugs and medicines, says think tank Galen Centre for Health and Social Policy.

Its CEO, Azrul Mohd Khalib, said the awarding of “decades-long concession agreements” to Pharmaniaga had deterred other companies from providing or offering to provide their services.

This, in turn, had prevented the government from finding other service providers should the company fail.

“As a result, we have always been vulnerable to disruption should Pharmaniaga run into problems. It was considered to be very unlikely, yet it has happened,” he told FMT.

He was commenting on the remarks by Pharmaceutical Association of Malaysia (PhAMA) executive director Chan Li Jin that Pharmaniaga’s PN17 classification for financially distressed companies had led to “uncertainty and anxiety” among medicine suppliers.

Azrul said Pharmaniaga’s cash flow problem would cause a severe disruption in its ability to service the government, as suppliers would begin to lose confidence in the company.

“No supplier would want to provide services or goods without guarantee of payment. Who will act as their guarantor?” he said.

Asked if there were any other companies capable of providing the same logistics services as Pharmaniaga, he said it was a highly specialised service that only a few companies in Malaysia could provide.

“There are other companies which provide these services. However, they currently service the private sector,” he said.

He believed that if Pharmaniaga’s financial problems were not resolved, the public health sector would face trouble providing medicines and drugs to patients across the country.

This was because other service providers would face trouble taking over from Pharmaniaga, as they had not invested or prepared themselves to complement or take over the role.

On Friday, Chan said that during the past three weeks, Pharmaniaga had sent letters of assurance to pharmaceutical companies, guaranteeing its operations would remain intact and that all financial obligations to stakeholders would be fulfilled.

However, she added that some pharmaceutical companies had not received payment for medications supplied. - FMT