Extension for Pharmaniaga leaves health system vulnerable, says think tank

 

Galen Centre said healthy competition can help Pharmaniaga improve, instead of taking things for granted.

PETALING JAYA: Putrajaya’s extension of Pharmaniaga Bhd’s concession for the next decade leaves the country’s health system “vulnerable, at risk and heavily dependent” on a single government-linked company (GLC), says Galen Centre for Health and Social Policy.

In a statement today, the health think tank said this was a blow to healthcare reforms, as it granted a single company monopoly instead of allowing healthy competition and diversity of choice.

It said the government’s practice of exclusive concessions also allows individual companies, such as Pharmaniaga and other GLCs, to have a dominant grip and major influence over large portions of the healthcare system, including hospital services.

This has created an unhealthy over-dependence in the belief that these companies will be considered indispensable and “too big to fail”, he said.

Azrul Khalib.

“This decision confirms that perception,” said the think tank’s founder and CEO Azrul Khalib.

He said the extension will also send a signal to pharmaceutical players that it is pointless to build, invest and grow their businesses, seeing that Pharmaniaga has the government’s monopoly for the next 10 years.

Furthermore, Azrul said the concession extension was a “poor business practice” that maintained the existence of middlemen, which unnecessarily increases the cost of medicines.

He said allowing suppliers to negotiate and bid directly with the government could potentially enable millions in public funds to be saved, lower prices, increase cost-effectiveness and enable newer therapies to be made available for patients.

Yesterday, health minister Dr Zaliha Mustafa announced that Pharmaniaga had been granted a conditional agreement to continue providing medical supplies to the government.

This is despite the fact that Bursa Malaysia has included Pharmaniaga under its Practice Note 17 classification, which denotes a financially-distressed company.

Azrul added that the auditor-general has also found that Pharmaniaga had provided faulty ventilators to the health ministry during a public health emergency, threatening many lives.

He said it was disappointing and baffling to reward a company that had made problematic business decisions regarding Covid-19 vaccines, costing more than half a billion ringgit.

“Will this be the approach whenever this GLC runs into financial trouble?”

Azrul also said allowing for healthy competition will force Pharmaniaga to improve instead of taking things for granted if it continues to dominate the market through a monopoly. - FMT