MOH renews Pharmaniaga contract despite PN17 status

 

PARLIAMENT | The Health Ministry renewed Pharmaniaga Logistics Sdn Bhd’s (PLSB) contract to manage its supply chain and medical product logistics because of its “excellent” past performance.

Health Minister Dr Zaliha Mustafa told the Dewan Rakyat that PLSB had fulfilled all its obligations in its previous concession, which include fulfilling 98 percent of its KPI for fulfilling orders within seven working days in Peninsular Malaysia and 10 working days in Sabah and Sarawak.

“Based on PLSB’s performance, the government has agreed to a new concession - the Medical Supplies Logistics Service Concession - for 10 years to manage the supply chain and medical logistics for Health Ministry facilities.

“Experience and expertise are crucial elements in ensuring the smooth supply of medical products for Health Ministry facilities,” said Zaliha.

She described PLSB’s performance as “cemerlang” (excellent) and on par with international logistics companies such as DKSH and Zuellig Pharma.

“PLSB has succeeded in building its own logistics network comprising bumiputera and domestic entrepreneurs throughout Malaysia. They also have a cold chain logistics capacity,” she said.

Health Minister Dr Zaliha Mustafa

Zaliha said this in a written reply to Tan Hong Pin (Pakatan Harapan-Bakri) who urged the government to state if Pharmaniaga’s monopoly in supplying medical products to Health Ministry facilities will be broken.

Tan said this was in view of Pharmaniaga Bhd - the parent company - being classified as a PN17 company after reporting a net loss of RM664.39 million in the fourth quarter ending Dec 31, 2022.

Bursa Malaysia classifies companies as Practice Note 17 (PN17) if the company is in financial distress. Such companies will need to submit a proposal to restructure and revive the company in order to maintain its listing status.

Pharmaniaga Bhd's largest shareholder is Boustead Holdings Berhad (52 percent) which in turn is owned by the Armed Forces Fund Board (LTAT), a statutory body that manages the pension fund for the Malaysian Armed Forces.

Zaliha said the PN17 note does not affect the operations of its subsidiaries.

“The PN17 status is due to financial allocations for slow-moving stock (such as) the Covid-19 vaccines. It does not affect the operations of its subsidiaries in handling logistics and distribution of medication to Health Ministry facilities.

“Moreover, Pharmaniaga Bhd is owned directly and indirectly by the LTAT under the Defence Ministry,” she said.

In February, the Auditor-General's Report 2021 revealed that 108 of 136 ventilators procured through PLSB in 2020 were deemed unusable.

This resulted in a loss of RM13 million for the government.

The cabinet had approved the procurement of 500 ventilators under emergency protocols - where no procurement agreement was signed - due to the onset of the Covid-19 pandemic.

However, only 136 were delivered, of which, only 28 were deemed safe for use. - Mkini