Health ministry to set up task force on medical purchases

Health Minister Dr Dzulkefly Ahmad says his ministry is reviewing the issue to achieve better transparency and save costs in procurement.

KUALA LUMPUR: Health Minister Dr Dzulkefly Ahmad today said a task force would be set up to study procurement practices by the ministry following feedback from the public.

He said the health ministry was reviewing the end-to-end supply chain economics as well as demand and supply issues to achieve better transparency, cost savings and efficiency in the procurement of medicines and consumables.

“A more competitive mechanism that is fair and equitable to all suppliers and manufacturers needs to be devised to serve the best interests of the patients and the rakyat. This mechanism is to ensure more affordable medicines for the rakyat,” he said in a statement.

Dzulkefly was responding to issues raised in a report by FMT dated June 6 titled “Review Pharmaniaga’s role, think tank urges government”.

Galen Centre for Health and Social Policy had called on the ministry to review the role of Pharmaniaga in the public healthcare system, saying the government-linked company essentially acted as a middleman.

“Pharmaniaga is the sole concession holder to purchase, store, supply and distribute both branded and generic approved drugs and medical products to 148 government hospitals and 2,871 clinics and district health offices nationwide,” Galen CEO Azrul Mohd Khalib had told FMT.

“It is time that the ministry deals directly with pharmaceutical companies rather than depend on a middleman,” Azrul said, adding that this would save millions of ringgit.

Pharmaniaga has a 10-year concession agreement which ends this year.

Dzulkefly said in 2017, the ministry’s expenditure on medicines and consumable items was around RM3.3 billion. About 33.4% (RM1.1 billion) of pharmaceutical spending was from the concessionaire company, while 66.6% (RM2.2 billion) was from purchases by its health facilities such as hospitals and clinics, through central contracts or quotations.

He said it was therefore inaccurate to say that Pharmaniaga had a monopoly as there were also other vendors supplying directly to all ministry health facilities

He said the sourcing of pharmaceutical products was done through a tendering process which included product and technical specifications by the Pharmaceutical Services Division of the ministry and selection of products by the ministry’s procurement board.

“Pharmaniaga’s role in the tendering process is limited to managing advertisement for the bidding process. The selection processes of products are managed by the health ministry. As a result of the tendering process, 89 other suppliers were selected in 2017,” he said.

He added that there was a strict system in place to monitor standards, including product quality and whether medication ordered by public health facilities was delivered within seven working days, including to remote areas in Sabah and Sarawak.

“Nevertheless, such huge chunks of supplies coming through the opaque direct-negotiation mechanism of concession agreements with Pharmaniaga and other similar concessions for hospital services are a huge cause for concern to the public.

“Under the new mandate from the rakyat for the new government, the health ministry is committed to providing more transparency in these contracts while being just and fair to all market suppliers through greater opportunities and competitive bids,” he said.

Review Pharmaniaga’s role, think tank urges government