Pharmaniaga share price drops as Putrajaya reviews monopoly

KUALA LUMPUR: Pharmaniaga Bhd’s shares declined 2.48% this morning amid news that the government is reviewing all concession agreements for medical supplies.

This includes the 10-year contract awarded to Pharmaniaga, which will end this November, according to Health Minister Dr Dzulkefly Ahmad.

According to Bernama, Pharmaniaga’s shares have dropped since June 8 on concerns over the matter.

The company’s share price has reportedly dropped 30% this year.

Its highest traded share price was recorded on May 28 at RM4.52 and the lowest was on June 22 at RM3.22.

As of 11.15am today, Pharmaniaga’s share price fell eight sen to RM3.15 with 33,400 shares changing hands.

In an interview with The Malaysian Reserve, Dzulkefly had said the move to review all existing medical supplies concession agreements to government hospitals was to optimise the supply chain and ensure “a win-win” situation for all parties involved.

“The contracts, all of them, are being reviewed in efforts to achieve supply chain optimisation and to get better value. The government is committed to achieving this,” he told the business daily.

Earlier this month, Pharmaniaga’s role in the public healthcare system came under scrutiny with think tank Galen Centre for Health and Social Policy saying the government-linked company was essentially acting 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.

However, Dzulkefly said it was inaccurate to say that Pharmaniaga had a monopoly as there were also other vendors supplying directly to ministry health facilities.

He also 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.