Parti Sosialis Malaysia chairman Dr Michael Jeyakumar Devaraj said putting drug production into government hands, as before, could reduce expenditure on buying medicines.

The health ministry’s medical laboratory and store formerly produced generic drugs for government hospitals. However, it was privatised under a concession agreement with a private company that became Pharmaniaga.

Jeyakumar told FMT that a privatised entity for medical procurement would work to maximise profits. “So the cost of medicines is likely to be 10% to 20% more expensive”, as private companies had to look out for their shareholders.

“The government can streamline our drug procurement to go for cheaper but better quality generic drugs,”said Jeyekumar, a doctor by training who was MP for Sungai Siput for two terms.

Jeyakumar said Pharmaniaga’s current low share price gave the government a good opportunity to buy up the company.

Pharmaniaga’s stock price has dropped from 44 sen to as little as 22 sen after the company was placed on the PN17 classification by the stock exchange in February, denoting it was in a state of financial distress.

The company recorded a net loss of RM664.39 million in the fourth quarter of the 2022 financial year, with a provision for RM552 million to account for unsold stock of Covid-19 vaccines.

Pharmaniaga is the concession holder for the provision of medicines and medical supplies to government hospitals and clinics and is responsible for obtaining more than a third, or over 700 of the government’s branded and generic drugs supply.

Former deputy health minister Dr Lee Boon Chye said the remaining two thirds of drug supplies came from companies such as Zuellig Pharma Sdn Bhd and DKSH (M) Sdn Bhd.

He said Pharmaniaga’s concession agreement was set to end in June and it was up to the government to decide whether to extend it or open it up to other vendors.