Interesting developments at Pharmaniaga Bhd, which through a subsidiary was awarded a lucrative concession to manufacture, purchase, store and distribute pharmaceutical and medical products to government hospitals.
The concession to privatise the Government Medical Store was originally awarded in 1994 to a subsidiary of United Engineers (M) Bhd known as Remedi Pharmaceuticals (M) Sdn Bhd. Medicine prices soared after the privatisation.
Remedi became a subsidiary of Pharmaniaga Berhad in 1999 and was then known as Pharmaniaga Logistics Sdn Bhd.
Last December, Pharmaniaga Bhd revealed that the Public Private Partnership Unit of the Prime Minister’s Department had awarded Pharmaniaga Logistics Sdn Bhd a 10-year extension on its concession. The Privatisation Committee of the PPP Unit would negotiate the new terms and conditions of the privatisation concesion and then propose the outcome to the government for further consideration.
On 3 March 2010, however, the firm dropped a bombshell when it revealed that the Pharmaceutical Services Division of the Health Ministry, following a routine audit, had revoked the manufacturing licence of Pharmaniaga Manufacturing Berhad effective 1 March 2010.
When queried by Bursa, Pharmaniaga said the audit, conducted on 2-4 February 2010, revealed critical findings in the following areas:
- Storage and segregation of reject and quarantine materials/products
- Handling of reject/recall (material/products)
- Certain aspects of premises and equipment
Could we have more details please especially as this involves medicines?
Pharmaniaga said it would present all corrective actions taken to date as well as a plan of action to address the remaining audit issues to the Health Ministry on 8 March 2010. “With that, we plan to seek PSD’s approval to conduct a follow up audit on the plant.”
Pharmaniaga Manufacturing Berhad contributed 12.8 per cent of the Pharma Group’s turnover and a sizeable 47.4 per cent of its profit before tax in 2008. Pharmaniaga Bhd posted a profit before tax of RM90.6 million on the back of turnover of RM1.3 billion in 2008.
Meanwhile, on 29 December, Bursa Securities rejected Pharmaniaga’s application for a further extension of time to comply with the public spread requirement (minimum 25 per cent). Bursa ordered Pharmaniaga to rectify the shortfall in the spread within three months from 29 December 2009, failing which enforcement action could be taken against Pharmaniaga.
As at 29 November 2009, Pharmaniaga Bhd’s public shareholding spread stood at 13 per cent, with the remainder held by UEM Group Bhd, which comes under Khazanah.
This non-compliance with the public spread requirement has been a problem for the last few years. It now means that a placement would probably have to be made to comply with the requirement by the end of March.
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Dear All Gerakan K says: “As long as the patients in General Hospital still pay RM1 for a bag of medicine, nobody should care about the actual cost of these medicine.” There is no such thing as a free lunch. Someone (we, the Malaysian tax payers) has to pay for the difference between the cost to the Ministry of Health charged by Pharmaniaga and the heavily subsidised cost payable by the patient at the General Hospita. I’m sure that many progressive Malaysian tax payers do not mind subsidising the medical costs of the poor, but we certainly object to corporations… Read more »
Gerakan K,
Where are you?
Simply love your !Malaysia comments.
This is what happens when the UMNO Govt…I wont call it the BN Govt. moves to make its cronies rich.
Contracts given to unqualified people in the name of NEP!!!
At least no one die because of using medicine from hospital due to the defection in the medicine itself. Show me the incidence if you can find it otherwise.
p/s: because I’m pro-BN (by this blog cheerleaders standard), then this blog owner deliberately publishes my comment very late. Independent news “konon”. Ceh !
Gerakan K, Come on la bro, hey do not be rude in our comments ok? Be a gentleman and refrain from insulting or calling people names. You have not so far, but, let us be polite and respect each other. It is difference in views only. Continue to voice your opinions as you can see you have a good following here, and without you commenting people miss you. No, I absolutely disagree with you that your comments are released late, mine are posted much later, because of my lengthy comments, partly because need to explain in detail to you. Cheer… Read more »
Devan,
You are also a fan of Gerakan K? Good. Honestly, his comments are from the other school of thought and sometimes he intentionally comment in such a way to provoke response! Yes, he is so humorous and sometimes when bored, I do read through his comments and laugh at his creativity!
Cheers bro!
Why are you always so late one, Anil? Because of the concession to that Indian guy, all Malaysians lost the right to tune into all the other birds on the sky, except the one operated by Astro, at least until the year 2020 ! Because of the concession to the umnoputras, we have to pay TOLL on roads our tax money built ! Because of the concession to yet another group of umnoputras, each and every vehicle used by the government has to be leased from ONE company, and ONE COMPANY ALONE ! Because of the concession to yet yet… Read more »
The privatisation of the Government Medical Store and the effect it had on medicine/drug prices was highlighted in Aliran Monthly soon after it took place in the mid-1990s. Unfortunately, there were no blogs/websites back then to bring the issue to a wider audience.
Old story and one that becomes untouchable becos UMNOPutras are involved. Same for Proton parts manufacturers…. everyone knows about it but nothing gets done.
This reminds me of a mobile operator. Do you know someone get 1 cent out of every call as royalty? The guy (allegedly) got the license for the mobile service courtesy of Dr. M. He then sold it to another company who owne the operator.
I assume some is (allegedly) getting some sens out of every pill(?)
These are dirty filthy rent seeker
while the operation has been shut down due to serious quality and safety(of products) violations, it is incumbent of the vendor to issue a recall of tainted medicines (if any). segregation of defective material is vital that they will not end up as good material. from what you wrote, it seems that good manufacturing practices are not being followed or do not exist. is the company iso 9001 and iso 14001 compliant at the minimum?
Peter, GMP or not, there are just too many loopholes during the process of product registrations! You know, product registration is now done online, as far as you operate and account with MOH, you can even register your products from Zimbabwe! Laws to protect consumers are good, but, is there enforcement? Now registrations are simplified to such an extent that you get your NOT numbers out in a matter of days! Previously it was MAL! While speedier deliveries are good for business, the sad fact is, are there random checks conducted by MOH? Just look at the number of products… Read more »
This is normal as in any concession. Give a concession and the cost inflates, they have monopoly, supply substandard products and pay many times the price.
So what is new. Compare the hospital expenditure of the last 30 years and you will see the many many multiples in growth of expenditure.
The will sell us out completely in the name of privatization…Pathetic
As long as the patients in General Hospital still pay RM1 for a bag of medicine, nobody should care about the actual cost of these medicine. This is one of the reason low income people support BN government.