Minister: Azmin to lead taskforce on pharmaceutical monopoly

Health Minister Dzulkefly Ahmad addresses a press conference at the Ministry of Health in Putrajaya June 20, 2018. — Picture by Mukhriz Hazim
Health Minister Dzulkefly Ahmad addresses a press conference at the Ministry of Health in Putrajaya June 20, 2018. — Picture by Mukhriz Hazim

PUTRAJAYA, June 20 — Economic Affairs Minister Datuk Seri Azmin Ali will be leading a special taskforce to study the alleged monopoly of drug supplies for public hospitals, Health Minister Dzulkefly Ahmad said today.

The taskforce will be made up of the Health Ministry, the Economic Affairs Ministry, the Transport Ministry, as well as the Agriculture Ministry.

“I want to say firstly, when the matter was discussed, this monopoly issue was not only raised by my ministry, the Health Ministry, but also the Agriculture and Transport Ministries.

“In short, the Cabinet, the prime minister has formed a taskforce, led by the economic affairs minister, with members from the ministries I mentioned — health, agriculture and transport,” Dzulkefly told a press conference here.

He said that an overall study will be conducted on drug acquisition and monopoly policies to devise the best practices, so as to avoid unnecessary additional costs in the process.

Dzulkefly, however, admitted that the matter will not be an easy task, as the taskforce would also have to deal with the issue of Bumiputera allocations.

“This is currently being studied and I can’t give any early information. Just that we will study both the overall good and bad effects, and will formulate a policy with regards to this monopoly issue or concession issue,” he added.

Dzulkefly said that there are three ways to secure drug supplies: Open tender, direct negotiation and a concession agreement.

On June 13, documents mailed by a whistleblower to Dzulkefly and other parties alleged that bid-rigging of the open tender process of medical supplies had taken place between 2013 and 2016 — allowing the supply to be effectively monopolised.

The documents claimed that the total medicine tender awards amounting to RM3.7 billion had been controlled by six main tendering agents.

It also claimed that contracts were granted to companies close to or owned by politicians, high-ranking government officials and their families.

Local daily The Star yesterday reported that companies looking to supply medicine to the government would take turns to bid and limit competition, quoting the anonymous whistleblower who had exposed an alleged supply cartel raking in billions in commissions.

Disputing tendering agents’ claim that the practice was because the firms could not afford the guarantee letters, the person insisted that the firms engaged in the behaviour to maximise their profits, according to a report in The Star.

Last week, the same newspaper reported tendering agents as claiming that few firms could afford to accompany their bids with a bank guarantee for 5 per cent of the contract value.

The deposit is required as a safeguard against a firm’s failure to deliver.