Agents have bidding cartel for drug supply contracts, source claims

A 12-page report detailing rent-seeking in drug supply contracts to the government was submitted to the Health Ministry last week. — AFP pic
A 12-page report detailing rent-seeking in drug supply contracts to the government was submitted to the Health Ministry last week. — AFP pic

KUALA LUMPUR, June 19 — Companies looking to supply medicine to the government would take turns to bid and limit competition, according to the person who 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 engage in the behaviour to maximise their profits, according to a report in The Star.

“This is a form of bid rigging known as bid rotation. With the help of international pharmaceutical companies, these tendering agents do not compete against each other and instead take turns to be a single bidder,” the source was quoted saying.

The person revealed a list showing that the firms registered bids for multiple albeit smaller supply contracts, including one tender request that had over 30 bidders.

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.

Prior to that, a 12-page report detailing rent-seeking in drug supply contracts to the government was submitted to the Health Ministry.

The report alleged that a handful of firms pocketed nearly RM4 billion from 2013 to 2016 through the alleged collusion.

The document claimed contracts were granted to companies close to or owned by politicians, high ranking government officials, and their family members.

The Health Ministry has welcomed investigations to be conducted by the Malaysian Anti-Corruption Commission, while others have also urged the Malaysian Competition Commission to probe further into the apparent bid rigging.

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