KUALA LUMPUR: The government may have to be open to the possibility of allowing other providers to supply and distribute medicines in the public health sector as it has proved too risky to depend on a single provider, said the Malaysian Medical Association (MAA).
“This of course will take time to implement. In the meantime, urgent steps are needed to secure [an] ample supply of medicines for public health care,” said MAA president Dr Muruga Raj Rajathurai in a statement.
The MAA also urged the government to take Pharmaniaga Bhd's financial problems more seriously as the situation may have a significant impact on the country's supply of public health medicines.
Pharmaniaga was granted a concession agreement to supply public health facilities with medicines and medical supplies by the Ministry of Health that is slated to expire in June this year.
According to its annual report, the pharmaceutical outfit, part of the Boustead Group, supplies more than 700 products in the Ministry of Health (MOH)'s Approved Product Purchase List (APPL) – comprising medicines and other medical items to government hospitals, institutions and clinics.
Pharmaniaga became an affected listed issuer under Practice Note 17 (PN17) on the basis that Paragraph 2.1(a) of PN17 has been triggered in the company's audited consolidated financial statements for the period ended Dec 31, 2022, which requires the group to come up with a regularisation plan to address its financial condition.
The pharmaceutical group announced its largest ever quarterly net loss of RM664.39 million, as a result of RM552.3 million of impairment of Covid-19 vaccines. Furthermore, it has written down the goodwill of the Indonesian manufacturing cash-generating units of RM50.3 million.
This was despite quarterly revenue expanded 21.2% to RM862.72 million from RM711.7 million a year earlier due to “healthy growth” across the group's concession, non-concession and Indonesian businesses as a result of strong demand from the customers subsequent to the resumption of normal business activities after the Covid-19 pandemic.
For the full FY2022, it sank into the red with a net loss of RM607.32 million versus a RM172.15 million net profit a year earlier, as revenue fell 27% to RM3.51 billion from RM4.81 billion.
Pharmaniaga's short term borrowings ballooned to RM968.27 million from RM570.05 million a year ago. Its long-term borrowings amounted to RM190.6 million versus RM285.17 million. Receivables meanwhile rose to RM351.66 million as at end-2022 from RM297.75 million a year ago. Its cash balance was at RM52.84 million, while its inventory dropped to RM767.26 million from RM1.26 billion a year ago after the impairment.
Muruga said: “We do not wish for any supplier to reduce or stop its supplies of medicines to Pharmaniaga for public health care facilities; however if the issue is prolonged, these suppliers may be left with no other option as they too may be running into losses if outstanding payments are not settled.
“The supply of essential medicines (medicines to treat emergency and acute cases) can be affected if such a scenario were to happen,” he said.
In addition, emergency cases and patients who depend on a continuous supply of medicines from the public health system will be among the most affected, he added.
Source : The Edge Markets