THE Health Ministry (MOH) has exceeded its budget allocation by close to RM572 mil for the year 2023, primarily due to increased costs in procuring medicine and vaccines.
Health Minister Datuk Dr Dzulkefly Ahmad clarified that the ministry procures medication through three methods: central procurement managed directly by the ministry, procurement by concession holder Pharmaniaga Bhd via the approved products purchase list (APPL), and procurement by healthcare facilities through tender, with a limit of RM500,000.
“Pharmaceutical products that were taken out of the APPL following the expiration of the government’s concession contract with Pharmaniaga on June 30, 2023, saw an increase in prices of up to five times when purchased through tender.
“Whether purchased through central procurement or tender, these supplies experience an increase,” he said, adding that he had encountered instances where some products saw a 200% to 300% increase in prices.
Moreover, Dr Dzulkefly highlighted the financial strain in his address to the Dewan Rakyat during the winding-up speech of the supplementary supplies bill.
He noted that despite the agreement for Pharmaniaga to continue supplying medical supplies to the government for 10 years, the company faced financial distress and was classified under Practice Note 17 (PN17) after recording a substantial net loss.
Pharmaniaga Logistics Sdn Bhd, a subsidiary of Pharmaniaga, entered a seven-year concession agreement with MOH in January 2024 for the procurement, storage, supply, and delivery of medical products to public sector customers.
The agreement takes effect retrospectively from July 1, 2023, and will remain in force until June 30, 2030, or subject to earlier termination.
Furthermore, Dr Dzulkefly cited other factors contributing to the ministry’s overspending including adjustments to staff salaries to comply with the minimum wage revision and increased expenditure for hospital management such as cleaning and food services.
He also attributed the rise in patient referrals due to increased health screenings added to the financial burden. – March 20, 2024
Main photo credit: Bernama
