Pharmaniaga’s financial woes spark concern over medicine supplies
Published on: Friday, March 24, 2023
By:
FMT, Ainin Wan Salleh
Pharmaceutical Association of Malaysia executive director Chan Li Jin says some pharmaceutical companies have yet to receive payment for the supply of their medicine.
PETALING JAYA: The main association representing pharmaceutical companies in Malaysia has sounded the alarm over Pharmaniaga Bhd’s financial woes, saying it could affect patients’ access to medicines if not quickly resolved.
Pharmaceutical Association of Malaysia (PhAMA) executive director Chan Li Jin said Pharmaniaga’s Practice Note 17 (PN17) classification for financially distressed companies had led to “uncertainty and anxiety” among medicine suppliers.
ADVERTISEMENT Pharmaniaga is the concession holder for the provision of medicines and medical supplies to government hospitals and clinics.
It is responsible for obtaining more than a third, or over 700 of the government’s branded and generic drug supply, as well as for the logistics and distribution of these medicines.
Chan said Pharmaniaga’s financial situation had created unease over Pharmaniaga’s ability to pay pharmaceutical companies for their medicines despite the company’s assurances.
She said in the past three weeks, Pharmaniaga sent letters of assurance to pharmaceutical companies, guaranteeing its operations would remain intact and that all financial obligations to stakeholders would be fulfilled.
ADVERTISEMENT However, some pharmaceutical companies have not received payment for medications supplied, she said.
“In normal circumstances, supplies would be temporarily stopped until payment has been cleared,” Chan told FMT.
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“However, pharmaceutical companies are continuing to supply their medicines out of a sense of responsibility for patients’ lives and their health condition, as some are life-saving medicines.
“Still, the uncertainty is unsettling because of the large volumes (of medicine supply) involved,” she said, adding the situation could lead to patients waiting up to several months for their medication if the situation prolonged.
To resolve this, Chan has called for an open dialogue between Pharmaniaga and key stakeholders, including the finance and health ministries.
On Feb 27, Pharmaniaga announced that it had fallen under the PN17 classification after it recorded its largest quarterly net loss of RM664.39 million in the fourth quarter ending Dec 31, 2022.
The pharmaceutical group also said it had taken a RM552.3 million impairment on unsold Covid-19 vaccines and also written down the goodwill of its Indonesian manufacturing cash-generating units of RM50.3 million.
The announcement saw its share price plummet 50% from 44 sen to a low of 22 sen. As of 2pm today, Pharmaniaga’s share price stood at 30 sen.
Pharmaniaga had given assurances that it was committed to working out a regularisation plan to strengthen the group’s financial standing and ensure the viability of its core business activities.
FMT has reached out to Pharmaniaga for comment.
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