Crony Middleman Screws Patients

Concessionaire companies may be getting rich at the expense of quality government health care. A sales representative for a pharmaceutical company claims that Putrajaya can improve hospital services by using the millions of ringgit it will save if it does away with the middlemen.

Speaking on condition of anonymity, he said foreign pharmaceutical companies like his had told the government it could save money if it were to scrap its policy of buying drugs through middleman agencies.

“We asked if we could deal directly with the hospitals in order to keep prices low, but they do not allow this,” he said. “We have to go through the middleman Bumiputera agencies. This is the Malaysian policy for all foreign pharmaceutical companies. There is no way around it.”

He alleged that these go-between agencies knew little about the products they were selling and didn’t even consult experts at hospitals.

“They are like silent partners working as middlemen,” he said. “I have to do the work, but I still have to go through them.”

According to him, these agencies make between 2% and 5% in commissions “for doing nothing”.

“The percentage may seem small, but when a bulk order is in the millions, they make huge profits.”

Health Minister S Subramaniam has defended the policy of going through such agencies.

“They are the logistics companies for drug distribution,” he said recently. “We have nearly 145 hospitals, about 1,400 big clinics and 3,000 small clinics. The logistic work is actually massive. They get a certain commission on the amount they supply, which is the cost of their logistics.”

He said these companies were necessary to the operations of hospitals and clinics. “If it is a small (foreign pharmaceutical) company that supplies one product, you cannot expect this company to go all over Sabah and Sarawak to supply the medication.”

Subramaniam said these entities existed in many countries, but the salesman disagreed.

“These entities don’t exist in other countries,” he said. “My Indonesian colleague has never heard of concessionaire companies that supply drugs.”

He said the issue needed to be addressed if the healthcare situation in the country was to change.

The increases in the cost of living and the burden of the goods and services tax were causing many patients to switch from private to government healthcare. The salesman also alleged that private hospitals were “marking up prices to very high levels, especially when you use your insurance.”

He said many patients had seen their insurance covers “go bust”.

He spoke of selling supplementary nutrition for RM125 a bag to one private medical centre. The centre charged its patients RM1,000 a bag, he added. He also said it was unfortunate that the government was reducing its funding of public hospitals while the patient population continued to rise.

“Every year, the ageing population increases, so it’s only natural that patient load is going to increase,” he said. “But we have noticed decreases in funds for government hospitals over the years. I estimate that each year, funds decrease anywhere from 10% to 30%.

Commenting on a report about the rise in the use of generic drugs in government hospitals, he said these could be three times cheaper than branded drugs.

“For example, a cholesterol drug could cost RM5, but a generic version of it could cost less than RM1.”