Shocking and detailed revelations have emerged on how companies linked to politicians close to the previous government control the supply of billions of ringgit worth of medical drugs to the government, giving them a monopoly that could have increased the cost of drugs supplied to government hospitals and clinics nationwide.
The 12-page dossier sighted by FMT, which was submitted to Health Minister Dzulkefly Ahmad today, confirmed his statement last week that pharmaceutical giant Pharmaniaga did not have a monopoly on the supply of drugs to his ministry as widely speculated.
Instead, the document listed 20 companies with links to prominent politicians, including former ministers who represent the top echelons of the Umno leadership.
The companies acted as “tendering agents” over a four-year period between 2013 and 2016, reaping contracts worth a total of RM3.7 billion.
The tendering agents, according to the document, acted for more than 70 pharmaceutical companies, all of whom used only the “same few official-owned tendering agents”.
“The reason is clear, and it is none other than corruption,” said the dossier.
A quick check by FMT revealed that the lion’s share of RM1.4 billion, or some 38%, went to a company owned by the uncle of a former minister and senior Wanita Umno politician.
Other personalities with ties to the companies include members of the royal family, a former high ranking Felda officer, a former ambassador to the US, a former official of the health ministry and a former minister who lost in the recent election.
It is understood that the supply of medicine to the government by international pharmaceutical companies is done through local subsidiaries through a tender process.
Explaining the process, the whistleblower said “tendering agents” are appointed by international pharmaceutical companies.
“International pharmaceutical companies collude with official-owned tendering agents to bid rig. By refusing to supply or deal to other resellers and tendering agents, international pharmaceutical companies grant official-owned tendering agents a monopoly, thus securing an automatic win in a tender,” said the whistleblower, whose identity is being withheld.
“Foreign companies cannot participate in a Malaysian government tender directly, but instead must go through a Malaysian distributor, reseller or tendering agent.
“When the health ministry puts out a procurement tender, international pharmaceutical companies will engage Bumiputera tendering agents to bid for the tender according to the tender specifications,” the dossier said.
The whistleblower explained that tendering agents are paid a percentage of commission based on every tender won, and earn clean profit since they do not handle marketing, logistics or distribution activities.
“From at least 2011 to the present, international pharmaceutical companies have been paying bribes to high ranking officials/politicians to assist in obtaining or retaining business in Malaysia in violation of the US Foreign Corrupt Practices Act (FCPA).
“These corrupt payments are concealed as commission payments to official-owned tendering agents,” it added.
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