The government’s decision to extend Pharmaniaga Bhd’s concession to supply and distribute drugs to government hospitals and clinics nationwide for another 25 months received positive reactions from the stock market, as well as analysts.

Although it is for a short-term period of time just to avoid disruption in distribution, it is a positively surprised” reprieve for the company, says Kenanga Research in a recent note.

Pharmaniaga is the concessionaire to purchase, store and supply, and distribute at least 700 pharmaceutical products on the Approved Product Purchase List. Its concession will end on Nov 30.

However until the open tender system comes into effect, it will remain a question whether other industry players will be capable of providing or do what Pharmaniaga is doing which is backed by years of experience, wide distribution network and storage facilities nationwide.

The Star in a news report on Oct 31 quoted Health Minister Datuk Seri Dr Dzulkefly Ahmad as saying the government had agreed to conduct an open tender for a new concessionaire with the successful bidder offered a five-year contract.

He said that through this open tender, everyone will be allowed to bid for the contract, including Pharmaniaga. Contracts will be awarded to the most qualified company with Pharmaniaga expected to be a very competitive player.