Increase in Cost of Medicine

Mr Liang Eng Hwa asked the Minister for Health (a) whether the cost of medicines in Singapore has increased over the last three years and, if so, what are the reasons; and (b) whether the Government will consider improving the affordability of medicines in Singapore by closing the gap between the prices of medicines here and those in neighbouring countries.

Changes in the pricing of medications depend on several factors, such as whether they are patent protected, whether there are comparable alternatives, as well as the cost of development, production and distribution. Between countries, the prices of drugs may also differ significantly as suppliers take into account differences in market size, ability to pay, supply chain structure, competition and currency differences.

We are taking various steps to manage drug costs. First, we are aggregating drug demand and integrating supply chain management across the public healthcare sector through the Agency for Logistics Procurement and Supply (ALPS) to achieve better economies of scale and create greater negotiating leverage. ALPS is consolidating functions, such as purchasing, storage, packaging and dispensing, so as to lower the cost of managing our drug supply chain. ALPS will also progressively streamline their system and deploy technology to improve supply chain efficiencies.

Second, we are adopting value-based pricing approaches for drug purchases, especially for patented drugs. The Agency for Care Effectiveness (ACE) performs health technology assessment to evaluate the benefits of a drug. It then negotiates drug prices to levels commensurate with the benefits.

Third, we are making efforts to ensure the appropriate use of drugs. We encourage doctors to recommend or prescribe drugs where there is evidence that it is effective for the patients’ specific conditions, and to avoid prescribing drugs where benefits are unproven or unclear. Where a less costly generic alternative is just as effective, we encourage the use of the generic version. ACE publishes guidances to help doctor keep abreast of the latest clinical evidence. MOH also tracks generic vs branded drug utilisation patterns in our public healthcare institutions to encourage the use of generics where appropriate.

In addition, MOH regularly reviews the drugs we subsidise in the public healthcare sector to add those assessed to be clinically effective and cost effective. Over the last three years, about 40 additional drugs were listed for subsidy. Where they apply, MediSave and MediShield Life also help patients pay for their drug bill. For those who are unable to afford, there is MediFund and the Medication Assistance Fund that can be tapped on to help the patient pay for their drugs.