Multiple Sourcing for Drugs, Consumables and Laboratory Services for Competitive Pricing in Public Hospitals

Mr Zhulkarnain Abdul Rahim asked the Coordinating Minister for Social Policies and Minister for Health (a) whether public hospitals practise multiple sourcing for drugs, consumables and laboratory services to ensure competitive pricing; and (b) whether the Ministry will mandate a systematic productivity extraction factor, for example of 1% to 2% annually, so that efficiency gains are passed on to patients and policyholders rather than fully absorbed into rising charges.

The Ministry of Health (MOH) has set up the Agency of Logistics and Procurement Services to aggregate procurement amongst public health institutions where practicable. Our procurement processes also enhance supply resiliency through contracts with multiple suppliers.

Productivity extraction is generally not practiced in the healthcare industry internationally. Since 2023, we have shifted to capitation funding for our public healthcare clusters. This imposes stronger discipline on public healthcare expenditure by incentivising clusters to maximise value, through both productivity gains and investments in preventive health and population health. MOH will continue to monitor the public healthcare expenditure and overall bill sizes to ensure that healthcare remains affordable for Singaporeans.