The Ministry of Health (MOH) has published the first lot of drug "guidances" to help doctors and patients pick cost-effective, proven or superior drugs, with information on drug subsidies if any.

Of the 11 drugs for which guidances were issued by the Agency for Care Effectiveness (Ace) yesterday, nine have subsidies that will cost the government millions of dollars a year.

This first tranche includes drugs to treat cancer, diabetes and stunted growth in children.

It is called guidance because it includes not just advice on the use of the drug, but also why it is of good value, whether subsidies are available and the cost to the Government, among other things.

Each year, public-sector doctors request subsidies for 40 to 50 drugs. About half end up subsidised, with no explanations on how the decision is made. For the first time, the M

OH is sharing its decision- making process.

Dr Daphne Khoo, executive director of Ace and an endocrinologist by training, said the team looks at the long-term value of the drug and assesses whether it is superior to what is being used and how much more it costs for the extra benefit it gives.

"It's not about whether it is expensive or cheap, but rather the value of the drug," she said, explaining that cost is relative to the drug providing "a year of good perfect health".

Dr Khoo said it is difficult for doctors to keep up with all the new drugs available and to know if they are indeed better.

For instance, Ace looked at rivaroxaban, a blood thinner, and decided that it would provide value only at a certain price. There are three different brands, but doctors say they work the same.

The team approached the pharmaceutical companies and chose the one that agreed to reduce its price. In this case, the team also went a step further and set a cap of $3.08 for rivaroxaban sold in the public sector.

Public hospitals were previously charging $4.40 to $5.70 for a day's supply. Means-tested patients get a 50 per cent or 75 per cent subsidy under the Medication Assistance Fund.

The MOH hopes that by sharing information on drugs that give value, it can slow spiralling healthcare costs while providing patients with more effective medicine.

In developed countries, it is estimated that $1 out of $3 spent on healthcare is wasted, such as on drugs that do not give value for money or are not really effective.

The decision on whether to provide a subsidy, and how much, is made by the Drug Advisory Committee, comprising various specialists, based on Ace's assessment on the value of the drugs.

Associate Professor Benjamin Ong, MOH's director of medical services, said: "While medical technology has enabled us to live longer and better, such improvements have almost always resulted in rising healthcare costs.

"Ace's work is critical to enable the identification of treatments with good outcomes at affordable prices for our patients. This will help ensure that our healthcare system remains both effective as well as sustainable for future generations."

The next lot of guidances will be out in October. Ace, set up in 2015, expects to release three lots of drug guidances a year.

Dr Stanley Liew, a diabetic specialist from Raffles Hospital, welcomed the guidance. He said: "This framework of critical appraisal of new health technologies is accountable, transparent and evidence based."

Roche, whose targeted breast cancer drug Herceptin is now subsidised, hailed the decision, saying that one in four breast cancer patients here can be treated with this drug.

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