Committee of Supply debate: Ministry of Health

No profit margins on drugs sold in public hospitals: Gan

OFFSETTING COSTS AND OVERHEADS: Our public healthcare institutions are not-for-profit organisations. While the drug prices include a margin, this is to offset overheads and operations costs... They are not profit margins. - HEALTH MINISTER GAN KIM YO
OFFSETTING COSTS AND OVERHEADS: Our public healthcare institutions are not-for-profit organisations. While the drug prices include a margin, this is to offset overheads and operations costs... They are not profit margins. - HEALTH MINISTER GAN KIM YONG

Public healthcare institutions do not make a profit on the drugs they prescribe, said Health Minister Gan Kim Yong in Parliament yesterday.

"Our public healthcare institutions are not-for-profit organisations," he said. "While the drug prices include a margin, this is to offset overheads and operations costs... They are not profit margins.

"In fact, last year, we provided a total of $4.3 billion of funding to our public healthcare institutions to support their operations, to keep our healthcare costs low."

The issue was brought up by Mr Low Thia Khiang (Aljunied GRC), who said that some people still find medication expensive.

He asked for the profit margins of drugs sold in public hospitals, and questioned the effectiveness of measures taken to bring medication costs down, especially for those with chronic ailments.

"Based on feedback from residents, some Singaporeans still find the cost of medicine high," Mr Low said. "I believe this is partly due to doctors prescribing drugs for a long duration, or prescribing non-standard drugs."

Addressing the issue later, Mr Gan said the Agency for Care Effectiveness, which was set up to look for treatments with "good outcomes at affordable costs", will issue its first set of guidelines on drugs in May.

Minister of State for Health Lam Pin Min added that the agency will issue more guidelines in July on medications for Type 2 diabetes and how to manage pre-diabetes.

These will help patients and doctors make better choices on cost- effective medical treatment.

Dr Lam said the agency recently evaluated two classes of diabetes drugs. One was found to be "significantly more cost-effective".

The drug will be listed under the Medication Assistance Fund, and eligible patients can apply for financial support for it.

The fund helps people who need expensive non-standard drugs, said Mr Gan, adding that substantial subsidies are given for standard medication at public healthcare institutions.


Correction note: This story has been edited for clarity. The "significantly more cost-effective" diabetes drug is not listed under the Medication Assistance Fund yet. We apologise for the error. 

A version of this article appeared in the print edition of The Straits Times on March 10, 2017, with the headline 'No profit margins on drugs sold in public hospitals: Gan'. Print Edition | Subscribe