Singapore no longer a price taker in the drug market

The Agency for Care Effectiveness has helped Singapore reduce overpayment and save over $400 million. The Straits Times looks at what the agency does.

S'pore used to pay whatever price drug companies asked for, but not any more

Till recently, Singapore was a dream market for pharmaceutical companies.

They quoted a price for their drugs and the Republic paid it.

Singapore did not have a mechanism to assess the relative value and real benefits of new drugs, in order to negotiate for a fair price before subsidising a drug. Nor did it have a "positive list" of drugs for MediShield Life coverage - to reflect treatments the country allows and the prices it is willing to pay for them.

All this changed in 2015, when the Agency for Care Effectiveness (ACE) was set up.

Since then, the Republic has saved more than $400 million by reducing overpayment for drugs.


Not all newly approved drugs provide real benefits to patients

The Agency for Care Effectiveness (ACE) is not just assessing the relative merit of drugs, but also doing its bit to stop insurance premiums from spiking out of reach.

It was in the limelight recently for its Cancer Drug List (CDL). From September 2022, MediShield Life and MediSave stopped covering treatments not on the list.

Integrated Shield Plans, too, will not be able to cover treatments outside the CDL from April 2023.

Cancer spending has more than doubled over the past five years - from $110 million to $275 million, said Health Minister Ong Ye Kung recently to explain the need for a CDL.

He said that if nothing was done, insurance premiums could soar to a point where many people who need coverage would no longer be able to afford it.


Agency for Care Effectiveness staff was offered triple her salary - but turned it down

A pharmaceutical giant offered her twice her salary plus a sign-on bonus equal to her pay cheque for one year - the total remuneration in her first year of work there would be triple what she was getting. She turned it down.

She and her colleagues at the Agency for Care Effectiveness (ACE) are highly sought after by the industry for their technical knowledge and any insider information they may have - which the companies hope might help them get their drugs approved faster, or accepted at a higher price.

With offers of a 50 to 200 per cent increase over their salaries, it is not surprising that some ACE employees have left for greener pastures. What is surprising is the number who have turned down such lucrative offers and have stayed with the agency.

Ms Fiona Pearce, who turned down the offer that would have multiplied her salary, has also rejected other offers she received in her five years with ACE.


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