by Foong Swee Fong
Yet another piece of propaganda by the Straits Times.
This time, a clumsy attempt by the Senior Health Correspondent, Salma Khalik, to convince Singaporeans that the state purchases drugs from pharmaceutical giants from a “position of strength”.
The gist of the article is that in the past, Singapore was a “dream market” for pharmaceutical giants, that we were “passive price takers, paying whatever price” they charged.
But after the Agency for Care Effectiveness (ACE) was set in 2015, which headhunted Mr Ng Kwong Hoe to head its health technology assessment department and built up expertise in assessing the “relative value of new drugs”, we could “bargain from a position of strength”, thus saving the country S$400m.
Instead of feeling grateful, readers should be concerned that pharmaceutical companies had complete bargaining power over us and that prior to 2015, we were buying drugs without knowing the “relative value of the drug”.
I get the impression that people in the department responsible for purchasing drugs regarded money as just digits on their computer screen to be debited, so long as the drugs were purchased and within a budget, which is not insubstantial.
In the article, Salma claims that S$400m has been saved since 2015, but given that the annual healthcare budget is in the tens of billions of dollars in the last few years, $400m is actually a drop in the ocean.
Is ACE really able to “bargain from a position of strength”? Or is it just a vain attempt at token resistance at best, or a charade to fool unsuspecting folks at worst?
A Straits Times forum writer, Alban Kang, perhaps being in the pharmaceutical trade and thus is familiar with the technicalities of the business, urge the authorities to revamp the “patent linkage system” because it protects patent holders by preventing generic drugs from being marketed here.
He also notes that process patents (I would qualify some process patents), such as methods of producing chemical ingredients for a medicine, are enforced here but not in other countries, thus creating more patents and therefore, price protection for more drugs.
The net effect in both instances is that Singaporeans are forced to pay more for drugs.
Unlike ACE, Mr Kang is truly attacking the root cause of high prices of drugs here — rules stipulated in the numerous Free Trade Agreements (FTAs) signed with other countries, especially the United States, that enhances the monopolistic powers of foreign pharmaceutical companies here.
As a member of the World Trade Organization (WTO), we are obligated to follow a minimum set of rules to protect Intellectual Property Rights (IPR), so that innovation will be encouraged.
However our government, in striving to make Singapore an intellectual property hub and a bio-technology cum pharmaceutical hub, has compelled Singaporeans to not only adhere strictly to the IPR rules of the WTO, but also the numerous rules beyond the requirements of the WTO which it has agreed to in the FTAs, especially the US-Singapore FTA, that while enhances the monopolistic powers of pharmaceutical companies thus incentivizing them to invest here, has severely penalized Singaporeans as they have to pay much higher prices for drugs than consumers in many other countries.
The “patent linkage system” that Mr Kang asks to be revamped is not required by WTO, but is stipulated in the US-Singapore FTA. In the same year that the FTA came into force (2004), the Singapore Medicines Act was amended to fulfill our obligation under the FTA.
There are numerous other rules our government has committed with other countries via the FTAs it has signed and imposed on us. These rules confer monopolistic powers on foreign pharmaceutical giants. We thus have to pay “whatever price” they charge and there is nothing that ACE can do, except go through the charade that we can “negotiate from a position of strength with pharmaceutical giants”.
This opinion piece was first published on Mr Foong’s Facebook page and reproduced with permission.