Yes, that is true – Singaporeans, in many cases, do have to pay more for their brand name vs generics drugs compared to other countries in the region, like Malaysia. The savings could range from 30% to even 50%. To be clear, these are not fakes or generics but the exact same drugs marketed by the same global pharmaceutical companies. If you are taking such drugs for chronic conditions like high blood pressure or diabetes, the savings over a year can be quite substantial. So why are Singaporean “punished” with higher drug prices? Here are some of the possible reasons.
- First, it’s not just happening in Singapore but is a real issue in developed economies especially the USA (where many of the drugs are made). Drug companies have to invest hundreds of millions or even more than a billion dollar to bring a new drug to market. As a business, it is motivated to recover its massive investment — and that means selling their newly discovered drug for as much as the market is willing to pay — while the drug is still enjoying patent protection. Singapore as a first world country falls into the category of customers that are willing and able to pay more! The differentiated pricing by the drug makers based on country-of-purchase is likely the main reason for the higher prices in Singapore.
- The Health Science Authority (HSA) reviews and approves all new drugs, whether branded or generics into Singapore. All importers incurs costs to submit and obtain approval from HSA. Singapore law also requires strict controls over the storage and distribution of drugs by qualified pharmacists and that increases the administrative costs. Added together, the regulatory costs will adversely affect the final price of the drug sold in Singapore – but for the right reasons! Not all the countries in the region have such controls in place — in fact, some countries will sell you controlled drugs without asking for a doctor’s prescription.
- For most drug makers, Singapore is considered a small market. The lack of economies of scale in bringing the drug to market in Singapore will result in drugs being more costly to patients. In countries like Malaysia, there is also a lot of competition between pharmacies that keeps prices down.
- In Singapore, the government buys drugs through tender and are generally able to offer them to the public at a subsidised price. At polyclinics, generics drugs are significantly lower in price, if available, compared to branded drugs. The Singapore government does not generally subsidise branded drugs. Patients who wants to buy branded drugs will have to pay the full price. Comparatively, the savings by buying generic drugs overseas is not significant – if they are government-subsidised locally.