October 13, 2016

Singapore: Key Insights Into One of the World’s Most Efficient Healthcare Systems

By Xcenda

Singapore has one of the most highly advanced and efficient healthcare systems in the world. With over 5.54 million people and a GDP of $402 billion in 2015, Singapore is a small country with economic influence. Singapore’s high per-capita earnings have allowed the country to make significant investments in healthcare. The government has committed $3.2 billion to improving healthcare delivery and fostering research and development in medicine. In this article, we will explore the current healthcare environment in Singapore and the implications on manufacturers who wish to achieve access and reimbursement for their products in this market.

HTA QUARTERLY | WINTER 2016

Singapore: Key Insights Into One of the World’s Most Efficient Healthcare Systems

By David Campbell, PharmD, MS and Chelsey Campbell, PharmD, MBA, MS

Singapore has one of the most highly advanced and efficient healthcare systems in the world. In fact, Bloomberg ranked Singapore as the most efficient country for healthcare delivery in 2014, beating out 51 other developed countries. With over 5.54 million people and a GDP of $402 billion in 2015, Singapore is a small country with economic influence. Singapore’s high per-capita earnings have allowed the country to make significant investments in healthcare. The government has committed $3.2 billion to improving healthcare delivery and fostering research and development in medicine. As such, Singapore is poised to become an increasingly important market for manufacturers around the globe. In this article, we will explore the current healthcare environment in Singapore and the implications on manufacturers who wish to achieve access and reimbursement for their products in this market.

Structure and Design of the Singapore Healthcare System

To manage the cost of healthcare, Singapore utilizes both public and private funding. Healthcare is primarily managed by the Ministry of Health, and there are several government programs including Medisave, MediShield Life, Medifund, and ElderShield to manage health expenses. Citizens have the opportunity to purchase supplemental insurance to complement government programs. The details of each of these programs are outlined in the table below.

Product Registration, Pricing, and Reimbursement in Singapore

Pharmaceutical Registration

The Therapeutic Products Branch (TPB) of the Health Sciences Authority (HAS) under the purview of the Singapore government is responsible for the registration of medicines and the continual review of previously approved technologies. Similar to other markets, Singapore requires manufacturers to submit a New Drug Application (NDA) in order to receive market authorization. There are 3 different types of NDAs. NDA-1 is for the first strength of an innovator product, NDA-2 is for a new combination dosage form of previously approved entities, and NDA-3 is for lesser changes such as new indications, dosing regimens, patient groups, or legal changes such as change of name of license holder. Manufacturers have the opportunity to submit their application among 3 application-evaluation pathways with varying timelines. Applications can be submitted through either full, abridged, or verification routes, which take approximately 270, 180, and 60 working days, respectively. To qualify for the abridged pathway, the technology must be previously approved by one reference agency. To qualify for the verification pathway, the technology must have been previously approved by 2 or more reference agencies. The health authorities that qualify as reference agencies by the HAS include the Therapeutic Goods Administration (TGA) of Australia, the United States Food and Drug Administration (FDA), the European Medicines Agency (EMA), Health Canada, and the United Kingdom’s Medicines and Healthcare Products Regulatory Agency (MHRA). In addition to the alternative NDA routes, Singapore offers abridged dossier and verification dossier regulatory submission options to optimize time to market and efficiently utilize HAS resources. The availability of alternative application-evaluation pathways reflects the country’s commitment to efficiency.

Product Registration, Pricing, and Reimbursement in Singapore

Pricing and Reimbursement

Compared to the registration process, the policies and procedures for the pricing and reimbursement of pharmaceuticals are less transparent. The Singapore MOH has created the Standard Drug List 1 (SDL-1), which contains medicines that it has deemed essential and cost-effective. Medicines contained in the SDL-1 often treat common diseases and are heavily subsidized by the government to promote access. To ensure access to more costly treatments in areas like oncology, the government established a second formulary called the Standard Drug List 2 (SDL-2). Medications contained in the SDL-2 are also heavily subsidized, as patients are required to pay just 50% of product costs. Any medicine that is considered for inclusion in the SDL formularies must be evaluated for cost-effectiveness by the Pharmacoeconomic Evaluation and Drug Utilization (PEDU) unit within the Center for Drug Administration. However, specifics of the pharmacoeconomic evaluation process are unclear. To address transparency concerns, 2 significant changes were implemented by the MOH in 2005. First, the MOH has allocated a budget for the maintenance and improvement of the SDL formularies to ensure that they are current with technological advances. Second, medical boards of public institutions are now included in the SDL formulary decision making and ranking process. Before this change, physicians of public institutions would make ad-hoc requests for medicines, and appraisal criteria were less consistently applied to products under consideration.

Pharmaceutical Market Outlook

Similar to other countries of the region, such as Japan , Singapore has an aging population that will require increasing healthcare resources in the coming years. In an environment of an aging population and strong healthcare funding programs, the pharmaceutical sector should experience continued growth. However, to establish a place in Singapore’s highly efficient healthcare system, manufacturers should be prepared to demonstrate the value of their products, including comparative cost-effectiveness data. The transparency of the drug appraisal process, including pharmacoeconomic assessments, remains limited, but recent changes to the process are promoting clarity. Additionally, the pricing of innovative therapies may be challenging. Due to the healthcare financing structure in which individuals self-finance their healthcare, the affordability of high-cost medicines is problematic. Despite pricing concerns, the overall healthcare and pharmaceutical markets of Singapore are poised for continued growth, and the country has established its position as a key market of Asia.

The article should be referenced as follows:

Campbell D, Campbell C. Singapore: Key insights into one of the world’s most efficient healthcare systems. HTA Quarterly. Fall 2016. Oct. 13, 2016.