A charade to say that Singapore can negotiate from a position of strength with the pharmaceutical giants
by Foong Swee Fong
Yet another piece of propaganda from the Straits Times.
This time a clumsy attempt by senior health correspondent Salma Khalik to convince Singaporeans that the state is buying drugs from big pharma from a “position of strength”.
The essence of the article is that in the past Singapore was a ‘dream market’ for big pharma, that we were ‘passive price takers, paying whatever price they asked’.
But after the establishment of the Agency for Healthcare Efficiency (ACE) in 2015, which recruited Mr. Ng Kwong Hoe to lead its health technology assessment department and developed expertise in the assessment of the “relative value of new drugs” we were able to “negotiate from a position of strength”, saving the country S$400 million.
Instead of feeling grateful, readers should worry that pharmaceutical companies had complete bargaining power over us and that before 2015 we were buying drugs without knowing the “relative value of the drug”.
I have the impression that the people in the department responsible for purchasing drugs considered the money as mere figures on their computer screen to be debited, as long as the drugs were purchased and within a budget that is not negligible.
In the article, Salma claims that 400 million Singapore dollars have been saved since 2015, but given that the annual health budget is in the tens of billions of dollars in recent years, 400 million dollars is actually a drop of water in the ocean.
Is ACE really capable of “negotiating from a position of strength”? Or is it just a vain attempt at token resistance at best, or a charade to deceive unsuspecting people at worst?
A Straits Times forum writer, Alban Kang, may be in the pharmaceutical business and is therefore familiar with the technical aspects of the business, urge authorities to revamp the “Patent Linkage System” as it protects patent holders by preventing generic drugs from being marketed here.
He also notes that process patents (I would call some process patents), such as methods of producing chemical ingredients for a drug, are enforced here but not in other countries, thus creating more patents and therefore a price protection for more drugs.
The net effect in both cases is that Singaporeans are forced to pay more for drugs.
Unlike ACE, Mr. Kang genuinely tackles the root cause of high drug prices here – the rules stipulated in the many free trade agreements (FTAs) signed with other countries, particularly the United States, that reinforce the monopoly powers of foreign pharmaceutical companies here.
As a member of the World Trade Organization (WTO), we are required to follow a minimum set of rules to protect Intellectual Property Rights (IPRs), so that innovation is encouraged.
However, our government, in striving to make Singapore an intellectual property hub and a biotech and pharmaceutical hub, has compelled Singaporeans not only to strictly abide by WTO IPR rules, but also the many rules going beyond the requirements of the WTO which it has agreed in FTAs, particularly the US-Singapore FTA, that while strengthening the monopoly powers of pharmaceutical companies, thereby 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 Kang is calling for an overhaul is not required by the WTO, but is stipulated in the US-Singapore FTA. The same year the FTA entered into force (2004), Singapore’s Medicines Act was amended to fulfill our obligation under the FTA.
There are many other rules our government has engaged with other countries through the FTAs it has signed and imposed. These rules give monopoly powers to foreign pharmaceutical giants. So we have to pay “whatever price” they charge and ACE can’t do anything except go through the charade that we can “negotiate from a position of strength with the big pharmas”.
This opinion piece was first published on Mr. Foong’s website Facebook page and reproduced with permission.