GOVERNMENT/RESTRUCTURED HOSPITALS AND OUTPATIENT CLINICS (Pricing policy of medicines)

Mr Chia Shi Teck asked the Minister for Health (a) what is the pricing policy of medicines prescribed in all Government and restructured hospitals and outpatient clinics; and (b) whether he will consider introducing controls on the profits allowed on the sale of medicines by doctors, clinics, hospitals and pharmacies.

The Minister of State for Health (Dr Aline K. Wong) (for the Minister for Health): Mr Speaker, Sir, Government and restructured hospitals and specialist outpatient clinics (SOCs) provide standard and some non-standard drugs. Standard drugs prescribed to Class B2 and C patients are charged at subsidised rates while those for Class A and B1 patients are charged at cost. Over time, we will rationalise these rates to match the subsidy targets for the different class wards. For non-standard drugs, the policy is to recover the cost from all classes of patients. However, Class B2 and C patients who are prescribed non-standard drugs and have difficulty paying may apply for remission of these charges, as at present.

On average, the cost of drugs constitutes less than 10% of a hospital bill.

The Ministry has no plan to introduce controls on the pricing of medicine in clinics, hospitals and pharmacies in the private sector. Presently, patients in the private sector have a choice of getting the medicines from the doctors' clinics or to request for a prescription to buy the drugs from private pharmacies.

Mr Chia Shi Teck: Sir, from the Minister of State's answer, I do not feel that you are pricing the medicine according to cost. Dr Moses Yu called me and said they actually price according to cost, a multiple of a few times. His answer was that cheap medicine, ie, medicines costing by the cents, you multiply it, and it could be a five to seven times profit. But there are certain medicines that they price below cost. So it could be an averaging that you are doing. I do not know.

Mr Speaker: What is your question?

Mr Chia Shi Teck: Sir, the question is that the answer I got from the doctor to the question which I asked the last time, and the Minister of State's answer do not seem to tally. I put in the question because I thought that it has a policy in pricing and that the cheaper drugs are priced at a higher profit, and the expensive drugs are priced at a subsidy. Is that the way you price it? I do not know.

Dr Aline Wong: Mr Speaker, Sir, Mr Chia's question is on the general pricing policy. It is not about specific ways in which drugs are priced. I do remember that the last time he spoke on the White Paper, he raised this question about some drugs being more expensive. But I wish he had also checked his facts. Dr Moses Yu also informed me that for all the expensive drugs - and I have checked the prices - the charges at Government and restructured hospitals and SOCs are cheaper than private pharmacies.

If you are referring to certain drugs which constitute a very small proportion of our Standard Drugs List which are priced slightly higher than the cost - our practice is to charge $1 per item per week, up to a maximum of $4 per week - out of the nearly 500 items of standard drugs, less than 10% cost less. But you have to add the administrative cost for dispensing and procuring the drugs. So for administrative convenience, less than 10% of the standard drugs dispensed at outpatient clinics can be slightly higher than the cost. But these average out with those drugs charged below cost.