POLYCLINICS (Prices of drugs)

Mr Low Thia Khiang asked the Minister for Health (a) why the prices of some drugs in polyclinics are higher than those of restructured hospitals; and (b) how can the Government ensure that polyclinic patients will get the best deal in drug prices.

The Minister for Health (Mr Lim Hng Kiang): Mr Speaker, Sir, the Member asked why the prices of some drugs in polyclinics are higher than those of restructured hospitals.

This anomaly arose because historically we charge drugs in the polyclinics under a system which is different from the way we charge drugs in the restructured hospitals.

The charging system for Standard Drug List (SDL) medication at the polyclinics is set at a fixed rate of $1.40 for one week's prescription. It has been so for many years. The reason is because we want it to be simple and easy to administer. So in such cases some patients will pay more than the cost of drugs, if the cost of drugs is lower than $1.40, whereas other patients will pay less than the cost of drugs, if the cost of drug is more than $1.40 per week's supply. So there is a cross-subsidy in the polyclinic system.

In the restructured hospitals, being corporatised, they charge the drugs based on the cost of the drugs. So, as a result, you will find that some drugs cost more in the polyclinics than in the hospitals.

Although this charging system has served us well in the polyclinics, my Ministry is reviewing this system, together with the clusters, to explore ways to improve the charging system and harmonise the drug charges across the different public sector institutions. We have to take into account constraints, such as IT infrastructure and also how to educate Singaporeans to adjust to these changes in the pricing system. The results of this review will be made known in due course.

On the second question about ensuring that patients get the best deal in drug prices, I would like to inform the House that the two healthcare clusters have set up a central agency, called the Group Purchasing Office (GPO), to purchase drugs for all the public healthcare institutions, including the polyclinics. The Group Purchasing Office has started with bulk purchasing of high volume standard drugs and would, over time, extend it to all the other drugs. Currently, both clusters purchase around 90% of their standard drugs, which is around 400 items, through the Group Purchasing Office. Central purchasing by the Group Purchasing Office helps to standardise the price of drugs and also achieve savings, which can then be passed on to patients.

Mr Low Thia Khiang: Sir, I am worried about this review on the drug charging system. Would the Minister tell us more about this review and whether or not there will be a cap on the charging of drugs, as in the existing charging system for polyclinics, which is at $1.40? Will the cap remain at $1.40 or is it going to be bottomless?

Mr Lim Hng Kiang: I think the Member meant the "ceiling" and going over the roof and not "bottomless". That is the reason why we have been taking some time in considering this review. As I explained earlier, in the polyclinics, we have a very simple system, a standard $1.40. So for those drugs which are cheaper to buy, cheaper in cost, then you pay slightly more. For those drugs, especially for patients who have chronic conditions, they come to the polyclinic very regularly, this ceiling of $1.40 helps them. This system has been in place for a long time. It has served us well. We are quite reluctant to change it. But then it gives rise to this anomaly that for those drugs which are very lowly priced, you are charged $1.40, whereas if you go to the hospital, it could be 60 or 70 cents. Then, people may raise problems. If we go by charging actual cost, then, of course, the cost will be harmonised across all institutions. But as Mr Low Thia Khiang says, those chronic patients, who have been paying the low standard price of $1.40, may now have to pay higher prices because the cost is actually much higher.

We considered this last year and we wanted to make a change. In the end, we decided not to change for two reasons: first, to make the change requires us to spend money on IT, which will then cause the charges to be higher also. And, secondly, some people will pay less, but some will have to pay more.

So, in the light of last year's economic conditions, we decided to keep the change in view. But a lot of questions were raised by Members and also in the press. We cannot keep this standard charge forever. At some point, we have to move to proper charging by cost. When the time is necessary to make the change, we will have some transitional measures so that the changes would be made as light as possible for those who have to pay more.