The first tranche of 11 drug “guidances” has been issued by the Agency for Care Effectiveness (ACE), an agency started by the Ministry of Health (MOH) in 2015 in an effort to promote appropriate patient care. 

The materials published online provides information on suitable treatments and the availability of government subsidies for the drug, if any, in order to help healthcare professionals and patients select medications that are cost-effective and proven to treat their medical conditions.

For instance, the guidance for the medication sumatriptan outlines that the drug has superior clinical outcomes when combined with the anti-inflammatory drug, naproxen. It also highlights that the government provides a subsidy for the drug.

The tranche includes treatments for cancer, diabetes and stunted growth in paediatric patients. Out of the 11 released, nine drugs will have government subsidies which will amount to millions of dollars per year.

Framework improves transparency in decision-making

It is estimated that for every SGD3 spent on healthcare in developed countries, SGD1 is wasted, often for drugs that are less effective and do not give value for money.

ACE is responsible for determining the relative value of new technologies and medications to “equip policy makers with objective and credible evidence to guide decisions on healthcare treatments and subsidies,” said the MOH. According to the ministry, the guidances are founded on an internationally accepted method that is used to evaluate the cost and clinical effectiveness of new technologies.

The amount of subsidy, if any, is then decided by the Drug Advisory Committee (DAC) – a committee of 15 expert clinicians – based on ACE’s assessment on the drug’s value.

This is the first time the rationale behind the committee’s decisions on drug subsidies is made public by the MOH, with the ministry stating that “the transparency of decision-making” was in line with practices by other agencies abroad. Previously, certain drugs will receive subsidies after requests by doctors, but without clear explanations on how the decision was made.

"This framework of critical appraisal of new health technologies is accountable, transparent and evidence based,” said Dr Stanle Liew, a diabetic specialist from Raffles Hospital, who has praise for the guidance.

Patients pay less for medications with value-based pricing

"It's not about whether it is expensive or cheap, but rather the value of the drug," said executive director of ACE, Dr Daphne Khoo, adding that it is difficult for doctors to keep up to date with new drugs and their efficacies.

With value-based pricing, patients would fork out less for certain medications, and those who are entitled to subsidies will have to pay even less.

“They also have better-quality information about the effectiveness of the treatments they’re opting for,” she added.

For example, the agency looked at the blood thinner, rivaroxaban, and decided that the drug would only provide value for money only if it was provided at a certain price. The team then approached pharmaceutical companies that manufactured different brands of the drug, and selected the provider that agreed to reduce its price.

The price of the drug now costs up to SGD3.08 for patients without Medication Assistance Fund (MAF) subsidies, down from the previous cost of SGD4.40 to SGD5.70 for a day’s supply. Patients who qualify for help under the MAF will receive an additional 50% or 75% subsidy.

"While medical technology has enabled us to live longer and better, such improvements have almost always resulted in rising healthcare costs,” said MOH’s director of medical services, Associate Professor Benjamin Ong.

"ACE's work is critical to enable the identification of treatments with good outcomes at affordable price points for our patients. This will help ensure that our healthcare system remains both effective as well as sustainable for future generations."

The next tranche of guidance is expected to be issued by ACE in October. MIMS

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