PR1 - Value-Based Pricing in Singapore: Is it a Race to the Bottom?

Abstract

A review of the drug guidance recommendations released by the Agency of Care Effectiveness was conducted to assess the impact of the perceived value and price of a drug on subsidy decisions. The review encompassed all 19 appraisals published between May 2017 and March 2018. The factors considered by the Drug Advisory Committee were extracted and assessed. Of the 19 appraisals assessed, 5 led to recommendations for subsidy listing on the Standard Drug Lists, 11 led to recommendations for inclusion on the Medication Assistance Fund, and 3 led to no subsidy recommendation. For the 16 positive recommendations, there was either a therapeutic gap in treatment, the drug was considered the standard of care, the drug had a cost-effective price relative to alternatives, or a combination of these factors applied. Positive recommendations, when there were comparators, and the price relative to comparators was noted, were given for the cheapest drug in 88% of instances. In 1 appraisal (rivastigmine), the formulation was subsidised despite being the more expensive option, as it offered a novel drug delivery mode that might improve treatment adherence and relieve caregiver burden. Discounts were cited in 5 appraisals, 2 of which did not lead to positive recommendations – in both instances the drugs were not the cheapest option even with the discount. 3 other appraisals also appeared to have considered discounted drug prices. Discounts may thus not have been systematically reported in all appraisals. This research highlights that a therapeutic gap and cost relative to comparators are important criteria to inform subsidy recommendations in Singapore. In the absence of a clinical need or therapeutic gap, the cheapest therapies appear highly likely to receive a positive recommendation – discounts can lead to positive outcomes, but this appears less likely if the discounted drug is still not the cheapest option.