No profit margin from sale of drugs?

As one of the biggest drug purchasers in the world, MOH Holdings should have been able to obtain bulk discounts from overseas suppliers. When medications are sold at much-lower prices across the causeway, something is clearly not right.

WP recently queried MOH Minister Gan on whether public healthcare institutions have been making a profit on drugs. Minister Gan unabashedly told Parliament: “While the drug prices include a margin, this is to offset overheads and operations costs … They are not profit margins.” link

But why do patients – as taxpayers – need to help MOH offset overheads and operations costs when these have already been allocated in the budget? Did the government misallocate public resources by, say, allocating a higher than necessary budget to defence?

Minister Gan can’t simply make a statement, assume all Singaporeans are daft and expect it to be taken at face value.

Healthcare costs have spiraled out of control, no thanks to PAP’s corporatisation, since 3 decades ago.

How PAP has priced polyclinic consultation fee at more than 100% higher than a private GP, as well as the rate of its increase, strongly suggests there is a profit margin in the sale of drugs.

In 2015, polyclinic consultation fee was ‘$38.97’.

Did inflation increase by 7%? Or wages of ordinary citizens? What has increased by 7% to justify the hike in consultation fees? Were polyclinics’ “overheads and operations costs” much higher than a private clinic?

Pricing consultation fee at $41.68 is a total rip-off unless MOH can justify this with a cost breakdown.

Patients may not have realised they have been ripped off because of the imaginary government ‘grant’. But the difference between the ‘full amount’ and ‘payable amount’ comes from taxpayers, ie patients.

It would be interesting to find out how MOH arrived at a $41.68 consultation fee when private GPs charge only about half the amount.

While the profit margin of consultation fee is clear as daylight – more than 100% – the profit margin of drugs can only be confirmed by MOH Holdings:
– Disclosing the cost price of all drugs, excluding ‘offset costs’.
– Publishing a complete set of accounts.

WP should not be satisfied with Gan’s reply as it would mean patients are forced to accept increasingly higher cost of drugs. If asking a question in Parliament is of no benefit to patients, then WP might as well not ask in the first place.

Since Minister Gan has claimed there is no profit margin in the sale of drugs, did high cost result from high staff cost? Million-dollar salary for top management? Was high land price (rental) included in the costing?

The days of PAP ministers making a statement and expecting Singaporeans to blindly accept as the gospel truth are over. 

The ball in in PAP’s court and hopefully with some assistance from the WP, we will know for certain if indeed MOH did not profit from the sale of drugs.

 

Phillip Ang

* The author blogs at LikeDatOsoCanMeh.

 

 

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15 Responses to “No profit margin from sale of drugs?”

  • LIONS:

    Its true,no profit,JUST PROFITEERING lah???

    New name for PAP is Profiteer And Profiteer!

    Well done lee ah long,you do your old man proud by COLLECTING MORE MONEY than he did?!

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  • Who are the 'Drug Lords?:

    Must be making tons of monies.

    Better than illegal drug cartels!

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  • All In The Familee:

    You believe in PAP liars and cheats?

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  • Tuck Wan:

    More questions & investigations should be done. Most Singaporeans feel that the healthcare cost is too high, especially the lower income earners. Well done Phillip Ang !!!

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  • KNN:

    Of course no profiteering lah!! Just need to cover multi-million dollar salaries of the CEOs, medical directors, heads of depts, senior consultants, etc. These are administrative & operating costs mah. That’s why need to top up another 1000% to your bills lah. But horr … no extra profit horr… all go to pay for overheads & operating costs horr…

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  • WP questioning ineffecive:

    It is WP, always, ask a question and accepts ministers’ answers and stops there, what is the use of asking as Philip Ang rightly pointed out. It is a well known fact that all kinds of medicine are much cheaper across the Causeway, why WP MPs did not follow up by asking Gan to explain why it is so? Disappointment withWP , are they so afraid of enraging the PaP ministers? Are they afraid of being sued, bankrupted or jailed? This is the sorry state of the opposition in parliament, do you think Sinkies are so daft as to vote in more WP MPs into parliament as many of its supporters have urged them to!
    If the G keeps increasing the doc consultation fees and medicine costs every year what is the meaning of. 50% discount for citizens, it will tantamount to no discount eventually, isn’t it?

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  • Conscientious Citizen:

    The price is absolutely high and especially so much higher for non-generic drugs that it’s a well known fact that we can get it cheaper at the private pharmacies, across the causeway and all of Asia.
    This one-party regime is skimming money off the common people to feed their appointed office-holders. Long live the oneself check ownself leegime!

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  • Ah Peng Kia:

    WP questioning ineffecive:
    It is WP, always, ask a question and accepts ministers’ answers and stops there, what is the use of asking as Philip Ang rightly pointed out. It is a well known fact that all kinds of medicine are much cheaper across the Causeway, why WP MPs did not follow up by asking Gan to explain why it is so?

    If it wasn’t for WP raising the questions, including about AIM, education system, MRT maintenance, workers rights etc, would netizens even be aware of many of these issues and where the government had been pulling wool over our eyes? Before you judge WP, consider their limitations in Parliament (time allowed, access to information, resource / manpower, parliament protocols etc). We should support WP and other alternative parties so that PAP no longer has dominance in Parliament and policy making sphere. PAP’s dominance has brought nothing but pain and more belt-tightening measures for citizens, while they continue to be deaf to “dafts”, and laughing all the way to their bank.

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  • Bebe:

    It’s the same with the CPF mah; they said never use but proved otherwise, some more made sillyporeans unable to retire. 70% voted for this kind of gov!
    We could have been the happiest nation on earth but the pappies made life difficult for everyone; daft or silly?

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  • rukidding:

    P.a.p. = Pimps and prostitutes never make any “losses”….it always “profit” lah !

    Also well known fact that they will lie, cheat and con you !

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  • Not the Full Picture:

    In most countries pharma products are priced based on the PPP of the jurisdiction. Pharma has long practised differential pricing. Given the exchange rate and average earnings of Singaporeans, prices here would be approximately 3 times the prices in Malaysia for many medicines.

    The effect of subsidies change this in some countries.

    If we want to complain, bash the pharma companies. In any case, they couldn’t care less if even if they are shut out of Singapore because we are so small it wouldn’t even make a downward blip in their annual results.

    No use barking up the wrong tree and blame the PAP for this. The PAP is not so influential to be able to bend the pharma companies without the influence of large economies like EU and US and China and India. If one is very sick, just buy from JB. The Pharmacists in Msia will sell you almost anything you can pay for.

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  • Sceptic:

    It is not like Singaporeans are the only ones facing these issues.

    Japanese and Europeans and Americans are charged sky high prices for medicines also. And many with chronic illnesses find many creative ways of getting their medications from countries where such medicines are priced much more attractively.

    Having said that, don’t expect the Government to openly broadcast a vast public campaign on how to get cheaper medicines from JB.

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  • Sceptic:

    Some US States have been showing their chronically ill residents how and where to get cheaper medicines from the big pharma companies. Even the US doesn’t seem to be doing anything (or able to do anything) about it. What chance do you expect Singapore to have?

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  • HHH:

    You need to know the house speaker, Mdm President is always feigning ignorance and pretending not to see WP’s raising hands to follow up on the ministers’ answers. If not, she will cut WP short and stop them from probing.

    And she is rewarded as the next multi million KFC.

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  • Name the Drug Kingpin!:

    Which cartel is responsible and who rakes in the monies?

    They are making more monies than the mafia!

    Shame them please!

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