Going To Malaysia For Medical Services

As mentioned, one reason for differences in the cost of medical treatment in Singapore and other countries in Southeast Asia is due to the practice of imposing different prices on different segments of customers. In economics, this practice is known as “third-degree price discrimination”.

In its Working Paper International Trade and Determinants of Price Differentials of Insulin Medicine, the Asian Development Bank Institute states that:

“(Prior) empirical studies on pharmaceuticals pricing across countries have found evidence that prices vary according to per capita income.”
“…… we study the international trade and price of insulin by using detailed trade data for 186 importing countries from 1995 to 2013…… corroborating earlier studies, we find that per capita GDP is positively correlated with the unit price of insulin.”

In other words, pharmaceutical companies charge higher-income countries like Singapore more for drugs and medicines. Indeed, one of the strategies implemented by the Singapore Ministry of Health to lower the cost of cancer treatment in Singapore was the implementation in 2022 of the policy that patients may claim against MediShield Life and Integrated Shield Plans only for drugs under an approved Cancer Drug List. To qualify to be placed in the list, drugs must be deemed to be medically and cost effective by the health authorities. The intention is to force pharmaceutical companies to sell the drugs to Singapore at a lower cost so as to qualify for being considered as “cost effective”. According to a recent statement by the Ministry of Health, Singapore has been able to negotiate “an average cost reduction of 30 per cent, and over 60 per cent for some drugs” as a result of this strategy.

Some form of price discrimination may also occur within individual private hospitals or clinics. These clinics may for instance offer discounts for certain patients, while declining to do so for others, particularly so if the patients have full insurance coverage. The problem of “overly generous” insurance coverage pushing up medical costs is also recognised by the Singapore government. In the same statement, MOH says that “…… the mark-up of cancer drugs by some healthcare providers may be significant, encouraged by “as-charged” coverage. MOH has taken steps to curb this by mandating a minimum co-payment for bills covered by new riders in 2018. With the changes from April 1, 2023, we have taken another major step with the CDL and the requirement for IPs to set claim limits for cancer drug treatments, instead of having no limits at all.”