Fine-tuning MediShield Life: From 2022, cancer drug treatments must be in 'positive list' to be eligible for claims

CANCER drug treatments are under scrutiny as a cause of soaring healthcare and claims costs. Current cancer patients will have to brace for changes.

From September next year, outpatient cancer drugs will have to be included in a list of clinically proven and cost effective cancer drug treatments, in order to be eligible for claims under the MediShield Life.

The creation of the "positive" list of cancer drugs and eligibility for claims under MediShield Life are two of the recommendations by the MediShield Life Council. These recommendations have been accepted by the government.

A third recommendation, also accepted, is for more granular claim limits. These limits will range between S$200 and S$9,600 a month, "to be better aligned to the different costs of cancer drug treatments", said the Ministry of Health.

Currently the MediShield Life sets a claim limit of up to S$3,000 a month for cancer drugs and services. This has the unintended consequence of "raising cancer drug prices to maximise claims", said MOH.

Integrated Shield (IP) plans, which currently provide as-charged coverage for outpatient cancer drug treatments, will also have to eventually be aligned to cover only treatments in the MediShield Life positive list, and set claim limits for each drug.

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The MOH said a "small proportion" of patients may find that their current treatment will no longer be claimable, or will be subject to a lower claim limit with no subsidy. Hence, the changes for MediShield Life will be implemented in September 2022 to allow time for patients to complete their course of treatment and to adjust treatment plans.

Insurers have until April 2023 to make adjustments to IP coverage. No changes will be made to riders.

MOH said the combined effects of the changes for MediShield Life is that cancer patients will pay less: close to 90 per cent of subsidised Singaporean patients will have their cancer drug bills fully covered by subsidy and MediShield Life, subject to co-payment which can be paid using MediSave.

Under today's system, 70 per cent of all subsidised Singaporean patients on cancer drug treatments have their bills fully covered.

Subsidised patients in the public healthcare institutions currently receive up to 75 per cent subsidy for drugs under the Standard Drug List (SDL) and the Medication Assistance Fund (MAF). The government will subsidise more cancer drug treatments and extend MAF subsidies to more Singaporeans by raising the eligible income criteria.

MOH said that following negotiations with drug manufacturers, 55 more cancer drugs will be listed under the SDL/MAF, which will increase support for around 150 cancer drugs.

MAF subsidies will be enhanced and extended to Singaporeans with per capita household income of between S$2,800 and S$6,500 a month, who do not enjoy subsidies today.

National spending on cancer drugs has been growing at a compound annual growth rate of 20 per cent, far exceeding the 6 per cent CAGR for non-cancer drugs. Cancer drugs accounted for a quarter of total drug spending in 2019 at S$375 million. If this trajectory continues, cancer drug spending is projected to hit S$2.7 billion in 2030.

This is partly due to rising cancer prevalence among Singapore residents. Medical advancements also come at higher cost.

Within MediShield Life, the number of claimants for outpatient cancer drug treatments rose 29 per cent to 29,100 between 2017 and 2019. Payouts also rose by over 50 per cent, from S$109 million in 2017 to S$168 million in 2020.

MOH said the Council's recommendations are in line with the approaches in other developed countries with advanced healthcare systems such as UK, Australia and South Korea.

Negotiation with drug companies is a key strategy to rein in costs. Singapore is paying significantly higher prices for cancer drugs - as much as 50 to 100 per cent more - than other countries such as Taiwan, South Korea, Australia and New Zealand. Over the past few months, negotiations by MOH have yielded results: the average price reduction is about 30 per cent, and over 60 per cent for some cancer drugs.

More granular claim limits under MediShield Life are also expected to support procurement of cancer drugs at better prices, and enable more targeted coverage including higher claim limits where the treatment is clinically appropriate and cost effective, said MOH.

A separate claim limit of S$1,200 a year for cancer drug services was also recommended to cover costs such as scans, blood tests and doctor consultations.

The positive list of cancer drugs can be accessed at the Health Ministry website. The MOH Drug Advisory Committee comes up with the list, which will be updated every four months. Oncologists can request the Agency for Care Effectiveness (ACE) to evaluate treatments for potential inclusion in the list if there is positive clinical evidence to support their use.

About 90 per cent of existing cancer drug treatments used in the public sector will be included in the positive list. This may include treatments that are common today but are not registered with the Health Sciences Authority or are not cost-effective. They will be assigned a claim limit similar to their subsidised alternatives, including generics and biosimilars. Patients are encouraged to consult with their doctors on the use of available clinically proven and cost-effective treatments.

Dr Tan Yew Oo, chairman of the Cancer Drug Committee and member of the MediShield Life Council, said: "Recent developments in malignant haematology and medical oncology, such as the discovery of targetable genes and development of immune checkpoint inhibitors, have resulted in a significant increase in the cost of cancer drug treatments... In some cases, there is currently insufficient clinical evidence that these drugs are effective in improving overall survival or duration of response."

He said the current claim limit of S$3,000 a month "does not incentivise drug manufacturers to offer better prices or encourage the use of clinically proven and cost-effective treatments".

Dr Jeremy Lim of the NUS Saw Swee Hock School of Public Health said: "Runaway healthcare costs are harmful to everyone. There is a need for sustainable expenditure commensurate with societal expectations. The rightful role of payers including the government is to secure as much value as possible. Hence robust pricing negotiations are not only acceptable but strongly desired."

He said there is a ripple effect by design for IPs and riders. "We cannot encourage massive differences in coverage especially for illnesses like cancer; the equity imbalances will be hard for the public to stomach. And, given that 70 per cent of the population have IPs, if there is no reform for IP and riders, the overall policy objective of checking and reining in costs will not be achieved."