Opportunities In The Singapore Medical Market

Although a relatively small island located off the coast of southern Malaysia, Singapore boasts a remarkably technologically advanced society. This city-state of only 2.8 million people is equipped with a trade-friendly government, duty-free port, well-developed infrastructure, and exceptional telecommunications and transport systems. It has taken an important lead in many areas for the ASEAN (Association of South East Asian Nations) region, which comprises over 350 million people.

With health standards second only to Japan, Singapore has developed a highly advanced medical market and earned a distinguished reputation for being the regional medical treatment center for the ASEAN countries. Wealthy individuals in neighboring countries increasingly look to Singapore for medical care. The number of foreign patients is expected to grow at 10% annually.

Singapore’s comprehensive healthcare facilities serve as a model to be emulated by its neighbors. The government subsidizes public health services, and provides its citizens with free basic emergency care. During the period 1987-1991, government healthcare expenditure rose from $80 million to $137 million, a 71% increase. The number of healthcare professionals during this period rose 20% from 13,300 to 16,000.

Singapore’s extensive health insurance system assists its citizens in covering healthcare costs. Under Medisave, the nation’s compulsory medical services plan, Singaporeans contribute 6-8% of their income to inpatient and outpatient care in both government and private hospitals. Additional insurance programs include Medishield, which provides low-cost insurance in cases of catastrophic illness, and Medifund, which assists individuals with insufficient Medisave funds. With coverage under all three plans expanding, the demand for medical care in Singapore has been rising.

Singapore’s rapidly aging population has also contributed to the island’s increasing interest in healthcare. The population’s median age in 1991 was 30, with 245,000 people in the over-6- age group. By 2020, the median age is expected to be 41, and the over-60 population to increase by 230% to 800,000. As the population ages, overall health consciousness has risen. In consequence, Singaporeans are demanding better facilities and newer services, and their prosperity means they are able to pay.

… medical device market

In 1992, Singapore’s medical device market was worth approximately $125 million, growing annually at an estimated 10%. Because local firms primarily manufacture disposables (90% of which are exported), the island produces almost no medical equipment. Led by the US, Japan, Germany, the UK, and the Netherlands, foreign manufacturers dominate the medical device market.

US firms have a reputation for manufacturing the most sophisticated products, but they tend to charge high prices by Singaporean standards and often fail to provide prompt services. European products are generally considered to be not only durable and of high-quality, but also relatively inexpensive and promptly serviced. Japanese suppliers offer the least sophisticated and cheapest medical equipment.

… how the system works

Three types of hospital exist in Singapore: government, restructured and private. Restructured hospitals are government hospitals that have been expanded, renovated and privatized, albeit with some government regulation. In recent years, the improving facilities of Singapore’s restructured and private hospitals have attracted an increasing number of patients. Over the last five years, the government has restructured three hospitals; it plans to renovate and rebuild two more by 1994. As Singaporeans grow wealthier, they are increasingly demanding the specialized care and advanced technology of the more expensive private hospitals. Admissions to three hospitals have risen from 9.6% of the total in 1987 to 22% in 1990.

Private hospitals purchase supplies direct via local agents and distributors. Most hospitals have procurement departments that coordinate medical purchases and maintain lists of agents and distributors.

The Singapore Ministry of Health is responsible for national health policy and administering government healthcare services. Purchasing decisions for government and restructured hospitals are centralized under the Ministry’s Pharmaceutical Department, which generally favors suppliers that offer competitive prices and prompt service. In 1992 the Ministry’s expenditures totaled $588 million, up 43% on 1991. Government tenders are open only to suppliers registered with the Department, and unless a firm has an office in Singapore, registration must be carried out by a local agent or distributor. The process takes two to three months, and registration is valid for three years.

… favorable business climate

The Singapore Economic Development Board (EDB), a government agency promoting high value-added industries, is responsible for much of the government’s attention to improved healthcare. The EDB promotes Singapore as a regional medical center with specialist services in an effort to attract foreign manufacturers of specialist equipment. Having identified biotechnology as a key industry, the EDB established the Institute for Molecular and Cellular Biology in 1987, inviting foreign participation. In 1990, the EDB created a biotechnology investment division, Singapore Bio-Innovations (SBS), to invest in biotechnology companies that can nurture the local industry. SBI currently invests in six Singapore, three US and two UK biotechnology firms.

As a free port, Singapore has a favorable import climate for foreign manufacturers. In general, there are no tariffs, quotas or trade barriers for medical equipment and most other products. No import license is necessary, although some products may require approval by the Ministry of Health. Foreign firms interested in supplying to Singapore should contact qualified distributors, agents or consultants regarding the need for approvals and/or testing.

In addition to the products mentioned above, many profitable opportunities for foreign suppliers exist in the areas of cardiology equipment, artificial respirators, ophthamological equipment, therapeutic electromedical apparatus, and hearing aids and parts.