Thailand’s healthcare system has been a shining example to its neighbours and ensures all Thai citizens have access to nearly-free basic coverage. However, the system has strained public finances and will be affected by a loosening of the state monopoly on pharma sales. This signals a new era in the Thai pharmaceuticals market.
We are in a transitional period and there is an opportunity to go in various directions
Christopher E. Knight, PReMA
Thailand may lag behind the ‘new Asian tigers’ in terms of economic growth, but something the country can boast about in the region is its universal healthcare system. Implemented in 2002 with the objective of providing a basic level of care to all Thai citizens, the system is divided into three main programs: the Civil Servant Medical Benefit Scheme, which covers approximately seven million government workers; the Social Security Scheme, which ensures about ten million private-sector workers and the Universal Coverage Scheme, which provides nearly-free basic healthcare coverage to the remaining 50 million Thais upon the payment of a symbolic contribution of THB 30 (USD 1) per visit. Since then Thailand’s healthcare system has been an example to the entire Southeast Asian region: the Philippines and Vietnam are making great strides to create a healthcare scheme that resembles Thailand’s, while Indonesia recently started laying the basis for a universal healthcare program to cover all citizens by 2019.
But the implementation of universal healthcare came with a toll. Today public spending covers nearly 76 percent of Thailand’s total healthcare expenditure, which places a significant strain on state finances. “Financing … universal coverage is becoming more expensive,” explains Busakorn Lerswatanasivalee, CEO of the Thai Pharmaceutical Research & Manufacturers Association (PReMA). “In order to make it sustainable they need to find more funding, but if this remains unchanged Thai economists believe that this may lead the country to financial challenges.” Currently, different funding options are being discussed, ranging from a co-payment model to finding alternative sources. “We are in a transitional period and there is an opportunity to go in various directions,” points out Christoper E. Knight, advisor to the board of PReMA. “In my expert opinion, if the government does not act accordingly the system will not remain in place because it is unsustainable.”
Under this scenario it is no surprise that Thailand’s pharmaceutical market is state-dominated and volume-driven, with 80 percent of sales going to government hospitals, mostly supplied by the state-run drug manufacturer Government Pharmaceutical Organization (GPO). The abolition of GPO’s monopoly —due by the end of 2015—has been under discussion for a long time. Multinationals welcome a freer market; while critics claim the price of drugs may rise and the supply of essential drugs hindered. “Today, we are contributing to Thai society by providing better standards of living through production and supply of quality medicines at affordable prices,” explains Dr Nopporn Cheanklin, managing director of GPO. “Our sustainable business practices ensure the nation saves nearly THB 4 billion (USD 111 million) per year, as the government would have spent more on imported pharmaceutical products.” One thing is clear: the end of GPO’s historic monopoly would lead to a shakeup of the Thai pharmaceutical market.
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