The Pharmaceutical Industry in Singapore 

Kala Anandarajah & Tan Loo Ying provide us with an insight into the regulatory and legislative structure of the pharmaceuticals industry in Singapore. This article also looks specifically at the licensing issues relating to pharmaceutical products.

 

Introduction

The pharmaceutical industry in Singapore is a growing one and one which has a considerable amount of Government backing. It is part of the pharmaceutical, biotechnology and healthcare cluster in Singapore. These three industries have been grouped together as they have synergies and address common issues of human healthcare. Of the three, pharmaceuticals is viewed as the strongest sector. 

In the mid-1990s, the Singapore Government designated a 50 hectare site at Tuas, the industrial hub of the country, as a pharmaceutical and biotechnology zone, known as the Pharma Zone. The particular focus of the Zone is to tap the good growth potential of new pharmaceutical and biotechnology manufacturing companies. It has, to date, proved successful with an established cluster of leading foreign companies such as SmithKline, Glaxo and Merck now dominating the industry here. They have multi-million dollar manufacturing facilities in Jurong Island and Tuas. The Singapore Government's approach has been to adopt a proactive policy in the pharmaceuticals industry. In this regard, it plans to integrate pharmaceuticals with drug discovery, healthcare and clinical testing. 

The importance of pharmaceuticals in Singapore is reflected in the growth of the industry. It was a driving force behind the boom in life sciences in 1999 and is expected to continue to do well. It grew by 28% in the first four months of 2000. Together with medical-device output, it has a 60% increase in output and these two sub-sectors will reach the S$12 billion mark within two years if they continue to grow at the current rate. 

Governing Authority and Regulatory Structure

The competent authority governing pharmaceuticals is the National Pharmaceutical Administration ('NPA') set up under the Ministry of Health. The NPA is charged with, inter alia, planning and developing national drug policies, pharmaceutical programmes and services, administering and enforcing legislations governing the control of western and chinese medicinal products, controlling cosmetic products, inspecting pharmaceutical factories, wholesale and retail premises, issuing advertisement permits for medicinal products, planning for emergency pharmaceutical supplies, and establishing international relationships on pharmaceutical matters. 

Under the NPA, there are a number of divisions or units which have been assigned specific administrative tasks.

Firstly, the NPA's Drug Administration Division is responsible for registering and licensing western medicines, and the control of the import of medicinal products into Singapore. The Drug Administration Division also processes applications for new product licences, amending and renewing existing product licences; approving the import of unregistered medicinal products and issuing permits (on a per consignment basis) for the import of medicinal products to be re-exported (within 6 months upon approval). More particularly, the Medicines Act (Cap 176) provides that the responsible authority is the Director of Medical Services. The Act further adds that the responsible authority is the Director of Primary Production where the functions to be performed relate exclusively to veterinary medicinal products and animals.

Next, the NPA set up a Chinese Proprietary Medicine Unit to administer regulatory control on Chinese proprietary medicines ('CPM'). This is to warrant that CPM sold in Singapore are safe, of good quality and labelled appropriately. It is to facilitate prompt withdrawal of CPM from the market when necessary. In brief, the relevant legislation defines what are CPM, specifies safety limits for toxic heavy metal and microbial content in CPM, and requires CPM dealers to be licensed. While CPM dealers need not register individual products, they are obliged to provide information on the CPM which they intend to import or manufacture, and they are only allowed to deal in approved products.

Thirdly, the Good Manufacturing Practices ('GMP') and Licensing Unit ('GMPU') was formed within the NPA to inspect and license pharmaceutical manufacturers and cosmetic products, as well as importers/wholesale dealers in accordance with current international GMP and Good Distribution Practices ('GDP') standards respectively. All wholesale dealers and importers of medicinal products, including CPM, are required to comply with GDP. 

GMPU's functions include the licensing of pharmacies, dealers of medicinal products, including CPM, the regulating of psychotropic substances and narcotic drugs in accordance with international drug conventions, and the granting of the Certificate of a Pharmaceutical Product under the World Health Organisation ('WHO') Certification Scheme on the Quality of Pharmaceutical Products Moving in International Commerce. 

Next, the Cosmetic Control Unit ('CCU') was set up to administer regulatory control of cosmetic products, in particular, to ensure that cosmetic products are safe to use, to prohibit the use of certain toxic substances as ingredients in cosmetic products, as well as to ensure that cosmetic products are properly labelled.

The primary activity of CCU is the registration of those cosmetic products which are subject to licensing requirements, ie Category I cosmetic products, namely eye products and lip products. The types of licences for Category 1 products are product licences, import licences and manufacturer's licences. The licences are valid for three years. With effect from 1 January 2000, dealers of oral and dental hygiene products have also been required to obtain licences to import and sell. All other cosmetic products are classified as Category II.

Finally, an Adverse Drug Reaction Monitoring Unit ('ADRMU') was set up at the NPA to collate adverse drug reaction reports on a nation-wide basis for analysis and investigation, and to collaborate with other National Centres, with an ultimate view to help decrease drug-induced reactions locally and internationally. In this regard, an adverse reaction to a drug is defined as any noxious or unintended reaction to a drug that is administered in standard doses by the proper route for the purpose of prophylaxis, diagnosis or treatment. 

The MOH has also appointed an expert panel on adverse drug reaction which comprises experts in the fields of medicine, pharmacy, pharmacology and forensic sciences to act as an advisory panel to the ADRMU. The ADRMU works in collaboration with the panel to recommend procedures and guidelines to the Ministry for the prevention of adverse drug reactions.

As new knowledge about a drug's safety profile is discovered, the NPA assesses the risk and decides on the most appropriate way to manage new risk or new perspectives on a previously known risk.

Governing Legislation 

A myriad of legislation governs pharmaceuticals in Singapore. The Medicines Act and the Regulations promulgated thereunder provide for the control of all aspects of dealings in medicinal and its related products, as well as CPMs. It provides for the licensing of all medicinal products to be sold, manufacturers, wholesalers and importers, so as to help the authorities to ensure the safety, efficacy and quality of medicinal products. It also deals with issues relating to advertisements of medicinal products and CPMs. 

As a corollary to the Medicines Act, the Misuse of Drugs Regulations provides for the possession, supply, import, manufacture and record keeping of controlled drugs to regulate the legitimate use of controlled drugs by professionals. The Sale of Drugs Act (Cap 282) ensures that consumers are supplied with the quantity and quality of drugs demanded by them, explicitly or implicitly. 

The Poisons Act (Cap 234) and the Poisons Rules regulate the importation, possession, manufacture, compounding, storage and sale of potent medicinal substances and toxic chemical substances, so as to prevent accidents arising from their use or misuse. These legislation only come into play if the pharmaceutical product is also a poison. 

On the international front, Singapore has acceded to the Pharmaceutical Inspection Co-operation Scheme ('PICS'). This is an international accreditation and liaison unit, membership of which enhances the status of Singapore as a regional pharmaceutical and life sciences hub. The PICS also facilitates the process of mutual recognition on GMP inspection by PICS countries and enable global acceptance of the quality of pharmaceutical products manufactured and exported from Singapore. 

Singapore is also a party to the 1971 United Nations Convention on Psychotropic Substances, and to the 1961 United Nations Single Convention on Narcotic Drugs. 

The Licensing Requirements

Pharmaceutical products

The import and wholesale of pharmaceutical products is governed by Part II of the Medicines Act. There are four types of licences prescribed:

  1. the product licence,

  2. the import licence,

  3. the wholesale dealer's licence, and

  4. the manufacturer's licence.

Apart from the four types of licences, the Drug Administration Department also issues a Certificate for Exporters of Medicinal Products. Many importing countries require proof of registration of medicinal products in the country of origin before sales are permitted. The Certificate for an Exporter of Medicinal Products is issued by the licensing authority to holders of product licences whose locally manufactured products conform to required standards of quality so as to assist the local manufacturers in export markets.

In addition, a licence may be required under the Poisons Act where the medicinal product is deemed a poison within the Poisons List. A licence issued under the Poisons Act is to be numbered consecutively in the year in respect of which they are issued and a register thereof maintained. 

Product licence

A product licence is issued specifically for a particular medicinal product. A product licence is required before a person can engage in any of the following activities:

  1. sell, supply or export any medicinal product;

  2. procure the sale, supply or exportation of any medicinal product; or

  3. procure the manufacture or assembly of any medicinal product for sale, supply or exportation.

In short, a product licence is required whether a person intends to sell (whether wholesale or otherwise), supply, import, export or manufacture a medicinal product.

The onus of applying for a product licence rests with the entity responsible for the introduction of the product into the Singapore market. This, in the case of an imported product, refers to the manufacturer's local representative or its sole agent, and in the case of a locally manufactured product, the manufacturer of the product. A separate product licence will have to be obtained for each pharmaceutical product that is to be dealt with. 

Import licence 

An import licence is required where a pharmaceutical product is to be imported into Singapore. The import licence must be obtained in addition to the product licence referred to above. This is because import licences only authorise the import of pharmaceutical products into Singapore. An import licence may, however, be obtained by a person who is not a holder of a product licence, to enable him to import any medicinal product for sale or supply where the licensing authority is satisfied that the product is in all respects the same as the product in respect of which a product licence has been granted and which has been entered. 

An import licence for authorised agents is granted when the holder of a product licence has authorised the applicant in writing to import the product. This would be used in situations when the holder of the product licence either cannot (eg has no valid poisons licence) or chooses not to import the product himself. This import licence is not particular to any one product. Thus, the licence may cover a number of different products so long as that agent has been properly authorised to import those products.

An authorised agent applying for an import licence must produce a copy of the authorisation form from the product licence holder when making his application. In addition, the relevant product licence number should appear on the labels and packages accompanying the products.

The validity of an import licence in respect of each medicinal product to be imported is subjected to the continued validity of the corresponding product licence for that product, but will not exceed a period of three years. Any suspension, revocation or variation of the product licence shall equally apply to the import licence in respect of that medicinal product. 

Wholesale licence

A licence is required for the sale of any medicinal product by way of wholesale dealing. The wholesale dealer's licence permits its holder to buy and sell pharmaceutical products in Singapore and to export such products. It does not permit the import of pharmaceutical products. Obtaining a wholesale licence does not, however, do away with the need to obtain a product licence and an import licence (the latter if the product is to be imported into Singapore). 

Manufacturer's licence 

No person can manufacture or assemble any medicinal product except in accordance with a licence issued by the licensing authority. This means that all factories engaged in the manufacture or assembly of medicinal products must obtain a manufacturer's licence. 

Other licensing requirements - Poisons Act and Rules

The legislative provisions governing 'poisons' become relevant to the extent that a pharmaceutical product falls within the statutory definition of 'poisons'. Note that pharmaceutical products fall outside the scope of hazardous substances. 

'Poisons' are defined in the Poisons Act to mean any substance which is specified in the Poisons List in the Schedule thereto. The Poisons List contains a rather lengthy list of poisons; these include ammonia, benzene, hydrogen chloride and sulphuric acid. 

The Poisons Act provides that no person shall import, process for sale, sell or offer for sale any poison without a licence from a licensing officer. The licensing officer is the Director of Medical Services or any public officer authorised by him in writing. In the case of a medical practitioner, only a licence authorising him to import, possess and sell poisons by retail in connection with his own practice or with a practice or partnership in which every member is a medical practitioner can be issued to him.

Rules 13 and 14 of the Poisons Rules should also be noted. These rules spell out certain exemptions from the provisions (including the licensing provisions) of the Poisons Act and the Poisons Rules. Examples of such exemptions include:

Clinical drug trials 

All clinical trials of medicinal products conducted in Singapore require a Clinical Trial Certificate ('CTC') from the NPA. The Medical Clinical Research Committee ('MCRC') was set up by the Ministry to advise on the licensing of clinical drug trials. The MCRC deliberates and reviews new applications for clinical trial certificates, amendments to clinical trial protocols and informed consent documents, serious adverse event reports and requests for CTC extension. 

As a matter of interest, the NPA recently reviewed and updated the Medicines (Clinical Trials) Regulations and implemented the Singapore Guideline for GCP ('SGGCP'). The SGGCP, which was adapted from the International Conference on Harmonisation ('ICH') Guideline for GCP, sets ethical and scientific standards for the conduct of clinical trials. It also serves as an assurance that results obtained from clinical trials are credible.

In addition, an ethical code of practice was drawn up to guide doctors and drug companies on how they should deal with each other. For instance, doctors are discouraged from accepting money from a pharmaceutical company to conduct research or clinical trials if it also means being required to buy the company's products. This code does not, however, have the force of law.

Environmental Issues 

There is a growing concern about environmental issues in Singapore. In relation to the pharmaceutical industry, there are a number of issues that could potentially arise. It will suffice here to state that the concern is greater where a manufacturing facility is established for the manufacture and the production of pharmaceutical products. Where the manufacturing facility of the pharmaceutical products is likely to release waste, including the release of toxic industrial waste or trade effluents, then the manufacturer is required to obtain certain licences.

Economic and Tax Incentives

There are several tax and economic incentives offered to the pharmaceutical industry so as to encourage the growth of this industry within Singapore. These are only listed here, given that it is beyond the scope of an article of this length to discuss this here reasonably. In getting involved in the pharmaceutical industry, it is essential that a detailed study of the various tax incentives must be undertaken before a venture is entered into. These include the following:

Import Procedure 

From a business perspective, apart from licensing issues where pharmaceutical products are to be imported into Singapore, an import permit has to obtained from the Controller of Imports and Exports before the products can be imported into Singapore. The regulatory body in this area is primarily the Trade Development Board.

However, before an import permit can even be obtained, a business entity seeking to import and sell (on a wholesale basis) pharmaceutical products must first be duly registered under the applicable Singapore laws to do business as a Singapore incorporated company, a Singapore branch of a foreign company or a firm/sole proprietorship. The relevant Acts of Parliament are the Companies Act and the Business Registration Act. 

Conclusion

This article has attempted to provide a flavour into the pharmaceutical industry in Singapore. The industry is certainly one that is looked upon very favourably by the Government. To this end, a number of incentives have been provided to encourage the multinational players to set up shop in Singapore. The steps taken have been working, but the industry is still a young one and more will definitely be done.


Kala Anandarajah & Tan Loo Ying
Rajah & Tann