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Has the Health Ministry’s Lax Governance Contributed to Sky-High Milk Formula Prices?

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ELSON: Companies do what companies do – make profits. So you can’t really blame infant formula firms for aggressive marketing tactics, or jacking up prices (120 percent over the past 10 years) when they see the opportunity is ripe.

On the other hand, one function of government is to set regulations and keep private firms in line for the betterment of society on the whole. The recent findings by the Competition Commission of Singapore seriously cast doubts on the Health Ministry’s governance of milk formula firm’s interactions with hospitals.

It’s been found that between 2010 and 2014, the amount such firms spent on marketing increased 42.4 percent. Much of this has to do with money channelled towards hospitals, especially private ones.

What exactly is this money spent on? The Commission found that it went into things like hospital dinner and dance functions, shuttle buses for staff, “rotation fees” so hospitals keep their brand in the milk rotation systems for longer periods, and discharge gift bags.

The whole point of firms getting into the good books of such medical institutions is to gain a first mover advantage – get the kids hooked and mom’s comfortable so they’ll stick to their brand.

But as outlined in the Sale of Infant Food Ethics Committee Singapore’s code of ethics, no financial inducements are allowed to be offered to hospitals, clinics and retail pharmacies to promote such milk formula products. And, it is compulsory for all companies operating in the baby food industry in Singapore to follow these guidelines.

The Health Promotion Board says it is now reviewing those guidelines.

Currently, the Health Ministry does not allow public hospitals to enter into such arrangements with milk formula firms. But, it has not applied this rule to private hospitals. And what more, private clinics which are parents’ first point of contact during pregnancy, and for follow-ups after the birth of their children?

Guess what, that more babies are born in private than public hospitals. Backing up its statement with stats, the Commission said 59.2 per cent of births occurred in private hospitals in 2014.

Does does the Health Ministry have the power to make sure sure private hospitals and clinics toe the line, just as public hospitals do when it comes to ethical guidelines?

And if it does, has its lax governance of the milk formula industry’s “you scratch my back and I’ll scratch yours” interactions with such medical institutions resulted in rising costs for consumers?

Corporate sharks do what they will when they smell blood even at the expense of consumers. It’s up to government bodies to rein them in, in the interest of the public.

 

 

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