Singapore is ranked among one of the most open economies in the world, and remains a popular destination for companies using the country as a trading base for the South East Asian region. While it may not be the cheapest place to do business in the region, it offers incentives such as low corporate tax rates and strong intellectual property laws.

The manufacture of pharmaceuticals is dominated by multinational companies. The government has indicated that it wants at least ten multinational manufacturing facilities operational in Singapore by 2010. The majority of what little domestic production takes place is intended for export overseas, particularly to Europe and the USA.

The country has invested heavily in the development of the biomedical industry and related support industries in recent years in order to attract foreign investment and build its research capabilities. This has paid off, as it has pulled major companies such as Merck Sharp and Dohme, Pfizer, Aventis and Novartis who now have manufacturing facilities in the country. Investment in biomedical manufacturing has increased steadily each year. In 2006 alone, investments totalled US$567.4 million, a 10% year-on-year increase.

The country's novel drug discovery capability is slowly taking off, with the help of western pharmaceutical companies. In September 2007, MerLion Pharmaceuticals announced it had commenced Phase One clinical trials for a novel antibiotic called finafloxacin.

The country exports more pharmaceuticals than any of the Asian Tiger economies by a significant distance, although the majority of this total is from re-exported goods.

The new ‘Health Products Act 2007' should improve regulatory practice for both medical devices and pharmaceuticals. Amendments to the Medicines Act have been made in a bid to ensure greater protection of pharmaceutical patents.