Home » Opinion » Chinese Views
China's policy of inexpensive basic drugs is still a bitter pill
By Tian Ying, Gu Ye and Ni Yuanjin |
May 3, 2011, Tuesday
|
Print Edition
Print Edition
WHEN almost every commodity in China is getting more expensive, some basic subsidized medicines are still cheap and getting cheaper - and some grassroots and community clinics are howling that they can't make money without a markup on drugs.
China published an essential drug list in 2009, covering the 307 most common Western and traditional Chinese medicines, which are heavily subsidized so hospitals can sell them at cost price.
All essential medicines are listed by their generic names, and drug producers compete to supply essential medicines through public procurement.
Due to a long history of low government funding for state-run hospitals, which often covers only 10 percent of the hospitals' operating costs, doctors have generated income for hospitals by aggressively prescribing expensive, and sometimes unnecessary, medicines and treatments.
The essential medicine system and the reform of publicly funded hospitals, two pillars of China's health reform, are designed to address high medical costs and low accessibility of medical services.
Now, the essential medicine system has reduced drug prices, but it still fails to satisfy hospitals, patients and drug producers.
The system requires government-funded grassroots health clinics, including urban community health centers and rural clinics, to prescribe only essential medicines and to sell these medicines at cost price - not with the previous 15 percent mark-up.
Such policies have brought hard times to grassroots health clinics, especially in cash-strapped areas.
Song Wenzhi, a public health professor at Peking University, said, "Grassroots health clinics, without the expertise to perform operations and other treatments, rely heavily on selling drugs," adding that these hospitals have found themselves scraping by due to the zero percent mark-up policy.
Wang Zhiying, vice director of the People's Hospital of Anxiang County in the city of Changde, Hunan Province, said four grassroots hospitals in Changde tested the essential medicine system as pilot projects - but the zero percent mark-up policy took away 60 to 70 percent of the hospitals' revenue.
Wang was quoted by Health News, a newspaper run by China's Ministry of Health, as saying that due to financial difficulties, the county government had not yet channeled the 8 million yuan in support funds into the hospitals' accounts, resulting in the resignations of many doctors.
Pharmaceutical companies are not happy, either. Some argue that the essential medicine procurement system distorts market competition.
Across China, essential medicines are procured by provincial governments through bidding, and distributed to hospitals at all levels.
Some drug producers complain that only companies offering the lowest prices can win bids, thus driving producers of quality drugs out of the market.
Liu Gexin, CEO of Sichuan Kelun Industry Group, a pharmaceutical company, submitted a proposal to adjust the current procurement system of essential medicines during the annual legislative session this year.
Liu said some companies might compromise drug quality to lower production costs. For example, Liu said, Fufangdanshen, a traditional Chinese medicine tablet, has a market price of 5.6 yuan, but the government procurement of Anhui Province prices it at 0.95 yuan.
"The bidding price is significantly lower than the cost of raw materials, supplements and packaging," said Liu, calling for changes in the current tender system that only favors low prices.
The essential medicine system covers 60 percent of government-funded grassroots hospitals and drug prices have fallen by an average of 30 percent, said Sun Zhigang, director of the Health Reform Office under the State Council, or China's Cabinet. According to the health reform plan for 2011, the essential medicine system will cover all government-sponsored health institutions at the grassroots level by the end of the year and drugs will be sold there at a zero percent mark-up.
Song Wenzhi said the key will be the commitment of local governments to health reform and their financial input. This way, essential medicines can benefit the public without bankrupting grassroots health institutions.
(The authors are Xinhua writers.)
China published an essential drug list in 2009, covering the 307 most common Western and traditional Chinese medicines, which are heavily subsidized so hospitals can sell them at cost price.
All essential medicines are listed by their generic names, and drug producers compete to supply essential medicines through public procurement.
Due to a long history of low government funding for state-run hospitals, which often covers only 10 percent of the hospitals' operating costs, doctors have generated income for hospitals by aggressively prescribing expensive, and sometimes unnecessary, medicines and treatments.
The essential medicine system and the reform of publicly funded hospitals, two pillars of China's health reform, are designed to address high medical costs and low accessibility of medical services.
Now, the essential medicine system has reduced drug prices, but it still fails to satisfy hospitals, patients and drug producers.
The system requires government-funded grassroots health clinics, including urban community health centers and rural clinics, to prescribe only essential medicines and to sell these medicines at cost price - not with the previous 15 percent mark-up.
Such policies have brought hard times to grassroots health clinics, especially in cash-strapped areas.
Song Wenzhi, a public health professor at Peking University, said, "Grassroots health clinics, without the expertise to perform operations and other treatments, rely heavily on selling drugs," adding that these hospitals have found themselves scraping by due to the zero percent mark-up policy.
Wang Zhiying, vice director of the People's Hospital of Anxiang County in the city of Changde, Hunan Province, said four grassroots hospitals in Changde tested the essential medicine system as pilot projects - but the zero percent mark-up policy took away 60 to 70 percent of the hospitals' revenue.
Wang was quoted by Health News, a newspaper run by China's Ministry of Health, as saying that due to financial difficulties, the county government had not yet channeled the 8 million yuan in support funds into the hospitals' accounts, resulting in the resignations of many doctors.
Pharmaceutical companies are not happy, either. Some argue that the essential medicine procurement system distorts market competition.
Across China, essential medicines are procured by provincial governments through bidding, and distributed to hospitals at all levels.
Some drug producers complain that only companies offering the lowest prices can win bids, thus driving producers of quality drugs out of the market.
Liu Gexin, CEO of Sichuan Kelun Industry Group, a pharmaceutical company, submitted a proposal to adjust the current procurement system of essential medicines during the annual legislative session this year.
Liu said some companies might compromise drug quality to lower production costs. For example, Liu said, Fufangdanshen, a traditional Chinese medicine tablet, has a market price of 5.6 yuan, but the government procurement of Anhui Province prices it at 0.95 yuan.
"The bidding price is significantly lower than the cost of raw materials, supplements and packaging," said Liu, calling for changes in the current tender system that only favors low prices.
The essential medicine system covers 60 percent of government-funded grassroots hospitals and drug prices have fallen by an average of 30 percent, said Sun Zhigang, director of the Health Reform Office under the State Council, or China's Cabinet. According to the health reform plan for 2011, the essential medicine system will cover all government-sponsored health institutions at the grassroots level by the end of the year and drugs will be sold there at a zero percent mark-up.
Song Wenzhi said the key will be the commitment of local governments to health reform and their financial input. This way, essential medicines can benefit the public without bankrupting grassroots health institutions.
(The authors are Xinhua writers.)
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
