Medicines get prescription to open up China's market

(China Daily)
Updated: 2009-03-18 11:57

The government will introduce a mechanism for market competition into public hospital reform and establish a system for basic medicines under a reform plan likely to be announced this week, an authoritative source said.

Bottles of herbal extract, seen here in August 2003, are displayed at the Hong Kong Convention and Exhibition Center. [Agencies]

Aimed at providing universal medical service to 1.3 billion people, the reform plan focused on medical insurance, basic medicine, grassroots medical service, public health service and public hospital reform.

Under the plan, the government would purchase basic medicines by inviting public bidding.

"Purchasing medicine through public bidding reflects the market competition principle," said Zhu Hengpeng, the institute of economics researcher of the Chinese Academy of Social Sciences.

The basic medicine system includes a list of basic medicines which the central government encourages local hospitals to prescribe.

The National Development and Reform Commission released the medical reform draft plan on its website for public debate in October, and had received about 200,000 suggestions as of January.

Many people criticized the draft plan as being "too general" and "full of empty principles".

"More than 130 changes have been made in the draft plan scheme, which include the deletion of some too general statements and addition of some guiding regulations," Guangzhou-based newspaper 21st Century Business Herald yesterday quoted an anonymous authoritative source as saying.

However, not everyone is behind the plan to open up medicines to the market.

"I don't think the market competition mechanism, like inviting bid, will help lower the high medical fees," a senior officer of the National Health Industry Enterprise Management Association told China Daily yesterday on condition of anonymity.

He said inviting market competition could not reduce the current high cost of medicine that includes various fees charged during the whole cycle from production to sale.

Some kind of antibiotics may be sold for 1,000 yuan even though the production cost was just few dozen yuan, he said.

The original draft scheme designates the pharmaceutical enterprises and the formulate unified medicine price and distribution.

"The draft plan would lead to China's pharmaceuticals production and distribution system lapsing back into the planning economic years," Zhu said in the report.

"The planned medicine purchase and sale will result in administrative monopoly and commercial bribery," he said.

The revised plan has changed "the nation formulates unified basic medicine's retail price" into "the nation formulates basic medicine's guiding retail price" within which range the provincial government decides its local unified procurement price.