China to assume govt control over vital drugs

By Hu Yinan (China Daily)
Updated: 2009-04-08 09:34

Creating a "proactive, reasonable" rule of the game is crucial to the success of China's first basic medicine system, a core element in the new medical reform that aims to cut drug costs, experts have said.

Announcing a reform scheme yesterday, China said the new system will include a catalogue of necessary drugs to be produced and distributed under government control by 2011, to ensure everybody has equal access to essential medicines.

The public, especially socially vulnerable groups, have suffered under the current public healthcare system. Hospitals and clinics now are forced to generate profits - mostly through non-negotiable price hikes - after major funding cuts from the central government.

The blueprint says public health institutions will receive more subsidies and be supplied with essential medicines with prices regulated by the government. They will be banned from profiting through subscribing expensive medicines.

But Gu Xin, a key drafter of the blueprint and national medical policies professor with the Beijing Normal University, warned that establishing a catalogue alone will not be enough to curb existing medical malpractices.

"The key is to regulate the drug prescription process of medical institutions, and create a rule of the game by which they will prescribe drugs in a proactive and reasonable way," he said.

"It remains unclear whether what we've incorporated into the scheme is enough. We need to explore all localities actively," Gu said.

About half the income of China's general hospitals comes from price differences of the drugs they sell to maintain operation, according to official figures.

Doctors are under pressure and often forced to make money instead of offering affordable and essential drugs to patients, said Wang Hufeng, a professor with Renmin University of China's health reform and development center.

Simplifying the distribution process of drugs, a major obstacle in the way of medical reform and a key factor, can never be as easy as "plug-and-play", he warned.

It takes more than a scheme to change the mindsets of vested interest groups of drug distributors and producers, who have long joined hands, Wang said.

Drug pricing in China currently falls on the jurisdiction of several departments, including the National Development and Reform Commission (NDRC) and the State Food and Drug Administration.

In the 1980s, China launched market-oriented reforms. Public hospitals were encouraged to make their own incomes with the aim of mobilizing medical workers and improving hospital efficiency.

To stem rising public complaints about medical costs, the NDRC has capped the cost of hundreds of drugs over the years.

However, critics argue the price cuts have not been the cure since drug manufacturers often change the name and packaging of their drugs to escape price controls.

Xinhua contributed to the story