Pharmaceutical Policy In China

Abstract

Contradictory goals plague China's pharmaceutical policy. The government wants to develop the domestic pharmaceutical industry and has used drug pricing to crosssubsidize public hospitals. Yet the government also aims to control drug spending through price caps and profit-margin regulations to guarantee access even for poor patients. The resulting system has distorted market incentives, increased consumers' costs, and financially rewarded inappropriate prescribing, thus undermining public health. Pharmaceuticals account for about half of total health spending in China, representing 43 percent of spending per inpatient episode and 51 percent of spending per outpatient visit. Yet some essential medicines are unavailable or of questionable quality. [Health Affairs 27,no. 4

Ongoing initiatives to improve prescribing efficiency in China; statins as a case history

“…For state-priced products, the National Development and Reform Commission (NDRC) sets maximum retail prices (price cap) including mark-ups; for province-or municipality-priced products, the price management department determines the retail prices. For other products, retail prices are determined by the manufacturers (29,35,42,43). For instance, the NDRC has implemented 28 price adjustments between 1997 and 2011 to address high prices for common or expensive medicines such as cardiovascular drugs or anticancer drugs (29,44).…”

“…There were reforms introduced in 2007 -the 'Prescription Management Ordinance' -specifying that prescriptions should be written by generic (INN) name. However, to date there has been limited enforcement (29,43). As a consequence, physicians tend to write prescriptions with the generic (INN) name and simultaneously indicate the brand or manufacturer's name; alternatively, they simply choose medicines listed in hospitals' information technology (IT) systems with the corresponding brand name or manufacturer (29,43).…”

From one to many central plans: Drug advertising inspections and intra-national protectionism in China

“…Drugs account for around half of total health spending in China (Sun et al, 2008), three times the share in OECD countries and twice that in other middle-income countries (Meng et al, 2005). It is however widely observed that this large domestic market is severely fragmented by various forms of local protectionism.…”

“…The difficulty of promoting sales in a nonlocal market, together with the fierce competition from a large number of small and medium-sized enterprises producing generic over-the-counter drugs (Clark, 2007;Sun et al, 2008), represent major motivations for firms to engage in advertising (Xinhua News, 2004), making the pharmaceuticals industry "one of the highest spenders on advertising in China" (Deloitte, 2011, p. 22). On a practical level, drug producers in China are required to obtain licenses from the respective provinces in order to advertise in any official media outlet in these regions -including television, radio, newspapers, and billboards on commercial vehicles (Deloitte, 2011).…”

Establishment of a Reformed Chinese-English Bilingual Teaching System of Pharmacology in Tianjin University of Science and Technology, China

“…In nowadays, the number of China's drug manufacturing firms is more than 5,000. 1 The pharmaceutical processing capacity has ranked first in the world, and the production of chemical raw materials and intermediates has ranked second worldwide. The production of chemical raw materials has been up to more than 1,300 varieties, and the total annual output has been more than 800,000 tons, of which nearly 50% was exported to abroad, accounting for 25% of the world trade.…”