China standardizes purchases of essential drugs to ease costs burden of residents

08:46, December 13, 2010      

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China will standardize the purchase of essential drugs at government-funded grass-root hospitals and clinics, in a bid to reduce patient health-care costs, an official statement said Thursday.

Provincial-level platforms for the centralized procurement of essential drugs would be established to seek procurement tenders from producers, said a statement on the official website of China's central government.

Widely used essential drugs should be purchased directly from the pharmaceutical firms, while less commonly prescribed medicines could be ordered from drug wholesalers.

In China, due to longstanding low government funding for state-run hospitals, which in many places only covers 10 percent of operating costs, doctors often aggressively prescribe expensive, sometimes unnecessary medicines and treatment, in order to make profits for the hospital.

The implementation of essential medicines system has meant the price of certain prescription drugs would be reduced.

In an effort to ensure better and cheaper health care, authorities are asking hospitals to sell drugs at prices equivalent to costs.

Centralized procurement of drugs at government-run medical institutions was introduced to bring down drug prices from the supply end and lower price of medicines for patients.

Drug producers who put in procurement tenders could be "punished" if found guilty of fraud, manipulation of drug prices, or bribery, but no details of the penalties were given, the statement said.

Essential medicines are those available to the public at all times in adequate amounts and in appropriate dosage forms, at a price the public can afford.

In August 2009, China started to promote the Essential Medicine System in an effort to ensure universal basic health care. The system covers more than 30 percent of government-run grass-root hospitals and clinics.

Average medicine prices had been cut by 20 to 50 percent in areas where the system was implemented, according to the Health Ministry.

Further, the State Food and Drug Administration was urged to improve the national drug digital monitoring network and tighten monitoring of all essential drug products, said the statement.

This move would be helpful in tracing the manufacturers and distribution scope of each drug product.

Starting from April 1, 2011, government-run hospitals will be prohibited from purchasing essential drugs that are not covered by the digital monitoring network or bear no standard digital codes, it added.

Source:Xinhua
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