China unveils pilot "group-buying" plan to cut drug prices

China has unveiled a pilot medicine procurement program to be tried in 11 major cities to lower drug prices and reduce the burden on patients.

Details of the program were released by the General Office of the State Council Thursday.

As a major reform of the current centralized procurement system, the program asks public hospitals in the pilot cities to purchase 60 to 70 percent of their total annual demand for certain medicines in order to get a lower price.

Previously, the bidding usually only determined the price, but could not guarantee the purchase quantity.

The pilot program aims to cut drug prices, reduce medicine costs for patients and transaction costs for enterprises and improve the "ecology" of the pharmaceutical industry, said the official document.

The 11 cities, including Beijing, Shanghai, Guangzhou and Shenzhen, account for about one-third of the national medicine market.

The prices of 25 generic drugs have dropped by an average of 52 percent thanks to the program, according to the State Medical Insurance Administration.