The Chinese government on Thursday announced it will standardize the purchase of essential drugs at government-funded grassroots medical institutions to reduce people's financial burdens.

A statement on the central government website said new measures will ensure a transparent purchasing system of essential drugs, including the establishment of a nationwide market, price control of drugs under government supervision and restrictions on pharmaceutical firms.

Online provincial-level platforms for centralized procurement of essential drugs will also be established to curb rapidly rising drug prices. In addition, widely used essential drugs will be purchased directly from pharmaceutical companies, while less commonly prescribed drugs can be ordered from drug wholesalers.

Essential drugs, according to the definition of the World Health Organization, are those that satisfy priority healthcare needs.

"The 15 measurements aim to ensure high quality, reasonable prices and timely supply of drugs, and let people enjoy the benefits of the medical reform," said an unnamed leading official from the Medical Reform Office of the State Council.

In the 1980s, China launched market-oriented medical reforms and hospitals were encouraged to make money with the aim of mobilizing medical staff and improving hospital efficiency.

Longstanding low government funding for public hospitals has resulted in doctors' prescribing expensive and sometimes unnecessary medicines to patients in order to make profits for the hospital.

Lu Xiuqin, who lives in Nanjing, capital of East China's Jiangsu Province, spent 500 yuan (US$75) to treat a cold in November.

"I hope that these measures will take effect," she said. "You know when you are ill and you still have to worry about medical costs, that feels really bad."

In August 2009, to reduce rising public complaints about high medical costs, China started to promote the essential medicine system in an effort to ensure universal basic healthcare. The system covers more than 30 percent of grassroots hospitals and clinics funded by the government.

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

"But medicine bids and procurements require strong supervision," said Xiao Yonghong, chief physician of the No 1 Hospital affiliated to Zhejiang University. "Time will prove whether the measures are effective or not."

Drug producers involved in illegal activities, such as manipulating drug prices and bribery, will be punished, according to the statement. But no details of the penalties were given.

(China Daily December 11, 2010)