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China Considers Reform to Lower Drug Costs

China is considering establishing a system that will ensure accessibility to a range of basic medicines and prevent manufacturers from circumventing existing price controls.
The system would include a catalogue of basic drugs that would be produced and distributed under government control and supervision, Mao Qun'an, a spokesman for the Ministry of Health, told a press briefing Monday.
Mao said the catalogue could include 300 to 400 basic drugs covering 80 percent of the most prescribed medicines and "greatly lower the burden of people's medical expenditures."
Since the late 1970s and early 1980s, the central government has reduced its health care funding resulting in deficits for public health institutions and a significant drop in the number of people covered by health care.
This forced hospitals to generate their own revenue by aggressively selling drugs and extra services, driving up the health care costs.
To stem the tide of rising public complaints about high medical costs, China's National Development and Reform Commission (NDRC) has capped the cost of hundreds of drugs.
However, critics argue that the cuts have not been the cure since drug manufacturers often change the name and packaging of their drugs to escape the price controls announced by the NDRC.
Some hospitals and clinics have also turned a blind eye to government price caps and have refused to prescribe lower priced alternative drugs.
China's Health Minister Gao Qiang said earlier in his 2007 work report that the Health Ministry believes that the catalogue of basic drugs should be complied with the principle of "safety, effectiveness, necessity, and low cost".
The Health Ministry also called for tightened control on the production, distribution, and pricing of drugs to guarantee their accessibility.
Drug pricing falls within the jurisdiction of several Chinese state departments, including the NDRC and the State Food and Drug Administration.

(Xinhua News Agency February 13, 2007)

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