Struggling to control rising drug prices, China is pining hopes on a "basic medicine system" to quell public complaints of limited accessibility of medicines.

"High drug prices are the major reason for high medical expenses. The key to this problem is to set up a basic medicine system," China's Health Minister Gao Qiang told reporters on the sidelines of the ongoing parliamentary session.

The system, which includes a catalogue of necessary drugs that would be produced and distributed under government control and supervision, can help ensure the accessibility to a range of basic medicines and prevent manufacturers and business people from circumventing existing price controls, Gao said.

In the late 1970s and early 1980s, the central government reduced its health care funding, resulting in deficits for public health institutions. This move forced hospitals to generate their own revenue by aggressively selling drugs.

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 price cuts have not been the cure since drug manufacturers often change the name and packaging of their drugs to escape price controls.

Some hospitals and clinics have also turned a blind eye to government price caps and refused to prescribe lower priced alternative drugs.

Gao said disorders are seen in the drug production, distribution and use, which not only cause high drug prices but also upset the public. "I myself am also very dissatisfied."

He said the catalogue can be set up on the basis of 300 to 400 drugs that recommended by the World Health Organization every year.

"The government must take actions to tighten control and supervision of the production, purchasing and distribution of the drugs to ensure that they are safe and sold at affordable prices," he said.

Drug pricing in China currently falls with the jurisdiction of several departments, including the NDRC and the State Food and Drug Administration.

(Xinhua News Agency March 7, 2007)