A new regulation on prescription management will take effect on May 1, to stem the practice of doctors receiving kickbacks from pharmaceutical companies by prescribing expensive and unnecessary drugs to patients, the Ministry of Health (MOH) said.

The regulation stipulates that doctors use the generic names of drugs in their prescriptions instead of the brand names to avoid commissions, said MOH spokesman Mao Qun'an on Monday at the ministry's monthly briefing

The generic name of a drug indicates basic components.

Drugs with similar components may be produced by different drug companies and sold under various brand names and at varied prices in China.

This has led to a loophole where hospitals can stock and doctors can prescribe drugs with more profitable margins.

Under the new regulation, medical institutions will be restricted to offering patients the same type of drugs from no more than two pharmaceutical companies. With clearer and more standardized prescriptions, a patient's right of free choice will be fully respected. A patient will also be able to buy medicines at drug stores at fair prices, Mao said.

(China Daily March 14, 2007)