China Ready for Drug Pricing Reform.docVIP

China Ready for Drug Pricing Reform The biggest reform of Chi- na’s medicine retail sector seems ready to roll out. The National Development and Reform Commission（NDRC）， China’s planning agency， has prepared a draft law for review by the industry. According to the draft， restriction on price ceilings of 280 Western medicines and 250 Chinese patent drugs， previously priced low by the government to relieve patients’ medical bur- den， will be lifted， allowing producers to set prices according to their production costs. Prices of more than 2700 drugs will soon be determined by the market， industry sources said earlier. NDRC announced that the retail price cap of low-cost medicines is set to be scrapped to revive dampened production caused by weak profits and ensure supply of essential drugs. The draft had caused heated discussion in the industry. Chang Feng， director of the medicine price research department under China Medical University， said that the move， allowing the market to play a bigger role in deciding prices， will help motivate low-price medicine production and guarantee necessary supply. Unexpectedly， some pharmaceutical corperations’ response to the deregulation has been underwhelming. A securities trader says that it is because direction of the reform is still ambiguous， especially on the purchasing through collective bidding system， which effects drug prices the most. All in all， only the less-acceible and less-competitive sectors， blood products for instance， will be benefiting from the policy changes. “The reform won’t be carried out properly or achieve anything unless the governement abolish the collective bidding system and delegate the purchasing power to hospitals.” said Yu Mingde， President of China Pharmaceutical Enterprises Association. Yu also said that to scrap the price cap doesn’t mean the government will totally let go of the industry. For example， drugs that are covered by national medical insurance fund will still be priced by the departme