Chinese drug market bracing for a boost

Dhaka,  Mon,  21 August 2017
Published : 17 May 2017, 15:02:36
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Chinese drug market bracing for a boost

The Chinese drug market began to shrink after 2011 alongside the rollout of public health insurance, which covers up to 80 per cent of the cost of selected drugs, according to a global media report Wednesday.

The system includes a tendering process in which companies and provincial governments negotiate prices. Since then, prices have fallen as each province uses the lowest price established elsewhere as the starting point in negotiations.

In the past year Beijing has rolled out policies banning state hospitals, responsible for more than 80 per cent of pharmaceutical sales, from padding the price of the drugs they distribute.

Underfunded hospitals make up that lost revenue by seeking to buy drugs for less than the prices set by provinces, making the policy an incentive to negotiate the price to go downward.

The reform does have a bright spot for the drug companies - the state co-payment cuts costs for patients, making drugs covered by the programme affordable to a wider group.

- SZ
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