China Cuts Drug Prices

The Chinese government has set new price regulations for pharmaceutical drugs. This new price cut comes amid the country’s attempt to overhaul the health-care system. The Wall Street Journal reports: Retail-price cuts averaging 17% will take effect Oct. 8 for 95 oncology, immune-system and blood-related drugs and 200 formulations, the National Development and Reform Commission, China’s main economic planning agency, said on its website Tuesday. The overhaul of the health-care system aims to make doctor visits and pharmaceuticals more accessible and affordable, expanding the national health-insurance system to cover more diseases and to apply price controls to more drugs in the future. Of every 100 deaths in China, 85 are now caused by chronic diseases, such as cancer, according to China’s Ministry of Health. By comparison, the U.S. rate is 70 per 100, according to the U.S. Centers for Disease Control and Prevention, and the world-wide rate is 63 per 100, according to the World Health Organization. The government offers reimbursement of up to 50% for the 95 drugs on the list. This is only the most recent price cut in pharmaceutical drugs. According to Business Week, China has cut prices more than 20 times since 2000: The price cuts, effective October 8, comes as China seeks to rein in the rising cost of health care for its aging population. Policy makers are also expanding national health insurance coverage to include more major diseases, and adding to its list of essential drugs, for which prices are controlled by the government, Health Minister Chen Zhu said yesterday. “This latest move was in-line with past drug price cuts of about 18 and 19 percent, so the market would see this as quite reasonable,” said Gideon Lo, an analyst with Nomura Holdings Inc. in Hong Kong. China has cut the price of drugs ...
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One Response to China Cuts Drug Prices

  1. Andao says:

    Hospitals make a huge huge portion of their money on medicine sales. If they aren’t allowed to adjust drug prices, and they aren’t allowed to raise doctor salaries, the quality of service will tank. Unless they also plan on greatly increasing funding to hospitals?