BEIJING, June 1 -- China issued eight guidelines
yesterday to further regulate drug prices and to crack down on malfeasance as
part of a national campaign to promote more affordable medical services for the
people.
The guidelines, drafted by the National Development
and Reform Commission and seven other government departments, stipulated a
profit cap of 15 percent for non-profitable medical service providers such as
public hospitals on the drugs they buy from distributors.
At present, although hospitals are allowed to raise
prices of drugs they purchase from the distributors by 15 percent, doctors will
further hike the retail prices by another 20 to 40 percent as their kickback.
The guidelines also call for setting drug prices by
checking and ratifying factory prices. A pilot program will be launched on
selected drugs, it said.
The government is now mostly involved in setting
retail prices.
In addition, pharmaceutical makers will be required
to display the suggested retail prices on drug packages based on reasonable
profit margins.
"The guidelines will help reduce the drug prices and
eliminate popular practices among drug distributors and some doctors who make
quick and huge profit and hurt the interests of the patients," said Wang
Youhong, an analyst with Haitong Securities.
For some new drugs, the makers get 20 percent of the
profit, the distributors 40 percent and the hospital and doctors take 40
percent.
Wang said the guidelines aim to slash excessive
profit in drug distribution and also help protect the makers which face rising
costs of raw materials.
"The guidelines are good news as it helps squeeze
unreasonable costs in the distribution process," said Helen Bao, an official
with Pfizer Investment Co Ltd. "However the key is to fill the loopholes in the
medical system and expand medical insurance."
The guidelines also said the government will
intervene over the high costs of medical equipment and reasonably adjust medical
services pricing.
(Source: Shanghai Daily)
