China health reform must tackle medicines pricing and markups

China’s medical care reform will enter a very difficult stage in the coming years.

Authorities must distribute the resources more fairly. But this is also related to the interests of some parties in the fields of medicine production and sales.

For example, the medicines sold and prescribed by public hospitals are all purchased under a provincial-level collective purchasing system. Hospitals can sell the medicines up to 15 percent higher than the collective purchasing prices.

Even after China lowered medicine prices in the collective purchasing system more than 20 times in the past 10 years, medicine prices in some public hospitals remain high.

The collective purchasing system gives the bargaining rights to the buyers. But most buyers, who are representatives of hospitals, are reluctant to exercise those rights.

The hospitals profit from the 15 percent price increase from the benchmark prices. So the purchasing representatives have enough reasons to keep the collective purchasing prices high.

All parties benefit from the deal, except the patients.

China must deepen the medical care reform by changing the medicines pricing mechanism. That would benefit patients and lower the costs of medical care.

Read more: China Daily