China to stop setting
most medicine prices from June 1
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[May 05, 2015]
BEIJING (Reuters) - China will
remove price caps for most medicines from June 1 and give the market a
larger role in setting prices in the world's second largest
pharmaceutical market, the country's economic planning agency said on
Tuesday.
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The change would encourage "reasonable" pricing of medicines and
help control costs in the country's state medical insurance schemes,
the National Development and Reform Commission (NDRC) said in an
online statement .
"We have decided from June 1 to cancel government-set prices on most
drugs to improve purchasing mechanisms for drugs, control costs for
medical insurance and allow the trade price of medicines to be set
by market competition," it said.
China is a magnet for drugmakers, medical device firms and hospital
operators with spending on medicines set to hit as much as $185
billion by 2018, according to IMS Health.
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Beijing has also been stepping back from caps on consumer drug
prices but faces a tough task to ensure steady supplies of vital
medicines at the same time as keeping prices low.
Analysts say the impact of the NDRC's move will be muffled because
around three-quarters of drugs in China are sold through hospitals
rather than through retail channels, where a separate tender process
helps keep prices down.
The new move will affect all drugs apart from anesthetics and grade
one psychiatric medications, the NDRC statement said.
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China removed price caps on a limited number of drugs in April last
year after criticism that its controls had caused shortages of a
number of critical drugs used by millions of patients to treat
hyperthyroidism and other ailments.
President Xi Jinping has made a priority of providing affordable,
accessible healthcare in a country struggling with rising healthcare
costs, long waits for care and lapses in medicine safety.
(Reporting by Judy Hua and Koh Gui Qing in BEIJING and Adam Jourdan
in SHANGHAI; Editing by Simon Cameron-Moore)
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