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State Caps Prices on Scores of Medicines

Amid mounting complaints about exorbitant drug prices, on Monday state pricing authorities mandated new price caps on several hundred types of medicines. Prices of more than 400 pharmaceuticals have been cut by an average of 30 percent from previous caps set by the government in 2001.

The State Development and Reform Commission said the move is designed to save consumers 3.5 billion yuan (US$422 million). The commission is authorized to set prices on medicines and services that are identified as meeting basic needs.

China Daily reports that according to a commission official, the latest price cuts are designed to battle irregularities in the purchasing and sales of medicines.

The lower prices were determined after consulting pharmaceuticals makers, marketing sources, doctors and consumers, said the official, who declined to be identified. "We will continue to cut the prices of basic medicines on the government's medical care list because there is still room for more."

But the commission admitted that the government's efforts to reduce "unreasonably high medicine prices" since 1997 have not been very successful, although it has imposed several rounds of price cuts.

In the past, prices were reduced only for antibiotics, so only a few patients benefited. In addition, hospitals and pharmacies intentionally avoided selling medicines with price caps, sometimes nullifying the government's actions.

Some people, especially those who are not covered by medical insurance, remain skeptical about the effectiveness of this round of price cuts.

"I am not sure, because they always make these efforts but medicines and medical services are still too expensive for common people," said Jiang Jing, a 56-year-old laid-off worker who lives in Beijing's Xicheng District.

Jiang, who receives no medical benefits, said he is afraid of getting sick.

"You know, if I catch cold and buy medicine from a hospital, I will spend at least 200 yuan (US$24) each time," Jiang said, noting that the amount is nearly half of his monthly unemployment benefit.

Complaints and fears like Jiang's are the result of overcharging by hospitals, which often do under-the-table deals with drug vendors.

A recent irregularity that made headlines occurred at Beijing's No. 6 People's Hospital, which illegally allowed pharmaceuticals vendors from a joint venture producer to sell highly priced products there.

The China News Agency reported that a bottle of a nutritional supplement originally priced at 30 yuan (US$3.60) was sold to a patient with diabetes for 380 yuan (US$45.70). In a tragic twist to the case, the drug caused the woman to die on March 28.

Although the government has frequently reiterated that hospitals should not overcharge patients, some facilities continue to raise prices for medicines, medical services and disposable products for medical use, according to a commission circular released Monday.

To relieve patients' financial burdens, the government has fixed the maximum prices of more than 1,000 types of medicines, and, since October 1997, reduced fixed prices on 10 occasions. In doing so, it expected to save patients 18 billion yuan (US$2.2 billion).

The commission said that pricing administrations at various levels should continue examining the prices of medicines and medical services, and punish violators by giving warnings, confiscating illegal incomes, imposing fines and revoking licenses.

The commission official said the government is exploring new ways of regulating medical prices within the framework of a market economy.

To resolve existing problems, medical treatments and drug sales should be managed separately, and the medical insurance and legal systems improved.

(China Daily June 1, 2004)

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