Chinese Premier Wen Jiabao Allocates Healthcare Investment, But Essential Drug List Delayed Again
This article was originally published in PharmAsia News
Executive Summary
SHANGHAI - China's State Council issued additional healthcare reform plans July 8 to detail the goals of the country's ambitious reform plan. However, the release of the long-awaited essential drug list will be delayed to the end of this year, which was expected to be issued by June
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SHANGHAI - China's State Council issued additional healthcare reform plans July 8 to detail the goals of the country's ambitious reform plan. However, the release of the long-awaited essential drug list will be delayed to the end of this year, which was expected to be issued by June. State Council Premier Wen Jiabao announced eight tasks for this year, which include expanding coverage of the basic medical insurance to include 390 million citizens in 2009. As one of the tasks, China will release the essential drug list by the end of this year and implement the essential drug system in 30 percent of government-run community health centers. The essential drugs listed in China are those that are low in price, have a long history of use and have been proven to be safe and effective. The provincial government will establish a bidding system to centralize purchase of the drugs. The drugs on the list, including Traditional Chinese Medicines, will be covered by medical insurance and granted a higher-use rate in government-controlled health institutes. Deputy Minister of Health Ma Xiaowei previously announced the essential drug list would be released by the end of April (Also see "China Issues Three-year Healthcare Reform Plan To Invest RMB 850 Billion" - Scrip, 8 Apr, 2009.). The release of the essential drug list is delayed by a number of unresolved issues, Gao Huijun, director of Shanghai FDA's Institute for Food and Drug Safety, said in an earlier interview with PharmAsia News. For example, many TCMs have a single supplier, which raises supply chain concerns if TCMs on the list have only one manufacturer. MOH announced May 11 a working committee to resolve conflicts that arose while drafting the essential drug list (Also see "China Establishes Essential Drug List Committee To Deal With Conflicts Of Interest" - Scrip, 14 May, 2009.). The government will also focus on increasing medical staff and upgrading hospitals this year. In an effort to reduce drug prices, hospital adjustment fees - tied to a drug's original price - will be replaced by a medical services fee, which has little bearing on a drug's cost. The government hopes the new fee system will decrease the incentive for doctors to over-prescribe higher-priced drugs as profit engines for hospitals (Also see "China Nixes Hospital Adjustment Fees As Measure To Reduce Drug Prices" - Scrip, 15 Jan, 2009.). As one of the tasks, the state council said it will keep efforts to launch nine public medical service initiatives and raise government financial support to each resident to no less than RMB 15 from RMB 3. China's Ministry of Finance announced July 6 a RMB 10.4 billion ($1.52 billion) investment to support the initiatives in 2009. Earlier this year, the ministry injected RMB 2.53 billion ($370 million) to launch six services, which include hepatitis B vaccination for children between ages 8-15, free eye surgery for poor cataract patients and free early breast cancer and cervical cancer testing to women in rural areas. "The budget is about 15 RMB per citizen per year, so I believe the vaccine market will grow at a normal rate and local manufacturers will benefit from it." Hans Yuan, an analyst from global consulting firm Frost & Sullivan, told PharmAsia News. Frost & Sullivan consultant Fang Chunqian predicts the vaccine market will lead the pharmaceutical industry in China and globally with a compound annual growth rate of 14-15 percent (Also see "Vaccine Market Will Lead Pharmaceutical Industry In China And Globally, Frost & Sullivan Predicts" - Scrip, 6 Jul, 2009.). MOH also announced a RMB 100 billion ($14.6 billion) government investment to upgrade 2,000 county hospitals, 5,000 medical institutes and 2,400 district-level medical service centers by 2011. The ministry plans to centralize the purchase of upgraded medical devices for the hospitals and issued guidelines to list the standard equipment requirements for the different levels of medical institutes. "The main purpose [of centralizing purchases] is to cut down purchasing price. … The government invites device experts to give scores on each product, and the product with highest score wins." Yuan said. According to Yuan, the purchasing system was established many years ago, and therefore it will not have a strong impact on MNCs. - Dai Jialing ([email protected]) |