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The Medical Drug Market and its Reforms

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Healthcare Reform in China

Abstract

China is the second largest pharmaceutical market in the world. This sector grew by 21.4% between 2002 and 2012. In OECD countries, spending on medical drugs accounted for approximately 17% of total health spending or 1.5% of gross domestic product (GDP) in 2009. That same year, spending on pharmaceutical products in China represented 43% of the total healthcare expenditure. Aware of the issue, the Chinese government has reacted. A limitation on the hospital mark-up on drugs has been implemented and a list of key drugs that are considered essential has been set up. Drugs on this list have to be accessible to everyone, with a regulated price to be kept as low as possible. To keep prices low, procurement is made through centralized bidding at provincial level, pharmaceutical companies delivering directly to medical facilities. Yet, in the field, the reality remains at times complex, with different ways to circumvent these constraints.

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Notes

  1. 1.

    OECD , Value for Money in Health Spending, Paris: OECD Health Division, 2010.

  2. 2.

    Winnie Chi-Man Yip, William C. Hsiao, Wen Chhen, Shanlian Hu, Jin Ma, and Alan Maynard, “Early Appraisal of China’s Huge and Complex Health-Care Reforms,” The Lancet, Vol. 379, No. 9818, 2012, pp. 833–842.

  3. 3.

    L. Reynolds and M. McKee, “Factors Influencing Antibiotic Prescribing in China: An Exploratory Analysis,” Health Policy, Vol. 90, No. 1, 2009, pp. 32–36.

  4. 4.

    D. Ding, Q. Pan, L. Shan, C. Liu, L. Gao, Y. Hao, J. Song, N. Ning, Y. Cui, Y. Li, X. Qi, C. Liang, Q. Wu, and G. Liu, “Prescribing Patterns in Outpatient Clinics of Township Hospitals in China: A Comparative Study Before and After the 2009 Health System Reform,” International Journal of Environmental Research and Public Health, Vol. 13, No. 7, 2016.

  5. 5.

    http://www.linklaters.com/Insights/AsiaNews/LinkstoChina/Pages/Challenges-pharmaceutical-companies-under-China-new-drug-pricing-regime.aspx. Accessed September 2017.

  6. 6.

    http://eng.sfda.gov.cn/WS03/CL0757/131483.html. Accessed September 2017.

  7. 7.

    http://eng.sfda.gov.cn/WS03/CL0757/112570.html. Accessed September 2017.

  8. 8.

    http://eng.sfda.gov.cn/WS03/CL0757/122060.html. Accessed September 2017.

  9. 9.

    UBS research, 2013. http://pg.jrj.com.cn/acc/Res/CN_RES/INDUS/2013/10/2/ee2e6a3a-afcc-457b-a634-3a8827d20585.pdf. Accessed September 2017.

  10. 10.

    http://sczxs.mofcom.gov.cn/article/dyplwz/bh/201406/20140600639859.shtml. Accessed September 2017.

  11. 11.

    http://sczxs.mofcom.gov.cn/article/dyplwz/bh/201305/20130500145831.shtml. Accessed September 2017.

  12. 12.

    http://www.scmp.com/news/china/policies-politics/article/1858097/just-what-doctor-ordered-chinas-e-tailers-await-end. Accessed September 2017.

  13. 13.

    http://www.reuters.com/article/us-china-pharmaceuticals-iduskbn0ki0y220150109. Accessed September 2017.

  14. 14.

    http://www.chinadaily.com.cn/business/2015-04/03/content_19992944.htm. Accessed September 2017.

  15. 15.

    The Alliance for Safe Online Pharmacies (ASOP) is a global non-profit dedicated to protecting patient safety online. Learn more at www.safeonlinerx.com.

  16. 16.

    LegitScript is a company that monitors healthcare products and internet pharmacy websites with a focus on patient safety. Learn more at www.legitscript.com.

  17. 17.

    https://www.nytimes.com/2015/06/22/world/asia/in-china-illegal-drugs-are-sold-online-in-an-unbridled-market.html?_r=0. Accessed September 2017.

  18. 18.

    http://www.reuters.com/article/us-china-pharmaceuticals-ali-health-idUSKCN0VX0UX. Accessed September 2017.

  19. 19.

    https://www.wsj.com/articles/ali-health-swallows-bitter-pill-as-china-halts-drug-monitoring-system-1456144563. Accessed September 2017.

  20. 20.

    http://www.scmp.com/business/companies/article/1897939/alibaba-health-care-unit-stumbles-2016-deal-online-pharmacy. Accessed September 2017.

  21. 21.

    http://www.marbridgeconsulting.com/marbridgedaily/archive/article/92367/alihealth_to_launch_new_third_party_drug_tracking_platform. Accessed September 2017.

  22. 22.

    www.who.int/topics/essential_medicines/en/. Accessed September 2017.

  23. 23.

    S. Shekhar Kar, H. Sekhar Pradhan, and G. Prasad Mohanta, “Concept of Essential Medicines and Rational Use in Public Health,” Indian Journal Community Medicine, 2010.

  24. 24.

    S. Barber, B. Huang, B. Santoso, R. Laing, V. Paris, and C. Wu, The Reform of the Essential Medicines System in China: A Comprehensive Approach to Universal Coverage, WHO, 2013.

  25. 25.

    D. Wang and X. Zhang, “The Selection of Essential Medicines in China: Progress and the Way Forward,” Southern Med Review, 2011.

  26. 26.

    Christine Kahler, “China’s Healthcare Reform: How Far Hat it Come?” China Business Review, 1 January 2011. http://www.chinabusinessreview.com/chinas-healthcare-reform-how-far-has-it-come/. Accessed September 2017.

  27. 27.

    Institute for Healthcare Informatics—IMS, “Understanding the Role and Use of Essential Medicines Lists,” 2015.

  28. 28.

    As explained in a previous chapter, the State Council established the leading Group for Coordination Healthcare System Reform, an interagency team headed by Vice Premier and administrated by NDRC.

  29. 29.

    L. Wang, E. Ma, and W. Xu, Comparative Analyses of China National & Twenty Two Selected Provincial Essential Medicines Lists to the WHO 2011 Model List, WHO, 2011.

  30. 30.

    D. Wang and X. Zhang, “The Selection of National Essential Medicines in China: Progress and the Way Forward,” Southern Med Review, Vol. 4, 2011, pp. 22–28.

  31. 31.

    S. Barber, Baobin Huang, Budiono Santoso, Richard Laing, Valerie Paris, and Chunfu Wu “The Reform of the Essential Medicines System in China: A Comprehensive Approach to Universal Coverage,” Journal of Global Health, Vol. 3 No. 1, June 2013.

  32. 32.

    S. Zhang, W. Zhang, H. Zhou, H. Xu, Z. Qu, M. Guo, F. Wang, Y. Zhong, L. Gu, X. Liang, Z. Sa, X. Wang, and D. Tian, “How China’s New Health Reform Influences Village Doctors’ Income Structure: Evidence from a Qualitative Study in Six Counties in China,” Human Resources for Health, Vol. 13, No. 26, 2015.

  33. 33.

    Y. Song, Y. Bian, and L. Li, “Current Perspectives on China’s National Essential Medicine System: Primary Care Provider and Patient Views,” BMC Health Services Research, Vol. 16, No. 30, 2016.

  34. 34.

    S. Zhang, W. Zhang, H. Zhou, H. Xu, Z. Qu, M. Guo, F. Wang, Y. Zhong, L. Gu, X. Liang, Z. Sa, X. Wang, and D. Tian, “How China’s New Health Reform Influences Village Doctors’ Income Structure: Evidence from a Qualitative Study in Six Counties in China,” Human Resources for Health, Vol. 13, No. 26, 2015.

  35. 35.

    Y. Song, Y. Bian, M. Petzold, L. Li, and A. Yin “The Impact of China’s National Essential Medicine System on Improving Rational Drug Use in Primary Healthcare Facilities: An Empirical Study in Four Provinces,” BMC Health Services Research, Vol. 14, 2014, p. 507. http://www.biomedcentral.com/1472-6963/14/507. Accessed September 2017.

  36. 36.

    Zhang Xiang, “More Measures Needed to Deepen Healthcare Reform in China: Vice Premier,” Xinhua English News, November 11.

  37. 37.

    Y. Li, C. Ying, G. Sufang, P. Brant, L. Bin, and D. Hipgrave, “Evaluation, in Three Provinces, of the Introduction and Impact of China’s National Essential Medicines Scheme,” Bulletin of the World Health Organization, Vol. 91, 2013, pp. 184–194; L. Yang, C. Liu, J.A. Ferrier, W. Zhou, and X. Zhang, “The Impact of the National Essential Medicines Policy on Prescribing Behaviors in Primary Care Facilities in Hubei Province of China,” Health Policy Plan, 2012.

  38. 38.

    Y. Song, Y. Bian, M. Petzold, and A. Yin, “Effects of the National Essential Medicine System in Reducing Drug Prices: An Empirical Study in Four Chinese Provinces,” Journal of Pharmaceutical Policy and Practice React-text: 15, Vol. 7, No. 1, p.12, /react-text react-text: 18/react-text react-text: 19 September 2014a.

  39. 39.

    K. Eggleston, L. Li, Q. Meng, M. Lindelow, and A. Wagstaff, “Health Service Delivery in China: A Literature Review,” Health Economics, Vol. 7, 2008, pp. 149–165.

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Authors and Affiliations

  1. CNRS and Paris School of Economics (PSE), Paris, France

    Carine Milcent

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Milcent, C. (2018). The Medical Drug Market and its Reforms. In: Healthcare Reform in China. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-319-69736-9_7

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  • DOI: https://doi.org/10.1007/978-3-319-69736-9_7

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