Jan 05, 2015 04:33 PM

Health Ministry to Pick 2,000 County Hospitals for Drug-Pricing Reform

(Beijing) – The National Health and Family Planning Commission has said it will choose 2,000 county hospitals this year to be part of a reform of the medical care system intended to make more affordable medicines available to patients.

During a recent session of the Standing Committee of National People's Congress, Li Bin, director of the health ministry, said changes would be made to make public hospitals less reliant on drug sales.

As part of a reform of the country's medical care system, the State Council chose some 300 county-level hospitals for a pilot in June 2012. That pilot saw hospitals banned from marking up prices of drugs they prescribed.

Instead, they were awarded more government subsidies for offering better services. Regulators also relaxed controls over pricing to allow hospitals to charge more for premium services.

The reform came amid heightened public discord over rising medical costs blamed on hospitals being forced to make money from prescriptions to offset losses from a lack of government funding.

Pricing and bidding procedures in medicine procurement have been increasingly prone to corruption in recent years. At least five senior officials from the National Development and Reform Commission's price department have been detained for graft investigations linked to their oversight of medicine prices.

Xu Shaoshi, director of National Development and Reform Commission, who attended the session with the top legislature, said his agency is exploring ways of setting up a centralized medicine procurement platform to boost transparency.

He said that his commission would also promote a price negotiation mechanism between local governments and pharmaceutical companies in order to have more essential, but expensive patented or targeted cancer therapy drugs covered by the basic medical insurance.

Through such a mechanism, regulators could provide pharmaceutical companies with an incentive to produce those cheaper, less prescribed but essential drugs.

Jiangxi, in the east, was among the first provinces to introduce a negotiation mechanism, and its Department of Human Resources and Social Security announced in December it had added five essential cancer drugs to a list of medicines covered by basic medical insurance.

The provincial government said that it made the decision after it was able to negotiate cuts in costs of a bulk of drugs for leukemia and lung and breast cancers down from 186 million yuan to 159 million yuan.

Liu Junshuai, an official from Social Security Bureau in the port city of Qingdao, said non-government organizations could also play a role in price talks because they can first negotiate on behalf of patients.

(Rewritten by Li Rongde)

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