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Prices of basic drugs slashed 12%

By Cui Jia and Lan Tian (China Daily)
Updated: 2009-10-05 06:59

Retail prices of almost half of the drugs on the Ministry of Health's essential medicines list will be slashed by 12 percent this month.

The cuts, which are aimed at easing the financial burden on citizens as part of far-reaching health reforms, will start on Oct 22, the National Development and Reform Commission (NDRC) announced on Friday.

The recommended retail price of about 49 percent of the drugs will remain unchanged, while 6 percent of the listed drugs in short supply will be raised to encourage increased production, the commission said.

The Ministry of Health last month issued a list of 307 medicines that satisfy healthcare needs and are available to the public at all times in adequate amounts and in appropriate dosages.

According to the ministry's 10-year plan, about 30 percent of State-run grassroots clinics will be stocked with all essential medicines by the end of this year and urged to give them priority when treating patients.

All State-run health centers in urban and rural areas will have to give priority to the medicines by 2020, the plan states.

The system is part of the medical reform program unveiled in April, which aims to provide fair and affordable services to China's 1.3 billion residents by 2020.

This round of price reforms will involve 2,349 specific medicines and impact on 3,000 drugs producers, the NDRC said in a statement.

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Producers and retailers will be able to set market prices for essential medicines based on demand, but prices should be no higher than the recommended amount, said a NDRC official who declined to be named.

"The government's price cut won't affect us that much as our prices for most essential and basic medicines are already below the recommended prices," a branch manager for Beijing Hedantang pharmacy said yesterday.

Hospitals and high-margin pharmacies are the targets of the price cuts, he said.

"If we find the purchase price of certain medicines higher than the government's price, we will return them to the wholesaler and ask for a refund before Oct 22. At the end of the day, we have to make a profit," Zhao added.

Prices for essential drugs at several pharmacies in northeastern Beijing's Wangjing area are 10 to 20 percent higher than recommended prices, Beijing Legal Evening News reported yesterday.

"The medicine price is directly related to the producers' profits. Producers won't produce or pharmacies won't sell drugs if prices are too low to make a profit," the report quoted an anonymous manager of Tongrentang pharmacy in Wangjing.

Beijing resident Zhao Li added: "The purpose of the price cuts is good but I'm wondering whether residents will feel the benefit. The NDRC had lowered the prices of medicine many times in recent years but drugs are still expensive."