Politic-Economic-Society-Tech

China slashes drugs prices

By the BBC's Duncan Hewitt in Shanghai

From Friday, authorities have announced the price of more than 380 types of medicine must be reduced.

The move is intended to benefit ordinary citizens who are increasingly having to pay their own medical bills.

But it is causing alarm among medicine manufacturers, some of whom say they are being asked to sell their products for less than cost price.

Medicine is a major concern for ordinary Chinese citizens.

Interest has become even greater since the authorities began replacing China's virtually-free welfare system with a new health insurance scheme, under which patients pay at least some of their medical costs themselves.

Horrified firms

In an apparent attempt to reduce public dissatisfaction, the government has ordered manufacturers to slash the price the most widely used medicines by up to 80%.

But many medicine firms are horrified. Some multi-national companies with factories in China say the new prices are based on those for domestically-made medicines, which are of lower quality.

Local governments have been given some discretion in setting prices - a spokeswoman for the Shanghai branch of US giant Johnson and Johnson told the BBC the firm had succeeded in negotiating a mutually acceptable price with the local authorities for some of its medicines.

Emptying shelves

She said the company was continuing to negotiate with the central government in the hope of finding a solution.

The firm was prepared to cut prices, she said, but the level set by the authorities was too low.

Local media reports have warned that if the authorities don't compromise, some multi-nationals may simply stop making their products in China - some medicines are already reported to have disappeared from shops in Beijing and other cities.

But the government has argued fixed prices are necessary to prevent collusion between medicine manufacturers and shops and hospitals, which they say has kept prices artificially high in the past.


source: BBC, 18/01/2002