China pushes further on drug quality and price control

In the newly-released “opinions on policies for drug manufacturing and distribution” by the State Council, which holds the highest power in China, the focus is made clear – keep improving drug quality and cutting drug prices, reports The Pharma Letter’s local correspondent Wang Fangqing.

Collective buying will be allowed for public hospitals in each province and direct-controlled cities – Beijing, Shanghai, Tianjin and Chongqing, according to the opinion, a type of document acting as a guideline for policy makers. The hospitals that plan to buy the same drugs will be able to negotiate prices at the provincial-level government procurement platform with suppliers selected by the provincial government from the first-round of tendering process. The so called “second-round negotiation” is currently forbidden to minimize opportunities for graft between suppliers and hospitals.

Another move to encourage competitive drug prices is to officially allow online drug sales, including prescriptions. According to the opinion, drug distributors will be allowed to work with e-commerce companies to achieve an online to offline model so that pharmacies will be able to receive orders online and deliver drugs offline. So far, prescriptions are only sold in hospitals and limited pharmacies, leaving space for price hikes.