Financing, Pricing, and Utilization of Pharmaceuticals in China

Abstract

This paper examines the financing,
 pricing, and utilization of pharmaceuticals in China the
 pharmaceutical system as it has evolved, and some changes
 that would improve it in the context of the national health
 reform process. The present paper builds upon earlier
 critical reviews and other papers published in the series
 china health policy notes. The paper is divided into four
 parts. The first section provides an overview of the Chinese
 pharmaceutical market: how the sector has grown;
 China's position in the global market; and size,
 composition, and trends in the domestic market. The second
 section examines the evolution and status of China's
 system of essential medicines, an area emphasized in the
 government's health reform plan announced in April
 2009. It shows how the use of essential medicines has
 evolved over the two decades since the idea was formally
 adopted, and discusses why practice has fallen far short of
 the ideal. The third section looks at the issue that
 dominates today's debate: managing high pharmaceutical
 costs. It reviews the components of drug pricing,
 underscoring the argument that there is considerable scope
 for reducing prices. It looks at government attempts to
 control drug prices, and suggests why they did not succeed.
 Finally, the fourth section suggests measures to re-chart
 the path to reform.