2014-11-24

China Liberalizes the Healthcare Market

China has started reform of the healthcare system, with Shanghai taking the lead in the market pricing of drugs and medical devices.

Economic Observer: 新价改“闯关”

One feature of China's system is that it costs almost nothing to see a doctor, but medicine is inflated by hospitals and doctors. Market pricing will help correct these types of situations.
On the day of the State Council executive meeting, Premier Li Keqiang to the outside to release the two signals, one price reform will "accelerate", on the other hand, the core price change is "a greater degree the market pricing."

Li Keqiang at the meeting, for example in medicine prices, public hospitals, physician fee price is too low, but it still exists to hold down prices, therefore, through reform, and gradually straighten out such an unreasonable price mechanism.

Reforms are kicking off in Shanghai: 药价改革上海破冰 非政府定价药品放开

The Google translation is a bit stilted, but the message comes through: reform will take time since monopsony pressure in the bidding process will still hold down prices.
About Shanghai reforms, the majority of business people believe that the future of the pharmaceutical industry price changes will not be much. Classification of essential drugs and medicines as well as non-Medicare drug pricing drugs outside of the government, in the current pharmaceutical market structure, the implementation of the Medicare drug bidding, the bidding policy around, the prices are being suppressed, "If bidding policy does not change, drug prices changed little. "A pharmaceutical source said.

Drugs at his own expense, in the eyes of those companies, this part should make independent pricing, currently the country have set up barriers, origin price, price, etc. local provinces offer process conditions, virtually has limited business of their own products the right to decide the price.

"Fully competitive areas, such as basic drug prices will not go up, a single species may raise prices." Pharmaceutical companies believe that drug prices after the reintroduction of market prices will return to the normal rules of market economy status.

"Drug prices, and finally from a planned economy to a market-oriented economy in the form of changes in the morphology." Pharmaceutical Industry Association, one person said.
Considering the vast majority of the developed world relies on socialist economics for healthcare, it would be surprising if China implements more market reforms than the West, but for now the trend in reform favors China.

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