Drug government pricing next year to cancel blood products face a small price increase

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The National Development and Reform Commission issued the "Plan for Promoting Drug Price Reform (Draft for Comment)" to eight pharmaceutical industry associations. From January 1 next year, more than 2700 nationally priced drugs are expected to achieve market-oriented pricing. This means that the dust has settled on the largest reform in the history of drug pricing in China. Industry analysis pointed out that the vast majority of drugs will not rise in price, while the prices of exclusive proprietary Chinese medicines such as Yunnan Baiyao, Pien Tze Huang, Tongrentang, and blood products will rise slightly in the short term.
□ Release
2700 kinds of drug pricing fully liberalized
The "Draft for Comments" shows that from January 1, 2015, the maximum retail price or ex-factory price set by the original government will be canceled.
The formation mechanism of future drugs is basically as follows: the price of medical insurance drugs will be taken over by the human resources and social security department to set the benchmark price for payment, and the negotiation power of hospitals will be strengthened when purchasing. Drugs such as patented drugs and exclusive varieties of proprietary Chinese medicines will be introduced into multi-party negotiation mechanism to form reasonable prices. Blood products, drugs and contraceptives purchased uniformly nationwide will form market transaction prices through bidding or negotiation. A class of mental and narcotic drugs, and low-cost drugs basically follow the current policy.
In fact, since 1996, China has implemented three pricing forms for drugs: drugs included in the basic medical insurance reimbursement list and a few drugs with monopoly production and operation are subject to government pricing or government-guided prices. Among them, there are about 100 kinds of drugs, accounting for 0.8 per cent of the number of drugs approved for marketing, which are priced by the government. Other drugs are subject to government-guided prices in the form of a maximum retail price of about 2600 kinds, accounting for about 22 per cent. In addition to the above-mentioned 2700 kinds of government-priced and government-guided drugs, the other 77% of the drugs have previously been market-regulated and set their own prices by enterprises.
Therefore, the complete abolition of government pricing of drugs by the National Development and Reform Commission means that as many as 2700 kinds of government-priced drugs, which account for 23% of China's drugs, will officially get rid of the "planned pricing" model and officially change to "market pricing".
□ Interpretation
The vast majority of drugs will not increase prices
Insiders of the National Development and Reform Commission said that after the abolition of government pricing of drugs, due to the constraints of the bidding and procurement mechanism, the prices of drugs sold in hospitals will not rise, but it is not ruled out that the prices of some drugs sold in retail pharmacies will rise at the beginning of the reform.
"Generally speaking, due to the guidance of medical insurance payment standards, the restriction of drug bidding and procurement mechanism and medical insurance fee control mechanism, as well as the strengthening of government departments' monitoring and supervision of market transaction prices, the prices of most drugs will not rise." Cai Jiangnan, director of the China-Europe Center for Health Management and Policy, said.
However, people in the pharmaceutical industry also said that for example, Yunnan Baiyao, Pien Tze Huang, and Tongrentang's exclusive proprietary Chinese medicines, which are not included in the medical insurance catalog, are also exclusive varieties of medicines, and the prices will rise slightly in the short term.
"As the current supply of blood products in the market is less than demand, the black market prices have reached 2-3 times the normal price. After the price is released, the price of blood products will definitely rise." Li Zhigang, senior analyst at Shengde Capital Pharmaceuticals, said.
Reform does not mean that drug prices are out of control.
"People who don't know must think that the scope of reform is too large, but it is not. Drug prices are still under the constraints of many parties and operate according to the market mechanism." Cai Jiangnan said that there is a big gap between the maximum price of drugs previously set by the National Development and Reform Commission and the actual price of drugs paid by patients. In the middle, there are also hospital drug bidding by the Health and Family Planning Commission, medical insurance control fees by the Ministry of Human Resources and Social Security, and even what drugs doctors are willing to prescribe to patients, which will affect the price of drugs.
Market participants pointed out that the price of drugs in hospitals will not change under the condition that the hospital bidding and medical insurance fee control policy remain unchanged. Even if blood products and preventive immunization drugs are liberalized, the circulation channels and purchase channels are under the control of the regulatory authorities, and the influence is limited. The patented drugs of many foreign-funded pharmaceutical companies are originally priced in the market. All aspects are still under control, and the pricing mechanism of drugs is not completely pushed to the market.
"The significance of the NDRC's decentralization is to change China's long-term distorted pricing mechanism." Cai Jiangnan said that in the past, the price of some drugs was seriously lower than the cost. This reform has enabled the Ministry of Human Resources and Social Security, as the "paying party" of drugs, to gradually establish a price negotiation mechanism with drug manufacturers, which can be used for bargaining.
The resistance of the three-way game reform still exists.
"Now it seems that the NDRC is mostly wishful thinking, and neither the Ministry of Human Resources and Social Security nor the Health and Family Planning Commission have expressed their position." A medical analyst pointed out, "if the NDRC deletions power, the management of medical insurance payment price can only be received by the Ministry of human resources and social security, but medical insurance payment is the hardest hit area of anti-corruption, which is very difficult for the Ministry of human and social security."
According to the plan launched by the National Development and Reform Commission this time, after the drug price is liberalized, the medical insurance department will take over the medical insurance drug. Its core is to set the medical insurance payment price, which can be negotiated when the hospital purchases, giving the hospital the motivation to reduce the price. At the same time, it is also necessary to carry out the reform of the payment method of medical insurance, and implement the comprehensive payment method of total control, such as payment by disease and payment by head.
In addition, the right to purchase drugs through bidding is controlled by the local health and family planning commission system, and the problems accumulated in the implementation of this system have been criticized. For the successors of drug price management, the accumulated grievances and problems of the people on the deviation of the bidding system may also be angered by the Ministry of human resources and social security.