[Ip-health] China New Rules For Drug Pricing

[Judit Rius Sanjuan]

http://www.shanghaidaily.com/sp/article/2007/200702/20070226/article_307151.htm

CHINA'S top pricing authority will tighten medicine pricing procedures
in drug manufacturing from March 1 to raise transparency and as an
anti-corruption measure in an industry widely considered to be riddled
with rampant bribery.

The National Development and Reform Commission issued an interim
regulation yesterday that sets out a five-step drug pricing procedure to
be followed before setting drug prices:

1. Product cost investigation. Drug price regulators visit drug
companies to check the cost of the raw materials for the drug;

2. Expert evaluation. Randomly pick up experts from the drug pricing
experts group. The experts evaluate the price under the supervision of
the commission's disciplinary unit;

3. Hearing opinions from the public;

4. Group discussion;

5. Group examinations.

Medicine pricing is a sensitive issue because many interest groups are
involved, such as drug companies, hospitals, pharmacies and the public.
Because the manufacturers and retailers seek larger profits, some
inexpensive medicines with beneficial effects have been gradually phased
out of the market.

The commission has cut the retail price of thousands of drugs to lower
people's medical burdens. However, many drug makers stopped the
production of affected drugs and launched new medicines with similar
ingredients but at higher prices.

Regulations issued in January mean that drug companies paying bribes can
be barred from doing business with Chinese medical institutions. This
followed the corruption probe into Zheng Xiaoyu, the former director of
the State Food and Drug Administration.

The new rules require at least two medicine price regulators to be
present during cost investigations by drug companies. All members of the
investigation group must sign off on the investigation result.

All foreigner-related meetings should be arranged through foreign
affaires office of the commission.

Medicine price regulators are forbidden from taking money and gifts in
any form or receiving invitations for banquets or traveling abroad from
drug companies.

Regulators will rotate positions regularly and any leader or staff
member who works in the same main position for five years or more will
have a rotation.

Before re-pricing, medicine price regulators will communicate with drug
companies. The re-pricing plan will seek out public's opinion through
the media if possible.

--
Judit Rius Sanjuan
Attorney
judit.rius@keionline.org

Knowledge Ecology International (KEI)
www.cptech.org
1621 Connecticut Ave, NW, Suite 500 Washington, DC 20009 USA
Tel.: +1.202.332.2670, Ext 18  Fax: +1.202.332.2673