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Pharma news: China restricts hospital drug sales

China is pushing reforms at public hospitals in the wake of widespread complaints about inadequate healthcare services and corruption related to drug sales.

According to a guideline issued by the State Council, reforms that were piloted in 17 cities in 2010 will be expanded to the country’s 6,800 public hospitals by 2017. The reforms aim to make medical services available to more citizens and reduce drug prices.

As part of the reform package, public hospitals will have to drop drug sales as a major source of revenue and rely more on medical-service charges and government subsidies.

Public hospitals and doctors have relied heavily on drug sales for revenue, resulting in high drug prices and bribery, said Liu Yuanli, dean of Public Health School at Peking Union Medical College. Public hospitals became profit-driven and allied with drugmakers instead of serving the needs of patients, Liu added.

“Public hospitals should be operated for the public good, instead of seeking lucrative gains,” state media Xinhua News said.

The reform guideline requires public hospitals to establish a reasonable drug pricing system.

It also bans public hospitals from setting revenue targets for doctors and connecting their salaries with drugs sales and medical examinations, therefore to eradicate kickbacks and bribes from drugmakers.

The reforms came after a series of bribery scandals involving public hospitals and global drug firms.

In September 2014, a court in China fined UK pharma giant GlaxoSmithKline $490 million following a conviction for bribery.

Sources: Morning Post (北京晨报), Xinhua News, International Business Times

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Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.

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