Beginning June 1, 2015, the vast majority drugs in China, except
for narcotic and Type 1 psychotropic drugs, will be free from
government-set pricing. This reform on drug pricing policy was
announced by the central pricing authority, National Development
and Reform Commission ("NDRC") and other administrative
authorities jointly on May 4, 2015, with the release of the
Circular Concerning Opinions on the Enhancement of the Drug
Price Reform (NDRC Price No. 904)
According to the Circular, the NDRC aims to gradually establish
a market-driven drug pricing system and minimize government's
direct intervention in drug pricing. The Circular divides the
reform of the drug pricing system into five principles for
different types of drugs:
Drugs reimbursed by the Basic Medical Insurance
("BMI") funds: The prices will be established on
the basis of reasonable medical reimbursement standards by the BMI
administrations together with other authorities;
Patented drugs and drug products with exclusive sources
of supply: The prices will be determined through a
transparent and multilateral negotiation mechanism;
Blood products not listed in China's National
Reimbursable Drug List, immunization and vaccines purchased by
national centralized procurement, national free antiretroviral
treatment for HIV, and birth-control drugs and devices:
The prices will be determined by government procurement or
Narcotic drugs and Type 1 psychotropic drugs:
The government will continue to set the maximum ex-factory and
Drugs not in any of the above categories: The
prices will be set by the manufacturers based on the production
costs as well as market demand and supply.
While the NDRC will ultimately allow the market to decide on
drug pricing, it will increase the frequency of price surveillance
in the future, most likely by the monitoring of drug prices and
enforcement against unlawful pricing behavior.
Since 2000, the Chinese government, especially the NDRC
(formerly known as the National Planning Commission), has played a
key role in the drug pricing system by setting the
"government-guided prices" or the maximum retail price.
Therefore, the current reform will undoubtedly be deemed the
biggest change in the Chinese drug pricing system in years.
According to an anonymous NDRC spokesman, although some drug prices
may increase due to production costs or market demand, the NDRC
expects that most drugs will not experience a rapid price
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What happens if a patient, particularly a mental health patient,.
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