A MEDICINE PRICES SURVEY IN CHINA Presentation by Dr Xiaoxia Hu Research by Dr Sun Qiang and Dr Xiaoxia Hu June, 2006.

A MEDICINE PRICES SURVEY IN CHINA

Presentation by Dr Xiaoxia HuResearch by Dr Sun Qiang and Dr Xiaoxia Hu

June, 2006

Sectors and facilities surveyed

5 private pharmacies

5 private pharmacies

5 private pharmacies

5 private pharmacies

Private sector

2 secondary hosp

3 township hosp

2 secondary hosp

3 township hosp

2 secondary hosp

3 township hosp

1 Pharm Centralized Bidding Office

2 tertiary hosp3 secondary

hosp

Public sector

LowMiddleHighCapital city Economic development

ChipingJinxiangZhangqiuJinanCity/county studied

Availability of the 50 surveyed drugs

Private SectorPublic Sector# of drugs found in % of outlets

7

2

12

18

LPG(39)

1

8

8

22

IB(39)

0

6

10

23 drugs

IB (39)

8Over 50%

321 - 50%

101- 20%

18Not Found

LPG

Private SectorPublic SectorSample of drugs with good availability

60%

0

85%

80%

LPG

25%

30%

20%

0

IB

25%

20%

20%

0

IB

80%Omeprazole

0Losartan

70%Ceftriaxone injection

85%Amoxicillin

LPG

Prices

9

6

# of Meds. in Both Sectors

0.680.520.77LPG

1.014.154.09IB

Private Public Ratio

Private Sector MPR

Public Sector MPR [average]

0.51

7.98

4.13

NA

0.19

5.95

Private [MPR]

0.471.09LPG

1.037.74IBOmeprazole

0.924.51LPG

NAIBNifedipine Retard

0.580.33LPG

1.015.89IBCeftriaxone

Private Public Ratio

Public [MPR]Medicine name

Price components

4752.71615.1The retail price

 not dividable

 not dividable

N/AN/AImport duty, VAT, port fee etc

3%N/A3%N/ANational tax

4.5%17.11%25.69%14.05%Hospital /retailer markup

3%6.16%3%10.33%Wholesaler markup

42.3942.391212Wholesaler procurement price

PrivatePublicPrivatePublic

IBLosartan

GenericAmoxicillin 

Final prices in Public and Private sectors

Same base price Markups generally

higher in public sector

Final price of generic Omeprazole

0

50

100

150

200

Public Private

Fin

al p

ric

e

Add-on

Base

Final price of innovator Losartan

0

10

20

30

40

50

60

Public Private

Fina

l pri

ce

Add-on

Base

Key issues identified

Prices of drugs are much higher than the international reference price

Drugs of innovator brand are much more expensive than generic equivalent.

Drugs obtained from the public sector are more expensive than those from the private sector, especially for generic drugs

Availability of surveyed drugs is low in China

The mark-up in the distribution chain contributes greatly to the price of drugs. The mark-ups are higher in the public sector than in the private sector

Follow on activities planned

Advocate government to further develop the medicine pricing policy

Promote the use of generic drugs to both the providers and the public

Develop provider behavior restraining mechanisms on the use of non-generic drugs

Strengthen the monitoring of the medicine distribution channels, and control of the procurement process