The Opportunity of the New Medical Reform in the Chinese Market in the Eye of Foreign Peers Challenges the Wisdom of Decision Makers

Business News Agency November 2 The Chinese pharmaceutical market has not only challenged multinational pharmaceutical companies that have entered China, but also brought challenges to the Chinese government itself. Recently, Chinese Minister of Health Chen Hao told the Wall Street Journal when attending the UN General Assembly that China's pharmaceutical sales must completely change the doctor's rebate model from the prescribed prescription. So far, the Chinese government's approach has been to price 307 key drugs (essential drugs).

This move will result in a 30% to 50% drop in the prices of these drugs, which is good for the Chinese government trying to control medical expenses because it can change China's healthcare system. But it is not too good news for multinational pharmaceutical companies in this market. Because some of these companies are selling their patented drugs at a higher price than generics, the Chinese government will prevent the implementation of this strategy (according to CNN Money).

In fact, the government price limit is only one of the unknown challenges faced by multinational pharmaceutical companies in China. The excellent local sales staff in China are also competing with multinational pharmaceutical companies. Large multinational pharmaceutical companies such as Lilly and Sanofi-Aventis are expanding their sales force.

“The uncertainties in the Chinese pharmaceutical market are getting stronger and stronger. Because of the increasing number of challenges, people can’t be sure where to go,” Chris Arzt, a management consulting firm at Zhisheng, said to CNN: “If you ask me a year ago, I can Saying that people are full of confidence is still the case, but there are also some worrying factors."

Universal Health Insurance System Opportunities

"The ambition of the Chinese government's new healthcare reform is a challenge that cannot be solved by relying solely on money," said Chen Tong.

Now, the Chinese government is investing 125 billion U.S. dollars and striving to achieve universal health insurance by 2020. The Chinese government is working hard to ensure that the coverage of basic medical insurance exceeds 90% by the end of next year. At the same time, the Chinese government is also improving the primary health care system and balancing the country's public health service system.

"The medical reform is not an easy task for any country, especially for China with 1.3 billion people," Chen said, but the Chinese government has always placed the people's health at the top priority.

So far, China's medical reform has made some progress. In 2009, the government invested more than 10 billion U.S. dollars, increased the coverage of basic medical insurance by 60%, and expanded it to 833 million U.S. dollars. This is a major development for China because many patients in China have to bear the major medical expenses, and malignant diseases such as tumors will exhaust the savings of patients and their families for years and even lifetimes. However, the Chinese government still needs to find out how to further promote rural health care and deep-rooted compensation plans to solve problems such as the sale of medicines and drugs such as hospitals and doctors.

In China, many hospitals get rebates from prescriptions issued by them, which leads to patients getting some medicines they do not need. “We also know that changing the system in which hospitals and doctors rely on income from medicines is not an easy task. Chen Yu said.

The benefits of the basic drug system

The Chinese government is adopting a "wise and phased approach" to change this dependence, starting with the introduction of a list of essential drugs. The Chinese government has identified 307 drugs as the key medications for general diseases and said that they should be available to all people. The prices of drugs in the Essential Drug List are fixed and there are no rebates when prescriptions are issued. The prices of these drugs have dropped by 30% to 50%, and they have also reduced hospitalization and outpatient medical costs. This year, this directory will also expand. Most of the drugs in the catalog are produced by Chinese domestic pharmaceutical companies.

It is not yet clear what kind of way the hospital will take to deal with the decrease in income caused by the basic drug system. "We are working hard for it," Chen Yu said. He also said that prescription reforms have not yet started in urban hospitals.

Another way is for the government to invest more money in the hospital. However, the reform of the hospital system also involves "a series of operational problems." Hospitals are often overloaded and the focus of attention needs to shift from emergency and serious illnesses to primary health care, which includes health promotion and education, and even disease prevention.

Business opportunities in the medical insurance industry

To some extent, the poor in China are not yet able to enjoy health care. Most hospitals are located in cities, and many rural areas lack simple community clinics. In view of this situation, the Chinese government is working hard to change the structure of the hospital. Up to last year, 1,000 rural and township hospitals have been upgraded, and this year will also complete the tasks of 1,000 hospitals. At present, there are 20,000 public and private hospitals in China.

Chen Hao also pointed out that the Chinese government has seen the role of transnational healthcare companies in China. The Chinese government welcomes private insurance companies to continue to provide medical insurance services and expand the scope of services for those who need higher levels of medical care in China.

The services currently provided by foreign medical device and drug manufacturing companies can only satisfy a part of the people in China. These people are medical insurance provided by employers. However, the Chinese government hopes that Chinese farmers will also enjoy these complex products in the future.

The Chinese government also encourages domestic domestic companies to make better use of this market advantage, whether through establishing joint ventures with themselves or with multinational companies. However, it is hoped that these companies will formulate better price policies and set specific prices for the poor in China.

This year, the Chinese government will also expand the AIDS prevention and treatment program. Although this move has nothing to do with health care reform, the Chinese government will provide free antiviral drugs for HIV-positive patients. This plan will also be extended to HIV counseling and virus testing. The current AIDS prevention and treatment program started in 2006 and has already controlled the rate of expansion of AIDS. In 2009, China added 48,000 AIDS patients, and in 2005 and 2007, it added 70,000 new cases and 50,000 AIDS patients.