China's National Development and Reform Commission (NDRC) has said it plans to deepen reform of the country's pricing system and cut costs within the real economy, including of medical treatment services, according to local media reports.
Implications | Six provinces and cities, including Jilin province and Tianjin municipality, are expected to issue public recommendations on further price reforms. |
Outlook | A National Development and Reform Commission (NDRC) statement outlines the price and cost control programme, with more details on implementation to be expected later, along with proposals from the six provinces and cities. |
A National Development and Reform Commission (NDRC) official has stated at a press conference that six provinces and cities, including Jilin province and Tianjin municipality, will issue public recommendations on enhanced price reforms, with an emphasis on capital market policies in relation to healthcare.
Reform of medical services pricing will also involve stronger cost control and co-ordination between policies as well as greater oversight and stakeholder involvement.
China's State Council has stated that China's total healthcare services will top CNY8 trillion (USD1.2 trillion) by 2020, driven by a rapidly ageing population. This far exceeds the country's national health spending in 2015 of about CNY4 trillion.
The NDRC's announcement follows a statement at the end of May that the body would carry out sweeping pricing inspections from 1 June, targeting abnormal price changes for bulk drugs, and covering pharmaceutical companies, healthcare institutions, disease prevention and control centres, drug-bidding platforms, blood banks, procurement bodies, and industry associations (see China: 30 May 2016: China's NDRC to conduct pricing inspections on drug makers, hospitals, and procurement bodies from June).
China's National Health and Family Planning Commission (NHFCP) has also announced price cuts of up to two-thirds for high-cost pharmaceutical treatments, including hepatitis B (HBV) drug Viread (tenofovir disoproxil fumarate, TDF; GlaxoSmithKline: GSK, UK) and lung-cancer treatment Iressa (gefitinib; AstraZeneca, UK) (see China: 23 May 2016: China cuts prices of innovative drugs by two-thirds, including GSK's Viread and AstraZeneca's Iressa).
Outlook and implications
The NDRC's statement gives the main outlines of the price and cost control programme, with more details on implementation to be expected later, along with proposals from the six provinces and cities.
The announcement is in line with China's increasing push to rein in healthcare spending costs. At the same time, earlier this month Chinese authorities announced a plan to expand family doctor services to the entire population by 2020, according to guidelines, indicating a policy of improving access to affordable treatment in China's more remote areas (see China: 8 June 2016: China's NHFPC plans to expand family doctor services to entire population by 2020).
Costs are set to keep climbing as China expands basic healthcare. As this happens, China is expected to introduce increasingly stringent cost controls for public healthcare providers. Drugmakers are likely to continue to face stricter drug pricing policies, with the negotiated drug price cuts campaign anticipated to widen.