Drug supply halted after cost-price sales

By Jane Chen | May 28, 2010, Friday |

Online Edition

A DISTRIBUTOR has stopped supplying a liver drug to a south China doctor who sold the drug at cost price to patients.

Yang Jiong, dean with Guangdong Bank Hospital's liver disease department, revealed the move in a bid to clear doctors' names in a scandal over high drug prices, today's Guangzhou Daily reported.

Earlier reports said anti-cancer asparagus pills were sold to patients for 15 times their cost price, with doctors pocketing up to 80 yuan (US$11.71) on each bottle.

Yang said he launched the cheap drug program last March as many patients complained that adefovir dipivoxil, or ADV, was too expensive and had to stop using it to treat hepatitis B.

He sold more than 400 packs of the drug within a fortnight to patients at the cost price of 45 yuan, 70 percent off the normal retail price of 148 yuan, the newspaper said.

But when the distributor refused further supply, Yang had to call off the drug sales.

The supplier surnamed Yang told the newspaper that Yang's cheap sales had angered other hospitals and pharmaceutical dealers who pressured him to stop supply.

A sales agent surnamed Hu with another medicine company blamed high retail prices on the huge costs of distribution.

He told the newspaper that money about three times the cost of a drug had to be spent to persuade a hospital's officials and doctors to use it.

Usually, 25-30 percent of a drug's retail price goes to the prescribing doctor, 15 percent to the hospital, 3-5 percent to the sales agent, 10 percent to the distributor and 15-25 percent in tax. The rest is for the production cost.

Last April, the government unveiled a three-year health care reform plan, saying it would lay a solid foundation for equitable and universal access to essential health care in China by 2020.

Under the 850-billion-yuan plan for 2009 to 2011, the government promised universal access to basic health insurance, the introduction of an essential drug system, improved primary health care facilities, equitable access to basic public health services and pilot reform of state-run hospitals.

Nation

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Drug supply halted after cost-price sales

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