Health officials linked to overpriced drugs

By Jane Chen | May 21, 2010, Friday |

Online Edition

HEALTH officials may have been involved in helping boost medicine prices in central China's Hunan Province, according to research by a medical newspaper run by the Health Ministry.

Some shareholders in a distribution company which is under fire for overpricing drugs have the same names as officials in charge of medicine purchase, today's Health Daily newspaper reported.

The company, Hunan Zhenxiang Medicine E-Business Co Ltd, almost monopolizes drug prices in Hunan, according to the report. And its business address is registered at the Hunan Health Bureau.

It set the bidding prices of asparagus pills at 185 yuan (US$27) per bottle compared with factory prices of 15.5 yuan. The hospital then sold the anti-cancer pills to patients for 213 yuan by adding a 15 percent surcharge according to state rules.

A patient who discovered the huge price gaps complained to media and thus sparked a nationwide public outcry against drug overpricing.

The hospital involved, Hunan Xiangya No.2 Hospital, had insisted it was in the right by pricing the drug based on bidding prices set by the government-backed distributor Zhenxiang company.

According to rules, hospitals buy medicines not directly from producers but through pharmaceutical dealers in an online bidding platform.

Zhenxiang, launched in August 2001, is Hunan's first company licensed to bid for drugs, according to its Website. It helped more than 400 hospitals buy medicine online with yearly sales of more than 4 billion yuan.

Among the shareholders are Liu Wanzhun and Li Xianzhong, the same names as health officials in charge of Hunan's medicine purchase, according to Health Daily's research.

But the bureau denied any relationship with the company in its latest report to the Health Ministry. It also asked hospitals to investigate possible commercial bribery and kickbacks involved in medicine purchases.

Nation

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Health officials linked to overpriced drugs

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