Officials linked to overpriced drugs
By Jane Chen |
May 22, 2010, Saturday
|
Print Edition
Print Edition
HEALTH officials in Hunan Province may have been involved in helping inflate medicine prices, according to an investigation by a newspaper run by the Ministry of Health.
Some shareholders of Hunan Zhenxiang Medicine E-Business Co Ltd, which distributes medicine and is under fire for overpricing medicines, have the same names as local officials in charge of medicine purchases, Health Daily reported yesterday.
The company essentially has a monopoly on medicine prices in Hunan, according to the report.
In one example, it set the bidding price of asparagus pills at 185 yuan (US$27.08) per bottle compared with a factory price of 15.5 yuan. A hospital then sold the pills to patients at 213 yuan per bottle as state rules allow a 15 percent markup.
A patient discovered the huge price gaps and complained to the media, sparking a nationwide public outcry against drug overpricing.
The hospital involved, Hunan Xiangya No. 2 Hospital, had insisted it did nothing wrong, saying it had priced the drug based on the bidding price set by the government-backed distributor, Hunan Zhenxiang Co Ltd.
According to rules, hospitals can only buy medicines through pharmaceutical dealers on an online bidding platform, not directly from the drug makers.
Hunan Zhenxiang, launched in August 2001, was the province's first company licensed to accept bids on medicine products, according to its Website. It has helped more than 400 hospitals purchase medicine via the government-backed online bidding platform. Its transactions are worth more than 4 billion yuan annually.
Liu Wanzhun and Li Xianzhong are listed as shareholders of Hunan Zhenxiang.
One of the officials in charge of the province's medicine purchases last year is also named Li Xianzhong, as indicated in the provincial health bureau's notice to local hospitals. The dean with the bureau's hospital medicine purchase service center is named Liu Wanzhun, as noted in the bureau's 2004 yearbook.
Hunan Zhenxiang is registered at the address of the Hunan Health Bureau. The bureau denied it had any connection to the company.
Some shareholders of Hunan Zhenxiang Medicine E-Business Co Ltd, which distributes medicine and is under fire for overpricing medicines, have the same names as local officials in charge of medicine purchases, Health Daily reported yesterday.
The company essentially has a monopoly on medicine prices in Hunan, according to the report.
In one example, it set the bidding price of asparagus pills at 185 yuan (US$27.08) per bottle compared with a factory price of 15.5 yuan. A hospital then sold the pills to patients at 213 yuan per bottle as state rules allow a 15 percent markup.
A patient discovered the huge price gaps and complained to the media, sparking a nationwide public outcry against drug overpricing.
The hospital involved, Hunan Xiangya No. 2 Hospital, had insisted it did nothing wrong, saying it had priced the drug based on the bidding price set by the government-backed distributor, Hunan Zhenxiang Co Ltd.
According to rules, hospitals can only buy medicines through pharmaceutical dealers on an online bidding platform, not directly from the drug makers.
Hunan Zhenxiang, launched in August 2001, was the province's first company licensed to accept bids on medicine products, according to its Website. It has helped more than 400 hospitals purchase medicine via the government-backed online bidding platform. Its transactions are worth more than 4 billion yuan annually.
Liu Wanzhun and Li Xianzhong are listed as shareholders of Hunan Zhenxiang.
One of the officials in charge of the province's medicine purchases last year is also named Li Xianzhong, as indicated in the provincial health bureau's notice to local hospitals. The dean with the bureau's hospital medicine purchase service center is named Liu Wanzhun, as noted in the bureau's 2004 yearbook.
Hunan Zhenxiang is registered at the address of the Hunan Health Bureau. The bureau denied it had any connection to the company.
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