TV report reveals drug price deceit
By Zha Minjie |
November 22, 2011, Tuesday
|
Print Edition
Print Edition
HIGH medicine prices are again in the spotlight after more drugs were found being sold at multiple times their ex-factory prices, highlighting flaws in the government's medicine pricing system.
Underhand practices during a drug's factory-to-hospital progress showed that a giant's share of the high profits was taken by pharmaceutical companies, sales persons, hospitals and even doctors, China Central Television claimed in its Weekly Quality Report program.
An industry insider, Zhao Lianbi, told the TV program that "it's not a single case in the medicine industry." The price differences ranged from five times to even up to 20 to 30 times for some products.
An asthma drug, produced by a factory in Shandong Province, was found being sold for 20 times its ex-factory price in Beijing hospitals.
Clindamycin Phosphate Injection (2ml), made by Shandong Lukang Cisen Pharmaceutical Co, sells for 12.65 yuan (US$2) in Beijing hospitals, compared with the factory-gate price of 0.60 yuan, CCTV claimed.
The insider also provided a list of more than 10,000 medicines and 100 drug firms.
Experts pointed out that one main reason for the problem is the irrational medicine biding system. China has a centralized drug procurement system for all medicines used by public hospitals and medical institutions, with the final winning bid price decided by provincial-level authorities.
Hospitals are allowed to add a premium of up to 15 percent to the retail price to ensure profits. In the Beijing case, Clindamycin Phosphate Injection won a tender with a bid price of 11 yuan, CCTV reported.
One pharmaceutical manager said that a drug used to cure gynecological disease had an ex-factory price of 7 yuan while the biding price soared to 56 yuan with a final retail price of 64.4 yuan.
And during the transaction, the profit for the factory was only 1 yuan, with the rest going to the chain of pharmaceutical firms, sales persons, hospitals and doctors.
The tendering system was initially designed to curb runaway prices but in practice, drug firms are understood to spend "promotional fees" on expert panels involved in the bidding process to make sure their products win the tender at high prices, it is claimed.
Underhand practices during a drug's factory-to-hospital progress showed that a giant's share of the high profits was taken by pharmaceutical companies, sales persons, hospitals and even doctors, China Central Television claimed in its Weekly Quality Report program.
An industry insider, Zhao Lianbi, told the TV program that "it's not a single case in the medicine industry." The price differences ranged from five times to even up to 20 to 30 times for some products.
An asthma drug, produced by a factory in Shandong Province, was found being sold for 20 times its ex-factory price in Beijing hospitals.
Clindamycin Phosphate Injection (2ml), made by Shandong Lukang Cisen Pharmaceutical Co, sells for 12.65 yuan (US$2) in Beijing hospitals, compared with the factory-gate price of 0.60 yuan, CCTV claimed.
The insider also provided a list of more than 10,000 medicines and 100 drug firms.
Experts pointed out that one main reason for the problem is the irrational medicine biding system. China has a centralized drug procurement system for all medicines used by public hospitals and medical institutions, with the final winning bid price decided by provincial-level authorities.
Hospitals are allowed to add a premium of up to 15 percent to the retail price to ensure profits. In the Beijing case, Clindamycin Phosphate Injection won a tender with a bid price of 11 yuan, CCTV reported.
One pharmaceutical manager said that a drug used to cure gynecological disease had an ex-factory price of 7 yuan while the biding price soared to 56 yuan with a final retail price of 64.4 yuan.
And during the transaction, the profit for the factory was only 1 yuan, with the rest going to the chain of pharmaceutical firms, sales persons, hospitals and doctors.
The tendering system was initially designed to curb runaway prices but in practice, drug firms are understood to spend "promotional fees" on expert panels involved in the bidding process to make sure their products win the tender at high prices, it is claimed.
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