Proposal to curb rising prices of medicine, services released

• Source: Global Times
• [19:42 November 24 2009]
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China's State Council, or Cabinet, passed a long awaited medical reform plan which promised to spend 850 billion yuan (123 billion US dollars) by 2011 to provide universal medical service to the country's 1.3 billion population.(Photo: News.cn)

The Ministry of Health, National Development and Reform Commission and Ministry of Human Resources and Social Security jointly issued a proposal Monday to reform the pricing system for medicine and medical services.

Prices for medical services in clinical diagnosis, nursing, surgery and other technical services should be raised and the price of medicines needs to be lowered, according to the proposal.

In the existing medical system, hospitals can benefit from a "commission" they add on to the medicines they sell from drug companies. The commission is calculated based on medicines that are priced less than 500 yuan wholesale, where 15 yuan is charged for every 100 yuan. Any medicines priced more than 500 yuan per unit can only be surcharged an extra 75 yuan.

The newly-released proposal encourages reducing the 15 percent "commission" with a more flexible markup policy based on the different prices for medicines. It also says price caps can be introduced on expensive medicines if necessary.