Tuesday, 4 December 2012

China's Essential Drug Program: a good idea badly implemented?

Fierce price competiton for basic drug contracts means quality and supply may suffer
 According to a report in the Shandong Health News "the original intention of the national introduction of the basic drug system was very good, but the system has been introduced in too much of a rush, resulting in many problems and loopholes ."
A reporter who investigated the 'grassroots situation' often heard similar opinions voiced.
According to some in the health industries, the lack of oversight means that  the essential drugs program is open to abuse by a few. He said the basic medications tenders are "too cheap" and this attracts low quality bids and deters successful good quality manufacturers.
Due to the vague criteria  not being objective enough, this does not encourage product quality, lead to inter-company fierce price competition. Due to the low prices, many companies that win tenders  are not enthusiastic about drug production, leading to the  frequent often out of stock situation of drugs.
In Yanzhou there are 523 medical institutions that use 300 basic drugs, but some drugs  are simply not able to be purchased, such as Shandong Luoxin Pharmacy cephalexin capsules and Sinopharm compound liquorice tablets.
An industry source said the low prices of essential drugs and high distribution costs means many companies are reluctant to bid for distribution of essential medicines. The lack of supply of products such as such as sodium chloride injection, glucose injection  means companies can not guarantee hospital transfusion services normal supply of stock.
Why is there such a problem?
Part of the blame is on pharmaceutical companies that in order to seize the market,  bid blindly without considering whether the company has sufficient production and distribution capabilities. Also, medicines and other material prices continue to rise, and other factors affecting the cost of drug production, and the cost of management and quality control costs have been increased. With little or no profit, some companies stop the production of essential drugs, resulting in hospitals having no drugs available;
There is also a lack of oversight of supervision of the companies that win tenders. In the tender process for centralized procurement of essential drugs, health authorities should not only take into account the bid price of the company, but should also examine whether there it is qualified to produce the drugs. The authorities also need  to establish a strict regulatory regime after a winning bid, to supervise distribution and usage of essential drugs and to ensure the quality of the medication supplied.
Local protectionism may also affect the distribution of essential drugs, with direct distribution by the provincial pharmaceutical companies or stronger pharmaceutical companies.
Source: China Healthcare

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