The cost of medicine | Physician, Heal Thyself; Medicines are over-prescribed and overpriced.
www.economist.com/news/china/215 ... sician-heal-thyself
Quote:
"One of the main reasons for such hostility [against medical staff in China] is the high price of medicines and the corruption that contributes to it.
"China is expected to become the world’s second-largest pharmaceutical market by 2016, with total sales reaching $165 billion, according to IMS Health, a research firm [fueled by population aging, Chinese getting richer etc]. But it is also the result of a system that inflates the cost of medicine. Even the cheapest generic drugs sold in Chinese hospitals are much more expensive than their international benchmark.
"Public hospitals in China are not so public in their funding: government subsidies only made up 9% of their revenues in 2011. By contrast, the sale of medicines accounts for 40%. * * * Hospitals are allowed to charge a 15% markup on the drugs they sell, so the more expensive the better. Consequently, China’s spending on medicines is 40% of total health expenditure, far higher than the average for OECD countries, of 16%.
"hospitals [are] where 80% of China’s drugs are sold * * * Chen Wenling, an economist in the research office of the State Council, China’s cabinet, estimates that kickbacks [to doctors, hospitals] usually account for more than 20% of the final retail price of a drug sold.
"The introduction of generic brands has driven down drug costs elsewhere in the world, but promoting their use is difficult in China. The incentive system works against the use of cheap drugs.
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