China slashes drug prices as healthcare reforms announced

China has announced pricing cuts for dozens of medicines used in public hospitals and a raft of other reforms in a bid to slash the cost of healthcare in the country.

The country's National Development and Reform Commission (NDRC) posted a notice on its website detailing various measures aimed at reducing the burden of medical costs in China's pubic hospitals by 2015. 

The latest announcement comes a day after the NDRC announced a 17 per cent cut in the maximum retail price of 95 cancer medicines and certain other drugs for chronic diseases, with the reductions due to come into effect on October, 8. 

The aim of the cancer drug reductions is to reduce the burden on patients, said the agency, as well as to improve access to doctors. Meanwhile, the prices of some blood products are to be raised to encourage production and help alleviate product shortages.

A Reuters report notes that healthcare is causing increasing social unrest in China, with millions of people unable to afford basic treatment and rising numbers of violent incidents involving frustrated patients and their families.

China's government is grappling with a huge increase in healthcare spending, with McKinsey & Co predicting in a July report that this will inflate from $357bn last year - already twice the 2006 spend - to $1trn or more in 2020. 

That sort of prediction has made China a key target for multinational pharma companies trying to offset sluggish growth in mature markets such as the US, Europe and Japan, although McKinsey is predicting difficult times ahead given government reforms, competition from national drugmakers and China's slowing economic growth.

The NDRC notes in its latest statement that the reform in public hospital spending is a key pillar in China's healthcare reform programme, which also focuses on reducing unnecessary medicine prescribing and labour costs and revamping the national insurance system to cover more medicines and diseases.