Chinese Officials Pledge New Drug Price Curb

China's Health Ministry is to ban hospitals from raising drug prices, according to officials. Government sources have said that the freeze will be imposed "soon," following sharp rises since hospitals were recently authorised to raise prices by up to 15% and make a profit.

The move is significant, as hospitals remain the primary means of access to pharmaceuticals for the vast majority of China's population.

According to official surveys, drug sales now account for more than 60% of profits in smaller and medium-sized hospitals, and the policy has allegedly led to over-prescribing and "unnecessary" use of medicines. National legislators have cited "illegal operations in the intermediary process" as reasons for the sharp price rises, which have occurred despite several government initiatives to cut drug prices.

According to official statistics, the average out-patient charge in China was CNY108.3 (US$13.10) in 2003 and in-patient healthcare spending was CNY3,910 (US$472.2). These figures respectively indicate a 58% and 76% rise over 1998, which is well above the growth in average earnings in the period.