China’s health care reforms set to benefit top domestic pharmas, report says
Domestic sector expected to grow to US$167bn by 2020 from US$108bn in 2015, according to the US’ International Trade Administration
China’s top pharmaceutical companies are expected to benefit from proposed national health care policy changes, aimed at addressing what has become a overly fragmented market, according to a new report.
The central government is working with provincial authorities on a new medical insurance payment scheme that would motivate hospitals to prescribe lower-priced drugs, in a plan set to be finalised this month, according to a JPMorgan report.
The blueprint will allow medical institutions to pocket the difference between the sales prices of drugs and medical insurance payments, JPMorgan analyst Isabella Zhao said.
Insurers currently provide reimbursement to medical institutions and pharmacies based on a payment scheme, but the new plan would alleviate pressure on hospital reimbursement budgets, she said.
The resulting budgetary constraints will [inevitably] produce further pricing pressures on drugs, particularly as frustrations over corruption, cost and access to health care continue to mount
The proposed shift is part of ongoing reforms of China’s health care system, which have included the recent merger of its rural cooperative medical scheme with the basic medical insurance scheme for urban residents.