1. Medicine Pricing Policy in China
Center for Medicine Price Setting National Development and Reform Committee, P.R. China
Lu Fengxia
Manila, Philippine
2-4 August 2006

2. Principles of the Policy
1、Offering good medical services with low cost
2、Government control combining with market mechanism

3. Foundation of the Policy
1、Drug Administration Law
2、Regulations for Implementation of the Drug Administration Law
3、Regulations on Medicine Price Setting by the Government
4、List for Medicines with price set by the Government

4. Scope of Medicines with Price set by the Government
1、Medicines on the
Reimbursement List
2、Controlled medicines
- Patented medicines
- Narcotics
- Psychological medicines
- EPI vaccines

5. Medicine Pricing Forms Used by the Government
Two forms:
1、Controlled medicines:
- NDRC set factory price (or border price
- Provincial price authorities set wholesale and retail price
2、Other medicines:
- Setting maximum retail price

6. Jurisdiction of the Medicine Price Setting
Two tiers:
1、Central price control
authority
2、Provincial price authorities

7. Principles for Price Setting
Basis Principles：
------Cost
------Supply and demand
------Affordability

8. Principles for Price Setting
1、Secure rational profit rate
2、Keep rational cost performance
3、Good quality with good price
4、Encourage R&D
5、Reflect market demand

9. Procedures for Medicine Price Setting
1、Cost assessment
2、Market price investigation
3、Regional coordination
4、Expert evaluation
5、Price publication

10. Medicine Price Setting Policy
1、Good quality with good price
Quality, efficacy, safety and cost
Quality examination
Clinical validation
Expert demonstration

11. Medicine Price Setting Policy
2、Differential Pricing
Brand name medicines and generics
Different dosages
Different strengths
Different packages

12. Medicine Price Setting Policy
3、Price for inviting bids
Cost plus ratio for price of the bid winner
Cost plus ratio is set by the provincial price authorities
Price is checked by the party inviting tenders

13. Thanks!