A press conference was held on April 15 by the National Health and Family Planning Commission of the People’s Republic of China and seven other government departments, including the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the Ministry of Commerce, to explain a recent document on ensuring the supply of affordable frequently used drugs.

Approved by the State Council’s work group for a nationwide medical reform, the document was issued to tackle a long-standing problem – shortage of some cheap medicines in many regions since last year.

The document proposed some approaches, such as improving the management of pricing and procurement, stocking up on deficient drugs and providing more preferential policies, and setting up a regulatory mechanism for drug supplies.

According to the document, the maximum retail price limit of the drugs categorized as cheap ones will be canceled, and the price can be adjusted according to the costs and the supply-demand situation on the market, on the condition that the price is fixed according to the producers’ daily cost standard.

All the provinces, autonomous regions and municipalities can determine which drugs can be categorized as cheap drugs based on their own daily cost standard.

As for the drugs that are sold for higher than the cost standard due to cost inflation or changes in usage and dosage, they should be withdrawn from the category of cheap drugs and will receive new guidance for the highest retail price. And the drugs in short supply or small dosage will be produced and priced by the government.

Qualified producers will be published online, and medical institutions can buy the cheap drugs online. The producers would select the delivery service providers. The drugs produced by the government’s designated enterprises should improve market concentration.

A new mechanism for drug reserves will help build a two-level system – the central and local reserve system. The central reserve will cover the deficient drugs, while the local will include the ones for a specified dosage.

Production enterprises for cheap drugs will be encouraged to innovate their technologies to improve supplies. Priorities will be given to approving registration and application of drugs in urgent need for clinical use.

With the incentive of payment reform, medical institutions and staffers will take more initiatives to cut the price of drugs and prescribe the lower-price drugs.

The document also focuses on monitoring deficient drugs, in order to update information about their stock. It emphasizes supervision from different authorities for a fair and transparent competition environment.

Government departments will provide more details to enable all regions in China to adhere to the policies, let more parties become involved and more people to benefit from the reform.