Tug of War Over Drug Pricing
China’s healthcare reform has been plagued by the problem of reasonable drug pricing for 20 years. Patients, healthcare authorities, hospitals, drug companies have been involved in a continuous tug-of-war over the years. In 2019, the war further escalates.
In order to improve the availability and affordability of essential patented drugs to Chinese patients, the government has toughened its stance on pricing during market access negotiations, in particular, targeting more expensive drugs. The initiative used to exert downward pricing pressure on drug companies is the national health insurance drug reimbursement list, or NDL. This continuing evolution of the healthcare system means that drug companies must adapt as new stakeholders emerge.
Brutal Growth of Chinese Medical Beauty Industry
In 2011, China surpassed Japan as the world’s third-largest market for medical beauty and the market has kept growing. However, the crowded market quickly drove up the cost for obtaining customers and the profits were squeezed, leading to the surge of uncontrolled activities and even deadly surgical accidents.
An industry reshuffle is underway. Effective rules and regulations, whether from the industry or the government, are badly needed. Currently, various regulatory methods are being tried out in different places, and eventually a feasible regulatory scheme will be worked out across the country according to the practice.
Medical Insurance Information Industry: The Competition Intensifies
By the end of 2018, the number of people covered by China’s basic medical insurance had reached 13.4 billion, above 95 percent of the total population. The rapid deployment of the medical insurance Information system provides support for numerous treatments and payment settlements.
Since the establishment of National Healthcare Security Administration last year, many IT companies joined in the bid for healthcare security information system update project, a market expected to be more than one billion yuan. Meanwhile, they are also competing for the construction of DRG, is a patient classification system, which is a much bigger market. However, the real gold mine in the business is the medical data. The ability to reutilize the data after filtering sensitive information will decide who will be the final winner.
New Alzheimer’s Therapy Delivers a Surprise and Questions
Chinese regulators have granted conditional approval to an Alzheimer’s drug that is derived from seaweed, the first new medicine with the potential to treat the cognitive disorder in 17 years. It shook up the field after years of clinical failures involving experimental therapies from major drug companies.
The conditional approval means Oligomannate, also known as GV-971, will be on the market in China by the end of the year. The announcement been met with caution as well as an eagerness from clinicians. Outside experts said they would want the full data to show exactly how cognitive function improved for patients on the drug versus those on placebo, and how meaningful that was in the patients’ lives.
Medical Service Is Key to the Survival of Nursing Homes
Occupancy rates determine how well a nursing home is doing. An occupancy rate of 70% can ensure it to achieve break-even and 80% to achieve profits. But at present, the average occupancy rate of private nursing homes is less than 50%, and 80% of them are losing money.
The lack of medical and health services is a common problem for China’s private nursing institutions. The excessive pursuit of more beds, the lack of professional nursing staff and commercial long-term healthcare insurance make people in need linger outside the door of nursing homes. The industry can only be activated when China’s clinical treatment resources can reach the nursing homes and communities.
