TV probe exposes flaws in drug tender program
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Shanghai Daily, November 14, 2011
An asthma drug was found being sold for 20 times its ex-factory price in Beijing hospitals and three times the rates offered in clinics in Shandong Province, state television reported yesterday, a situation it said highlighted flaws in the government's medicine pricing system.
![An asthma drug was found being sold for 20 times its ex-factory price in Beijing hospitals and three times the rates offered in clinics in Shandong Province, state television reported yesterday.[Photo from the video clip]](http://images.china.cn/attachement/jpg/site1007/20111114/0019b93bd68d102acc0d56.jpg "An asthma drug was found being sold for 20 times its ex-factory price in Beijing hospitals and three times the rates offered in clinics in Shandong Province, state television reported yesterday.[Photo from the video clip]") |
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An asthma drug was found being sold for 20 times its ex-factory price in Beijing hospitals and three times the rates offered in clinics in Shandong Province, state television reported yesterday.[Photo from the video clip] |
Clindamycin Phosphate Injection (2ml), made by Shandong Lukang Cisen Pharmaceutical Co, sells for 12.65 yuan (US$2) in Beijing hospitals, compared with the factory-gate price of 0.60 yuan, China Central Television claimed in its Weekly Quality Report program.
At a Shandong clinic, it sells for 3.85 yuan, according to the program. The price difference shows that the high cost of medicine is still a problem in China despite government efforts to slash maximum retail prices for drugs repeatedly over past years.
China has a centralized drug procurement system for all medicines used by public hospitals and medical institutions, with the final winning bid price decided by provincial-level authorities.
Hospitals are allowed to add a premium of up to 15 percent to the retail price to ensure profits. In the Beijing case, Clindamycin Phosphate Injection won a tender with a bid price of 11 yuan, CCTV reported.
The tendering system was initially designed to curb runaway prices but in practice, drugmakers are understood to spend "promotional fees" on expert panels involved in the tendering process to make sure their products win the tender at high prices, the program said.
Higher prices mean more commission hospitals and doctors can earn by prescribing certain medication. In the Clindamycin Phosphate Injection case, about 7 yuan of its bid price of 11 yuan went into the pockets of hospitals, doctors and salespeople, CCTV said, citing a local agent.
CCTV said experts on the panel overseeing Beijing's drug tendering declined to comment, while a sales official for Lukang Cisen also declined to reveal how it won the tender, only saying that it was a business secret.
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