Song Xiaowu, from the State Economic Restructuring Office, made the remarks at a symposium held in Beijing yesterday.

The high price of drugs has led to continuous complaints. Many people, especially the unemployed, find it difficult to afford medical treatment. Half of the costs are for buying drugs.

Statistics show that in 1998 the money spent on drugs by individuals accounted for 68.8 percent of the total money they spent on medical care.

Meanwhile, the money from drugs accounts for, on average£, at least 60 percent of the income of hospitals.

Many drugs are sold at rates much higher than the trade price. For example, hepatitis A vaccine is sold for 25 yuan (US$3) in many regions, but it costs only 2.5 yuan (US$0.3) to produce it.

Doctors can get commission on some prescribed drugs.

The medicine industry is also frustrated with excessive production, distribution through illegal channels and illegal advertisements by some people who are driven by the huge profits to be made in this sector. In order to solve these problems, China has come up with some measures.

Earlier this month, the State Development Planning Commission lowered the retail price of 120 types of drugs which have sales worth 2 billion yuan (US$240 million) a year.

That was the third price reduction this year.

In January, authorities cut the price of 34 medicines, and in July, they further slashed the prices of another 57.

At yesterday's symposium£ Song suggested some other solutions.

The first, he said£, is to separate dispensaries from hospitals and change them into independent drug stores. It is thought this will help to avoid collaboration between the two branches and prevent them profiting illegally from patients.

Song said another measure would be to divide the medical system into profit-making and non-profit sectors.

The foundation for a medical insurance system for urban workers, which include these measures, will take shape before the end of this year.

The system is expected to provide a high-quality medical service at a comparatively low price and meet the demand for basic medical treatment for all.

For the past few decades, the State has been paying for most of the medical costs for employees in state-owned enterprises and government bodies.

This is simply costing the country too much, despite its efforts, it cannot afford to provide a consistent quality service for such a large number of people.

Those who benefit from the old system now can get up to 90 percent of their healthcare for free.

(Xinhua 11/15/2000)