Pharmaceutical Pricing and Reimbursement in China - Series of Mandated Price Cuts Not Effective in Stemming Healthcare Expenditures
Summary
GBI Research, the leading business intelligence provider, has released its latest research “Pharmaceutical Pricing and Reimbursement in China - Series of Mandated Price Cuts Not Effective in Stemming Healthcare Expenditures”. The report provides a comprehensive overview of the healthcare system, and pricing and reimbursement process in China with key data, information and analysis of pricing and reimbursement steps. The report closely scrutinizes major changes in the pharmaceuticals-related pricing and reimbursement scene in China, due to the implementation of the 2009 Healthcare Reform.
Pricing and reimbursement is of paramount importance in China because of the rapidly rising expenditure on drugs. These issues become more acute because of the large population in China, and its associated effects on expenditure on drugs. Although the rapidly growing population and shift towards urbanization offer a large market for drug manufacturers, the market is tempered by the pricing and reimbursement system in China. Challenges faced by companies entering the Chinese pharmaceutical market include government price controls, extensive retail mark-ups, and wide regional variations in insurance.
Pharmaceutical price and pharmaceutical quantity are major factors contributing to healthcare expenditure. The control of retail prices alone is not effective in containing healthcare expenditures; it is also essential to prescribe efficient pharmaceutical utilization. Efficient pharmaceutical utilization is achieved by the use of appropriate reimbursement mechanisms, and a prospective payment system. This cost-driving reimbursement mechanism is incompatible with the goal of containing health-care costs. The reform of the reimbursement mechanism therefore plays a vital role in the changing incentives to the providers. The new reimbursement mechanism provides incentives to healthcare professionals, encouraging efficiency and cost savings when using all health resources, including drugs. The new reimbursement mechanism is an effective countermeasure for the Chinese healthcare system, which is plagued by over-prescription, abuse of quality technology services and cost shifting. A large part of the pharmaceutical market growth is propelled by the expansion of the public sector health insurance coverage, which also includes a greater reimbursement of drugs.
Scope
- Detailed study of the healthcare scenario in the China
- Analysis of the pricing and reimbursement mechanisms in China
- Key changes that follow on from the implementation of new Healthcare Reform 2009 within the pricing and reimbursement system
- Details about government bodies which regulate different processes of pricing and reimbursement in China
- Insight into various reimbursement programs in China
Reasons to buy
- Build an understanding of the pharmaceuticals-related key pricing and reimbursement mechanisms in China
- Optimize your investment through identification and understanding of the changes in the pharmaceutical regulatory mechanisms in China
- Gain knowledge regarding the regulatory bodies who undertake different processes of price registration
- Develop effective business strategies related to new drug launches through the analytical insight gained from key trends in the pricing and reimbursement scene in China
- Negotiate better with the government agencies to maximize reimbursement on the drugs by understanding the mechanism
Managed Care Industry in China
Table of Contents
1 Table of Contents
1 Table of Contents 5
1.1 List of Tables 6
1.2 List of Figures 7
2 Pricing and Reimbursement in China - Introduction 8
3 Healthcare System in China - Overview 9
3.1 Introduction 9
3.1.1 Sizable Population and Increase in Life Expectancy 10
3.2 Socio-Economic and Demographic Trends Affecting the Healthcare Sector 12
3.2.1 Shift in Demographics 12
3.2.2 Rise in Personal Disposable Income 13
3.2.3 Rise in Lifestyle Diseases 14
3.3 Healthcare Expenditure 15
3.3.1 Healthcare Expenditure Comparatively Low 17
3.3.2 Healthcare System in China: A Backdrop 18
3.3.3 PEST Analysis 19
3.4 Healthcare Regulation 21
3.4.1 Ministry of Health 23
3.4.2 The National Development and Reform Commission (NDRC) 23
3.4.3 Chinese Center for Disease Control and Prevention (China CDC) 23
3.4.4 The Ministry of Finance (MoF) 23
3.4.5 Ministry of Labor and Social Security (MoLSS) 24
3.5 Healthcare Reforms 2009-2011 Aimed to Offer Better Access, Efficiency and Quality 24
3.6 Effectiveness of Healthcare Reform 2009–2011 27
3.6.1 Pillars of China's Health Reform: EMS and Reform of Publicly Funded Hospitals 27
3.7 Evolving Trends in the Healthcare System in China 28
3.7.1 Increase in Taiwanese Investment in Hospitals in China 28
3.7.2 Hospital Advertising 28
4 Pricing and Reimbursement in China - Overview 29
4.1 Pharmaceuticals in Healthcare Systems in China 29
4.1.1 OTC Drug Market in China 29
5 Pricing and Reimbursement in China - Pricing 31
5.1 Drug Pricing Mechanism 31
5.1.1 Pricing of List A Drugs 32
5.1.2 Pricing of List B Drugs 32
5.1.3 Principles for Government Pricing: 33
5.1.4 NDRC Drug Pricing: Criteria for Evaluation 34
5.1.5 Objectives for Drug Price Regulation in China 35
5.2 National Essential Medicines List (NEML) 35
5.2.1 National Essential Medicines List - 2009 36
5.2.2 Essential Drugs List (2000 - 2009) 37
5.2.3 NEML 2009 Continues to Focus on Affordability and Accessibility 38
5.3 Drug Regulation Pattern 39
5.3.1 Key Reasons for High Drug Price in China 39
5.3.2 Differential Drug Pricing 39
5.3.3 Pricing Premiums 40
5.3.4 Foreign Drugs Exempt from Price Cuts 40
5.3.5 Drug Pricing Trends Closely Followed by R&D-Based Pharmaceutical Companies 40
5.4 Drug Registration Process 41
5.4.1 Classification of Drugs 41
5.4.2 New Drug Registration Process: 42
5.4.3 Negative Pricing Pressures Not Effective in Stemming Healthcare Expenditures 43
5.4.4 Challenges Facing Pricing and Reimbursement in China 45
6 Pricing and Reimbursement in China - Reimbursement Scenario 46
6.1 Health Insurance in China 46
6.1.1 Urban Health Insurance 47
6.1.2 Rural Health Insurance 47
6.1.3 Private Insurance 48
6.1.4 Private Insurance Sector is Thriving 49
6.1.5 Universal Health Insurance Coverage 49
6.2 Drug Reimbursement in China 50
6.2.1 NDRL Listing Implications 52
6.2.2 Role of Key Stakeholders in Approving Drugs for Reimbursement 52
6.2.3 Key Criteria for the Drug Reimbursement Selection Process 52
6.2.4 NDRL 2009 to Push Drug Sales in the Future 54
7 Appendix 55
7.1 Market Definitions 55
7.2 Abbreviations 55
7.3 Sources 56
7.4 Research Methodology 57
7.4.1 Healthcare System 57
7.4.2 Pharmaceutical Regulations 57
7.4.3 Pricing of Pharmaceutical Drugs 58
7.4.4 Reimbursement of Pharmaceutical Drugs 58
7.4.5 Pricing and Reimbursement in Major Therapy Areas 58
7.5 Contact Us 58
7.6 Disclaimer 58
List of Tables
Table 1: Pricing and Reimbursement in China, Population Estimates and Projections, 2006-2015 10
Table 2: Pricing and Reimbursement in China, Life Expectancy Estimates and Projections 1970-2020 11
Table 3: Pricing and Reimbursement in China, Rise in Personal Disposable Income, ($), 2005-2013 13
Table 4: Pricing and Reimbursement in China, Top 10 Leading Causes of Death in Urban and Rural, 2009 14
Table 5: Pricing and Reimbursement in China, Estimated Public Health Spending as a % of GDP, 2006–2015 16
Table 6: Pricing and Reimbursement in China, Health Expenditure per Capita ($), 2006–2015 16
Table 7: Pricing and Reimbursement in China, BRIC and The US, Health Expenditure as a % of GDP ($), 2006–2010 17
Table 8: Pricing and Reimbursement in China, BRIC and The US, Health Expenditure per Capita ($), 2006–2010 17
Table 9: Pricing and Reimbursement in China, BRIC and The US, Public Health Expenditure as a % of Total Health Expenditure ($), 2006–2010 17
Table 10: Pricing and Reimbursement in China, BRIC and The US, Out-of-Pocket Health Expenditure as a % of Private Expenditure on Health, ($), 2006–2010 18
Table 11: Pricing and Reimbursement in China, Role of Organizations in Healthcare System, 2011 22
Table 12: Pricing and Reimbursement in China, China, Market Size by Category ($bn), 2003-2009 30
Table 13: Pricing and Reimbursement in China, Price Caps for Certain Essential Drugs, 2009 34
Table 14: Pricing and Reimbursement in China, National Essential Drugs List by Therapeutic Class, 2009 36
Table 15: Pricing and Reimbursement in China, National Essential Drugs List Comparison, 2004 vs. 2009 38
Table 16: Pricing and Reimbursement in China, New Drug Application Classes, 2011 41
Table 17: Pricing and Reimbursement in China, Abbreviated New Drug Applications Classes, 2011 41
Table 18: Pricing and Reimbursement in China, Price Cuts 2000-2011 44
Table 19: Pricing and Reimbursement in China, Basic Medical Insurance Coverage in Urban Population, (‘0,000) 2000-2011 47
Table 20: Pricing and Reimbursement in China, Foreign Joint Stock Insurance Companies, 2010 48
Table 21: Pricing and Reimbursement in China, Foreign Joint Venture Insurance Companies, 2010 48
Table 22: Pricing and Reimbursement in China, Major Foreign Players in Insurance Sector, 2010 48
Table 23: Pricing and Reimbursement in China, National Drug Reimbursement List, 2009 53
List of Figures
Figure 1: Pricing and Reimbursement in China, GDP Estimates and Projections, 2006-2015 9
Figure 2: Pricing and Reimbursement in China, Population Estimates and Projections, 2006-2015 10
Figure 3: Pricing and Reimbursement in China, Average Life Expectancy Estimates and Projections, 1970-2020 11
Figure 4: Pricing and Reimbursement in China, Population Aged 65 and Above, (% of Population), 2008-2040 12
Figure 5: Pricing and Reimbursement in China , Increase in Personal Disposable Income, ($), 2005-2013 13
Figure 6: Pricing and Reimbursement in China, National Healthcare Expenditure (% of GDP), 2010 15
Figure 7: Pricing and Reimbursement in China, Total Healthcare Spending, $bn, 2006–2015 15
Figure 8: Pricing and Reimbursement in China, Estimated Public Health Spending as a % of GDP, 2006–2015 16
Figure 9: Pricing and Reimbursement in China, PEST Analysis, 2011 19
Figure 10: Pricing and Reimbursement in China, Healthcare Regulation, 2011 21
Figure 11: Pricing and Reimbursement in China, Key Issues of Healthcare, 2009-2011 24
Figure 12: Pricing and Reimbursement in China, Budget Allocation in Healthcare Reforms, (%), 2009 26
Figure 13: Pricing and Reimbursement in China, Healthcare Reform, 2009 26
Figure 14: Pricing and Reimbursement in China, Pillars of Health Care Reform, 2009–2011 27
Figure 15: Pricing and Reimbursement in China, Pharmaceutical Market Ranking, 2009 vs. 2013 29
Figure 16: Pricing and Reimbursement in China, Measures Adopted to Control Pharmaceutical Expenditures, 2011 30
Figure 17: Pricing and Reimbursement in China, Drug Pricing Mechanism, 2011 32
Figure 18: Pricing and Reimbursement in China, NDRC Drug Pricing Principles, 2011 33
Figure 19: Pricing and Reimbursement in China, National Essential Drugs List by Therapeutic Class, 2009 36
Figure 20: Pricing and Reimbursement in China, National Essential Drugs List, 2000-2009 37
Figure 21: Pricing and Reimbursement in China, Drug Registration Flow Chart, 2011 42
Figure 22: Pricing and Reimbursement in China, Key Developments in Healthcare Insurance Sector, 1998-2011 46
Figure 23: Pricing and Reimbursement in China, Healthcare Insurance Coverage, 2006, 2009 and 2011 49
Figure 24: Pricing and Reimbursement in China, Healthcare Insurance, 2009-2011 50
Figure 25: Pricing and Reimbursement in China, National Drug Reimbursement List, 2009 vs. 2004 51
Figure 26: Pricing and Reimbursement in China, National Drug Reimbursement List by Therapeutic Class, 2009 53
