Pharmaceutical supply chain in China: Current issues and implications for health system reform

Abstract

This article discusses the performance and distortions of pharmaceutical market in China and provides some reflections and policy implications for currently implemented reform. This study is based on literature review and publicly available data by searching electronic databases and official web pages of the Chinese government on the internet. China's economic transition and the incremental and piecemeal nature of health care reform have created a pharmaceutical market with a number of deficiencies, including ineffective supervision, mark-up price pattern, distortion of the price schedule, and lack of authoritative drug formulary. We conclude that the root cause of the market and government failures is that higher-than-cost drugs preferred by all suppliers. New drug pricing mechanism is the key to the current pharmaceutical reform and should be implemented in coordination with other health system reforms.