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Watanabe, Mariko; Shi, Luwen --- "Sufficient but Expensive Drugs: A Double-Track System that Facilitated Supply Capability in China" [2011] ELECD 962; in Shadlen, C. Kenneth; Guennif, Samira; Guzmán , Alenka; Lalitha, N. (eds), "Intellectual Property, Pharmaceuticals and Public Health" (Edward Elgar Publishing, 2011)

Book Title: Intellectual Property, Pharmaceuticals and Public Health

Editor(s): Shadlen, C. Kenneth; Guennif, Samira; Guzmán , Alenka; Lalitha, N.

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849800143

Section: Chapter 10

Section Title: Sufficient but Expensive Drugs: A Double-Track System that Facilitated Supply Capability in China

Author(s): Watanabe, Mariko; Shi, Luwen

Number of pages: 33

Extract:

10. Sufficient but expensive drugs: a
double-track system that facilitated
supply capability in China
Mariko Watanabe and Luwen Shi

This chapter analyses access to essential drugs in China by focusing on
institutions involved in the demand for and supply of drugs. With regard
to the demand for drugs, the Chinese health care system is undergoing
substantial change. Health care used to be an extremely underdeveloped
sphere of China's public policy: most of the population was not covered
by health insurance, so the general public had to pay a substantial share
of drugs expenditure themselves. This situation generated significant
social discontent, and the discontent compelled a reform of the health care
system in the mid-2000s. A new health care system is now under discus-
sion, which is likely to change the nature of demand for drugs drastically.
On the supply side, China adopted a double-track system of drug listing
before joining the WTO in 2001. The drug patent system was introduced
in the early 1990s in order to protect the innovators, most of which are
big foreign pharmaceuticals firms. At the same time, local firms, which
produce generic drugs, were provided an opportunity of entry under the
principle of "New Drug Protection", which protects the first firm to enter
the Chinese market regardless of patents. This double-track system allows
many local firms to enter drug production, facilitating access to essential
drugs for the general public. However, shortcomings on the demand side,
particularly in hospitals, cause a ...