Access to Drugs in Developing Countries
Edited by Kenneth C. Shadlen, Samira Guennif, Alenka Guzmán and N. Lalitha
Chapter 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 discussion, 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 problem of expensive drugs. The chapter is organized as follows: Section 1 describes the nature of demand for drugs in...
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