15 Nov. 2011
Antalya, Turkey
Experiences in Implementing the
National Medicines Policy
- Change in China
Jing Sun
National Institute of Hospital Administration, MoH, P.R.China
sunjingx@yahoo.com
Plenary 2: National Systems, Policies, and Programs
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15 Nov. 2011
Antalya, Turkey
Contents
• Background of the National Health System
Reform
• Medicine Sector Reform as Part of the
National Health System Reform
• Essential Medicines System as Foundation of
the National Medicines Policy
- Contents
- Progress and Achievements
- Challenges and the Way Forward
Plenary 2: National Systems, Policies, and Programs
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15 Nov. 2011
Antalya, Turkey
Background of the National Health
System Reform - 1
• Consensus of developing well-off society as the top
priority of the country
• Fast economic growth allows more government
investment and public expense
•
• Recognition of health as the foundation of human
development by the national top political leaders, and
strong political willingness of coordinating the social &
economic with the health development
• People’s complains of poor access to quality basic
health care both physically and financially
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Background of the National Health
System Reform - 2
• Availability
- Poor access to services in remote rural areas
- Out of stock of key essential medicines
(expensive alternatives available) in urban
areas
• Affordability
- Soaring health and medicines expenditure
- High proportion of pharmaceutical to health
expenditure
- High proportion of out of pocket expenditure
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Antalya, Turkey
Background of the National Health
System Reform - 3
• Quality
- Public perception of local products with poor quality
• Rational use
- Irrational prescription and unnecessary care
intensified by the perverse incentives
a) distort pricing system
b) retrospective fee for service payment
c) health facilities have to rely on costly medicines
and diagnostic equipment, and poly-pharmacy
to compensate weak government investment
- Implications of huge wastes of limited resources,
alarming burden of drug resistance, adverse drug
reaction/event
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Antalya, Turkey
Background - Availability
Basket of key medicines
Shandong
Availability
province 2005
(GDP per
capita No.8/31) Price
Shanghai 2006 Availability
(GDP per
capita No.1/31)
Price
Hubei
Availability
province 2009
(GDP per
capita
Price
No.13/31)
Public patient
Median (%)
Median
Price Ratio
Median (%)
Median
Price Ratio
Median (%)
Median
Price Ratio
Private patient
Orig.
0
/
LPG
5
5
Orig.
4.09
7.14
LPG
0.93
0.51
Orig.
13.30
10
LPG
33.30
15
Orig.
5.64
8.76
LPG
2.03
1.77
Orig.
/
/
LPG
38.90
44.40
Orig.
11.25
19.94
LPG
1.04
Source: WHO/HAI medicine prices, availability, affordability and price
components survey
Plenary 2: National Systems, Policies, and Programs
0.68
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Antalya, Turkey
Background - Affordability
Total health expenditure in China
Total medicines expenditure in China
(CNY 100,000,000)
(CNY 100,000,000)
Source: National Health Account 1990-2010
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Background - Affordability
• Total health expenditure: 5.13% GDP
• Pharmaceutical expenditure: 44.5 % health expenditure
• Government health expenditure: 27.23 % total health
expenditure; 6.18% total government budget
• Private health expenditure: 38.19% health expenditure
Source: Annual Yearbook of China Health Statistics 2009 and National Health
Account 2009
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Antalya, Turkey
Background – Quality Perception
Source: South Pharmaceutical Economic Research Institute of SFDA 2009
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Background – Quality Perception
• Switching from originator brands to lowest-priced
generics in Chinese public hospitals for a limited
basket of medicines in 2008
- Total potential cost savings:$ 86,492,276
- Average percentage savings: 65.1%
Source: World Health Report 2010
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15 Nov. 2011
Antalya, Turkey
Background – Rational Use
• 57%/61%/66% prescriptions in the urban and rural
health centers and village clinics include antibiotics
• 33%/39%/30% prescriptions in the urban health
centers/stations/rural health centers include
infusions
• The isolate rate of Methicillin Resistant
Staphylococcus Aureus (MRSA) is over 60% in
clinical settings
• The incidence of highly macrolide-resistant
streptococcus is over 80%
Source: Chinese national health service survey 2008 and the Report of
National Antimicrobials Resistance Monitoring Network 2006
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Antalya, Turkey
Medicine Sector Reform as Part of the
National Health System Reform
• Government restructure
- Drug regulatory authority back to the governance of MoH
- National medicines policy issues shift from the drug
regulatory authority to a newly established Department of
MoH
•
High level political commitment
UNIVERSAL coverage of safe, efficient, convenient and
affordable ESSENTIAL health care system, including
- Public health service system
- Medical service system
- Medical security system
- Essential medicines system
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15 Nov. 2011
Antalya, Turkey
Essential Medicines System as
Foundation of the
National Medicines Policy - 1
• Establish the State Council Health System Reform
Leading Group, composing 16 ministries for
coordination and collaboration
• Resume the development of the national medicines
policy since 2004
• Conduct Healthy China 2020 research initiative,
covering each aspect of the national medicines
policy in 2008, but not officially published and
legitimately implemented
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Antalya, Turkey
Essential Medicines System as
Foundation of the
National Medicines Policy - 2
• Objective
- Secure the accessibility, quality and rational use
of medicines
- Focus the equity, sustainability and
comprehensive reform of the public primary care
facility
• Select essential medicines to guide the supply,
financing, reimbursement, quality assurance and
rational use
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Antalya, Turkey
Contents - 1
• Supply: pooled procurement of essential medicines
• Pricing: price cut (both originators and generics), same
maximum retail and reimbursement price under
generic name for newly covered medicines by
insurance programs
• Financing: government subsidy to both sides
- Demand side: essential medicines covered by insurance
programs
- Supply side: remove mark-up on medicines, and
performance based government subsidies
to public primary care facilities
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Contents - 2
• Reimbursement: improved benefit package
• Quality: electronic coding; routine sampling and testing
• Rational Use: health system approach
- Training on standard treatment guidelines & formularies
- Removing perverse incentives (price adjustment,
insurance payment reform, zero mark-up on medicines)
• Comprehensive reforms (public primary care facilities)
- Government procurement platform
- Performance based government subsidy and income
allocation
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Antalya, Turkey
Progress and Achievements - 1
• System construction by coordinated ministerial actions
- 205 western medicines and 102 TCMs selected for
primary care (health)
- Zero mark-up on medicines in all public primary care
facilities across 31 provinces (health, finance)
- Standard treatment guideline & formulary training (health)
- Adjusted prices (pricing)
- Improved insurance benefit package (social security)
- Provincial pooled procurement (health and regulatory)
- Quality assurance (regulatory)
- Increase government subsidy to public facilities (finance)
- Strengthen rural primary care staff (human resource,
finance)
Plenary 2: National Systems, Policies, and Programs
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Progress and Achievements - 2
• Comprehensive reforms in public primary care facilities
- Procurement: contract manufacturers directly with
committed quantity; pooled payment via provincial
government account; 31 provinces set up government
procurement platform, 68.1% counties set up electronic
procurement system; 26 provinces initiated new rounds
of procurement following the reform
- Comprehensive reforms: 25/31 provinces set up
performance based government subsidy and income
allocation mechanism; 24/31 provinces adjusted the
diagnostic and treatment service fee; varies approaches
to subsidize village doctors (fees, insurance outpatient
coverage, public health service subsidy, basic salary
and pension security)
Plenary 2: National Systems, Policies, and Programs
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15 Nov. 2011
Antalya, Turkey
Progress and Achievements - 3
• Reimbursement
- 90% areas cover outpatient service
- Reimbursement rates of rural insurance and urban
resident insurance for inpatient service reach 60%-70%
- Insurance payments shift from retrospective fee for
service to prospective case based, capitation, and
budget control or mixed payment (pilots)
• Quality
- Newly revised GMP to be fully implemented by 2015
• Intellectual property right
- Compulsory License Provision 2005
- Newly revised Patent Law 2008
- Compulsory license process explored in 2011
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Challenges - 1
• Group of policies addressing every aspects of the
pharmaceutical issues exist, but not an official
comprehensive full document covering all
Selection
Medicines financing
Yes, medicines for hospital care to be selected
Yes, commitment to be put into actions
Medicines pricing
Yes, in process of adjustment
Procurement
Yes, in process of improvement
Distribution
Yes, in process of improvement
Regulation
Yes, in process of strengthening
Pharmaco-vigilance
Yes, in process of strengthening
Rational use of medicines
Yes, need
Human resource development
Yes, yet comprehensive
Research
No, one time projects, yet strategically planned
Monitoring and evaluation
Yes, just started, need scientific methods
Traditional Medicine
Yes, need evidence based principles
more comprehensive health system approaches
Yes, Systems,
laws andPolicies,
regulations
exist, in practices
Intellectual property
right
Plenary
2: National
and Programs
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Challenges - 2
• Consistency of the government structures
• Essential medicines system established, yet
comprehensively to address issues beyond essential
medicines concept
- Coordination mechanisms for all stakeholders, like
stronger role of insurance in pricing, procurement
and rational use
- Mid and long term national goal for the
pharmaceutical sector, eg. fostering a viable industry
Plenary 2: National Systems, Policies, and Programs
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Challenges and the Way Forward -1
• Credibility and acceptability of selection
- Access to up-to-date and independent evidence to
make informed decisions about quality, safety,
efficacy and cost-effectiveness
- Evidence based principle adopted at all levels of
selection and treatment guideline development
- Guide on dosage form and strength (esp. paediatrics)
- Coordination with the insurance programs
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Challenges and the Way Forward - 2
•
Sustainability of financing (supply side)
- Government investment commitment put into
actions
- Performance evaluation based government
resource allocation to replace simple direct
subsidy
- Stronger role of insurance payment method reform,
changing from retrospective to prospective
payment to remove perverse incentives
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Challenges and the Way Forward - 4
• Affordability
- Pharmaco-economic analysis for setting the prices of
new medicines (and other medicines entitled free pricing
policy) covered by insurance programs
- Develop and implement comprehensive generic policy
a) strengthening quality assurance as pre-condition;
b) generics substitution;
c) consumer & professional education for
appropriate perception of generics;
d) creating incentives for prescribers, pharmacists and
consumers to use generics, eg. selective financing of
generics by insurance programs
- Reduce tax on essential medicines
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Challenges and the Way Forward - 5
• Rational use of medicines
- Health system approaches to improve use of medicines
a) Insurance payment reform to create cost sensitivity
of prescribers
b) Quality of care supervision in collaboration with
insurance programs
c) Public education to build appropriate perception
of medicines and medicine use
d) Prescription behaviors as part of the performance
evaluation system, and liking with the government
subsidy and income allocation
- Comprehensive interventions at all levels of the system
Plenary 2: National Systems, Policies, and Programs
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15 Nov. 2011
Antalya, Turkey
Challenges and the Way Forward - 6
• Security of the quality assurance system
- Strengthen the inspection capacity and pay attention
to quality system rather than focus on hardware
construction
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Antalya, Turkey
Challenges and the Way Forward - 7
• Reliability of the supply system
- Create incentives for public health facilities to
procure essential medicines
- Keep transparency in direct price negotiation
with manufacturers
- Clear and objective quality standard based on
dynamic quality monitoring
- Remove tired system for branded products and
other subjective criteria
- Efficient distribution management
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Challenges and the Way Forward - 8
• Monitoring & Evaluation
- Develop M&E strategies and methodologies for
different level
- Regular data collection and analysis of price,
availability, affordability and use of medicines
- Government fund to support independent
policy research
Plenary 2: National Systems, Policies, and Programs
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Thank you !
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Plenary 2: National Systems, Policies, and Programs