China Issues List of 307 Essential Drugs Including 102 TCMs

Yesterday China's MoH released the country's latest Essential Drug List, which includes 205 chemical and biological medicines and 102 traditional Chinese medicines (TCMs), as part of China's ongoing national healthcare reform.

The list of drugs covers a broad variety of therapeutic areas with major and basic medical needs such as cardiovascular, immunology, urology, mental health, central nervous system and viral diseases. The list also includes drugs such as anti-HIV treatments provided by the country free of charge and vaccines already in national immunisation programmes.

Prior to the new essential drug list, China's latest version of basic drugs was released in 2004, which contained some 2,000 medicines. According to the health authorities, the list is subject to adjustment every three years.

The Establishment of Essential Drug System Kicks Off

With the release of the Essential Drug List, the Chinese health authorities have officially launched the establishment of the essential drug system in the county. All the drugs in the list will be included in the country's basic health insurance catalogue with a higher reimbursement percentage, which is expected to be finalised by the end of this year. Meanwhile, the pricing of the essential drugs will be decided by the governments through public tender at the provincial level. The target of the system in 2009 is to make sure that 30% of government-controlled community medical institutions will stock and sell essential drugs with zero profit margin. In addition, the distribution of essential drugs will also be carried out through unified channels by either drug manufacturers or drug distributors.

Outlook and Implications

The release of the Essential Drug List in China has been delayed from April due to the difficulty in balancing the interest of drug manufacturers and distributors. The number of drugs included in the list has also been reduced. However, its release is still a major step in China's healthcare reform, which has improved the affordability and accessibility of drugs as one of the five priorities. The requirement of the essential drug system is inevitably to largely reduce drug prices through measures like public tenders.