More reform needed in health care sector

BEIJING -- China's recent crackdown on suspected economic violations committed by multinational drug companies has shown the authorities' determination to curb high medical prices.

However, this goal can only be achieved through even deeper reforms.

Beijing authorities established a joint investigation team on Saturday to probe French drugmaker Sanofi, which reportedly offered bribes totaling 1.69 million yuan ($274,048) to doctors around the country.

The investigation follows a scandal involving British pharmaceutical giant GlaxoSmithKline (GSK) China, which has been under investigation for suspected bribery and tax-related offenses since early July.

An initial investigation found that GSK China expanded its sales by offering bribes to doctors and hospitals, pushing up drug prices and undermining the interests of Chinese patients.

Increasing costs, as well as tensions between doctors and patients, have ignited debate and concern among the general public, as health care is a matter of great importance for many people.

But there is still a long way to go in resolving these issues, as the cases involving GSK China and Sanofi are just the tip of an iceberg.

The companies' alleged practices are not exclusive to those companies, but are in fact regular occurrences within China's health care industry. Chinese pharmaceutical companies also expand sales by maintaining close relations with doctors and hospitals, including through bribery.

The practices originate from the way in which China's health care system is set up. Health care service prices are strictly controlled, leading some public hospitals to cover their expenses with revenues generated from expensive medication.

The system provides channels and incentives for doctors to prescribe excessive amounts of medication at high prices, leading to complaints from patients and large profits for both drug producers and hospitals.

Multiple health care reforms have been introduced in recent years, including more funding that has allowed the health insurance system to cover 95 percent of the country's population. However, these reforms have not addressed the rising cost of medication.

Investigations into companies that engage in price-inflating practices won't do the trick either. Only even greater reforms can break the business model used by hospitals and allow them to obtain funding through means other than jacking up the price of medicine.

Deng Haihua, spokesman for the National Health and Family Planning Commission (NHFPC) said last week that the commission is working to stop corruption at its source by reforming public hospitals.

Authorities are trying to stop public hospitals and their doctors from profiting by overprescribing medicines by raising salaries so that medical workers can have decent and sustainable legal incomes, Deng said, adding that efforts will be made to build an open and transparent public bidding platform for medicines and medical equipment.