Guizhou Hospitals Latest to Lose Monopoly on Drug Sales
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2017-07-15 08:30:30

Patients in the southwestern province of Guizhou now have a choice when it comes to where they buy their medication. An announcement Wednesday by the provincial government stated that medical facilities in the province cannot stop outpatients from purchasing drugs at commercial pharmacies, ending hospitals’ effective monopoly on prescription drug sales.

The news follows similar announcements made over the last two months in Shanxi and Hebei provinces in the north and Hainan province in the south. The State Council, China’s cabinet, also proposed a nationwide guideline in February challenging the status quo, under which hospitals are currently heavily reliant on revenues from drug sales.

While some Chinese provinces have canceled drug markups by hospitals and made up the deficit with higher consultation fees, the State Council guideline says that according to these most recent efforts to standardize hospital services, outpatients will be encouraged to purchase their medication from retail pharmacies using prescriptions obtained from hospital doctors. “Hospitals that meet relevant conditions could look into completely closing down their outpatient pharmacies,” it read.

Two days after the Guizhou government’s announcement, the First People’s Hospital of Guiyang, the provincial capital, seemed unaware of the new requirements. “Once the local health and family planning commission has conveyed the message to us, we will comply with the new rules,” said an administrative official from the hospital surnamed Zhao.

Zhao told Sixth Tone that at present, the hospital does not encourage outpatients to acquire their medication outside the facility. She declined to reveal further details about the hospital’s practices before the implementation of the new policy.

Local residents, too, are confused about the upcoming changes. “I need to first figure out how we’ll be reimbursed if we buy these drugs from retail pharmacies,” said Guiyang resident Li Qin, “although being offered more choices is always nice.”

Hospitals in other provinces seem to have caught wind, adopting similar schemes. In February, Guangzhou Women and Children’s Medical Center in southern China started requiring adult outpatients to get their medication outside the hospital, which receives 14,000 outpatients a day on average. Wait times to collect prescriptions at the facility range from 20 minutes to an hour.

Party newspaper People’s Daily reported that patients at the Guangzhou hospital are now able to make the five-minute walk to a nearby drugstore, where there is hardly anyone in line to collect medication. “I think it’s a good measure,” a patient from the hospital surnamed He told People’s Daily. “While saving patients from the long wait, the move also serves to further cut down on doctors’ supplementary income.”

Many doctors in China receive payments from pharmaceutical companies based on the amount of medicine they prescribe to their patients. The drugstore reportedly has no business relationship with the medical center.

Outpatient drug sales once accounted for 30 percent of the Guangzhou hospital’s total revenue. Xia Huimin, the center’s director, told People’s Daily that the reduction in revenue can be offset by reduced labor costs and by more effective use of space.

While it is hoped that the new initiative will reduce kickbacks for doctors and eliminate the incentive to overprescribe drugs, experts believe that the hospital management system itself still requires urgent and comprehensive reform.

“If doctors’ incomes continue to depend heavily on how much money patients spend, then there are still flaws in the changes,” Liu Jitong, a professor at Peking University’s School of Public Health, told Sixth Tone in a previous interview. “There should be a complete overhaul of the system.”

Liu believes that while it’s a good thing that patients are being offered more options, doctors’ interests should also be properly guaranteed. “They must get the respect and compensation they deserve,” he said.

Editor: Nuala Gathercole Lam.

(Header image: A pharmacist fills prescriptions for patients at a hospital in Beijing, March 13, 2007. Wang Wen/VCG)