A state initiative to reduce intermediaries in China’s pharmaceutical market is expected to more than halve the number of companies in the sector, but experts say the government will struggle to achieve its aim of cutting drug prices and tackling bribery in distribution chains.
The vast majority of China’s $110bn annual pharmaceutical sales are to state-run hospitals, which depend on drug and medical equipment sales for most of their revenue. Drug sales are conducted through a byzantine network of some 13,500 distributors, with kickbacks to doctors rife.
Regulations limiting the number of invoices between drugmakers and hospitals to a maximum of two will be rolled out nationwide by next year, the State Council said last month. The number of drug distributors is expected to plummet as a result.