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Pharmaceutical supply chain in China: Current issues and implications for health system reform

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  • Yu, Xuan
  • Li, Cheng
  • Shi, Yuhua
  • Yu, Min

Abstract

Objective This article discusses the performance and distortions of pharmaceutical market in China and provides some reflections and policy implications for currently implemented reform.Methods This study is based on literature review and publicly available data by searching electronic databases and official web pages of the Chinese government on the internet.Results China's economic transition and the incremental and piecemeal nature of health care reform have created a pharmaceutical market with a number of deficiencies, including ineffective supervision, mark-up price pattern, distortion of the price schedule, and lack of authoritative drug formulary.Conclusions We conclude that the root cause of the market and government failures is that higher-than-cost drugs preferred by all suppliers. New drug pricing mechanism is the key to the current pharmaceutical reform and should be implemented in coordination with other health system reforms.

Suggested Citation

  • Yu, Xuan & Li, Cheng & Shi, Yuhua & Yu, Min, 2010. "Pharmaceutical supply chain in China: Current issues and implications for health system reform," Health Policy, Elsevier, vol. 97(1), pages 8-15, September.
    • Handle: RePEc:eee:hepoli:v:97:y:2010:i:1:p:8-15
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    Cited by:

    1. Shu Yan & Lizi Pan & Yan Lu & Juan Chen & Ting Zhang & Dongzi Xu & Zhaolian Ouyang, 2023. "Towards Sustainable Drug Supply in China: A Bibliometric Analysis of Drug Reform Policies," Sustainability, MDPI, vol. 15(13), pages 1-20, June.
    2. Donghui Yang & Yan Wang & Shue Mei, 2021. "How to balance online healthcare platforms and offline systems? A supply chain management perspective," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 502-515, March.
    3. Shaju George & Safaa Elrashid, 2023. "Inventory Management and Pharmaceutical Supply Chain Performance of Hospital Pharmacies in Bahrain: A Structural Equation Modeling Approach," SAGE Open, , vol. 13(1), pages 21582440221, January.
    4. Liu, Kai & Zhang, Qian & He, Alex Jingwei, 2021. "The impacts of multiple healthcare reforms on catastrophic health spending for poor households in China," Social Science & Medicine, Elsevier, vol. 285(C).
    5. Xiaxia Sun & Hongdao Meng & Zhiqiu Ye & Kyaien O Conner & Zhanqi Duan & Danping Liu, 2019. "Factors associated with the choice of primary care facilities for initial treatment among rural and urban residents in Southwestern China," PLOS ONE, Public Library of Science, vol. 14(2), pages 1-14, February.
    6. Yuting Zhang & Qianheng Ma & Yingchun Chen & Hongxia Gao, 2017. "Effects of Public Hospital Reform on Inpatient Expenditures in Rural China," Health Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 421-430, April.
    7. Yi Ran & Yuanyuan Hu & Shouming Chen & Fangjun Qiu & Ahmed Rabeeu, 2022. "The Impact of Two-Invoice System on Pharmaceutical Manufacturers’ Selling Expenses in China: A Difference-in-Differences Approach," IJERPH, MDPI, vol. 19(7), pages 1-18, April.
    8. Yu Xia & Jing Li & Zhongyang Zhang, 2023. "Effects of price cap regulation on pharmaceutical supply chain under the zero markup drug policy," Operational Research, Springer, vol. 23(4), pages 1-27, December.
    9. Laurene PETITFOUR & Xiezhe HUANGFU & Jacky MATHONNAT & Martine AUDIBERT, 2015. "Estimating and explaining the efficiency of township hospitals in Shandong province in the context of the drug policy reform," Working Papers 201517, CERDI.
    10. Mai, Nhat Chi, 2022. "The Impact of Two-Invoice System on Pharmaceutical Manufacturers’ Selling Expenses in China: A Difference-In-Differences Approach," OSF Preprints 68fsb, Center for Open Science.
    11. Wang, Xiaomin & Xuan, Ziming & Storella, Théo H. & Zhou, Xudong, 2020. "Determinants of non-prescription antibiotic dispensing in Chinese community pharmacies from socio-ecological and health system perspectives," Social Science & Medicine, Elsevier, vol. 256(C).
    12. Shiva Zandkarimkhani & Hassan Mina & Mehdi Biuki & Kannan Govindan, 2020. "A chance constrained fuzzy goal programming approach for perishable pharmaceutical supply chain network design," Annals of Operations Research, Springer, vol. 295(1), pages 425-452, December.
    13. Li, Mingqiang & Li, Zhihui & Yip, Chi-Man (Winnie), 2022. "Informal payments and patients’ perceptions of the physician agency problem: Evidence from rural China," Social Science & Medicine, Elsevier, vol. 298(C).
    14. Qin, Xuezheng & Li, Lixing & Hsieh, Chee-Ruey, 2013. "Too few doctors or too low wages? Labor supply of health care professionals in China," China Economic Review, Elsevier, vol. 24(C), pages 150-164.
    15. Suhan Wu & Min Luo & Jingxia Zhang & Daoheng Zhang & Lianmin Zhang, 2022. "Pharmaceutical Supply Chain in China: Pricing and Production Decisions with Price-Sensitive and Uncertain Demand," Sustainability, MDPI, vol. 14(13), pages 1-28, June.
    16. Yao, Ying & Tanaka, Makoto, 2020. "Price-quality trade-off in procurement auctions with an uncertain quality threshold," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 56-70.
    17. Masoumi, Amir H. & Yu, Min & Nagurney, Anna, 2012. "A supply chain generalized network oligopoly model for pharmaceuticals under brand differentiation and perishability," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(4), pages 762-780.
    18. Chen, Xu & Yang, Huan & Wang, Xiaojun, 2019. "Effects of price cap regulation on the pharmaceutical supply chain," Journal of Business Research, Elsevier, vol. 97(C), pages 281-290.
    19. Chen, Xu & Li, Shanshan & Wang, Xiaojun, 2020. "Evaluating the effects of quality regulations on the pharmaceutical supply chain," International Journal of Production Economics, Elsevier, vol. 230(C).
    20. Laurene Petitfour & Xiezhe Huangfu & Martine Audibert & Jacky Mathonnat, 2015. "Estimating and explaining the efficiency of township hospitals in Shandong province in the context of the drug policy reform," Working Papers halshs-01180621, HAL.
    21. Guanfu Fang & Hui Cao, 2020. "State versus private provision: How does China’s market‐oriented reform affect healthcare delivery?," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 28(3), pages 381-411, July.
    22. Zahiri, Behzad & Zhuang, Jun & Mohammadi, Mehrdad, 2017. "Toward an integrated sustainable-resilient supply chain: A pharmaceutical case study," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 103(C), pages 109-142.
    23. Currie, Janet & Lin, Wanchuan & Meng, Juanjuan, 2014. "Addressing antibiotic abuse in China: An experimental audit study," Journal of Development Economics, Elsevier, vol. 110(C), pages 39-51.

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