Beijing ends hospital markups on drug prices

Beijing announced Wednesday public hospitals will end markups on drug prices to separate medical treatment and drug sales, and to lower costs to patients.

Drug price were previously marked up by up to 15 percent but this will be disallowed in over 3,600 hospitals and medical institutions in the city from April 8.

Instead, Beijing will mandate transparent drug purchase, choosing suppliers by open bids and having drug and producer information fully disclosed.

Registration and treatment fees will be replaced by a medical service fee of between 50 yuan (7.3 U.S. dollars) and 100 yuan. Medical insurance will cover 40 yuan of the fee.

Fang Laiying, head of Beijing municipal health bureau, said the reform aims to break the system of covering hospital expenses with drug sales.

"Separating treatment and drug sales will cut off the channel of making money through over-prescription, and help medical practitioners provide more and better treatment services," he said.

Due to poor government funding, public hospitals have relied heavily on markups on drugs, high fees for examinations and sales of materials such as bandages, creating an incentive for doctors to over-prescribe and advise unnecessary check-ups.

Li Bin, minister of the National Health and Family Planning Commission, said the move in Beijing will improve medical services, control rising medical costs and reduce the economic burdens of patients, a demonstrative role for medical reform.