Medical Reform

• Drug prices continue to dominate headlines with news that basic drug prices may be further reduced by 30 to 40%. Separately, fewer imported drugs are expected on the essential drug lists some community health organizations use.
• The NDRC is to investigate reports of price increases by some companies whose pharmaceuticals qualified for the drug reimbursement listing. Separately, the MOH announced plans to conduct an evaluation of the progress of medical reform that will involve international organizations such as the WHO.
• The Gaozhou hospital reform model drew national attention for its ability to improve health services at a reduced cost through market-based solutions. On the other hand, Shenmu’s hospital reform model, which offers universal coverage through government financing, also showed promise for creating win-win outcomes for patients, hospitals, and government alike. Of note is that the Shenmu model includes private hospitals for providing public-financed care. Additional information on the Shenmu experience can be found here.
• News reports link Johnson & Johnson Medical to the latest scandal at the SFDA, which saw the removal of a high-ranking official over suspected bribery charges. The company has since issued a public statement noting that it has not received any official notice relating to the case and reiterating the company’s stance to abide by Chinese laws and regulations.
• Several incidents of patients stabbing doctors prompt a commentator to urge the government to address the issue of doctor-patient relations in the medical reform.

Business Initiative

• GE Healthcare To Launch Ecosystem In Greater China (Link to full English text)
• Eli Lilly Sets Plans for Emerging Markets (Link to full English text)
• AstraZeneca answers the great call of China (Link to full English text)
• IBM, Chinese hospital start med project (Link to full English text)
• Eli Lilly and Company not to acquire swine vaccine business in China from Pfizer (Link to full English text)
• Abbott targets better nutrition with new R&D facility in Singapore (Link to full English text)

Health & Awareness

• China announces plans to expand and build hospitals dedicated to the treatment of mental illness. The government also announced that medical records have been established for 900,000 patients suffering from critical mental illnesses.
• China eyes milk test after melamine deaths scandal (Link to full English text)
• For China’s Growing Middle Class, Expanding Waistlines Pose Problem (Link to full English text)
• Medical Tourism: A vacation from the reality of high-cost healthcare (Link to full English text)

Public Health

• China, U.S. to enhance collaboration in public health (Link to full English text)
• H1N1 Flu Acts Much Like Its Seasonal Cousin (Link to full English text)

Additional News from the Greater China and Other Markets:

Hong Kong

• Health facts to chew over as scheme starts – A new nutritional labeling scheme took effect from 1 July, 2010 which applicable to 4,000 types of prepackaged food in Hong Kong. (Link to full English text)
• New name takes the ‘crazy’ out of epilepsy – The Chinese name for epilepsy has officially changed to avoid connotations of madness and to prevent discrimination by those who confuse it with mental illness. (Link to full English text)
• Sixth school shut by foot and mouth – A few schools were closed to stop the spreading of foot and mouth disease. The usual peak season in Hong Kong for HFMD and EV71 infection is from May to July. EV71 infection can have severe complications. (Link to full English text)

Taiwan

• Taipei health department collects 1.5 tons of discarded medicines. (Link to full English text)
• DOH sets limit for medical fees. (Link to full English text)
• Healthcare system lets many down – a commentary on the current healthcare system in Taiwan (Link to full English text)
• First fatal case of Japanese encephalitis in 2010 confirmed; Taiwan CDC urges public to protect themselves from mosquito bites and make sure children receive appropriate vaccination. (Link to full English text)

Singapore

• Singapore General Hospital gains elite status. (Link to full English text)
• Researchers in Singapore make breakthrough in treatment of septic shock. (Link to full English text)
• Govt says no to posting of docs’ fee guides. (Link to full English text)

Korea

• Samsung ventures into medical device market. (Link to full English text)
• Weight-loss drugs raise health threat in Asia. (Link to full English text)
• Jeju to become international business hub – it is in the perfect location to become premium tourism, medical and educational hub in Northeast Asia. (Link to full English text)

Medical Reform

According to Securities Daily, the NDRC may be considering to reduce basic drug prices by 30 to 40%:

• A number of pharmaceutical enterprises and associations have received a notice to submit commentaries review on a proposed measure for drug price administration.
• An insider revealed that this round of price reduction may be as high as 30 to 40%. The official announcement is expected this month.
• This will mark the 26^th round of price reduction in China.

Hangzhou Daily reported that expensive imported pharmaceuticals to significantly decrease in community health organizations. According to the report:

• A number of community healthcare organizations in the test pilot districts are leading the effort to implement the National Essential Drug System.
• Expensive imported medicines will see a significant reduction. Replacing them will be cheap domestically produced medications. Most importantly, 457 types of basic drugs will be sold to patients at cost. The number of medications available (900) will be reduced by half.
• The antibiotics category saw the most significant reduction in the national and provincial drug lists. In the past, 72 types of antibiotics were available in community health facilities; now only 13 are available.
• A formulary administrator commented that the measure will help reduce antibiotic abuse, in particular, patients’ over-reliance on branded antibiotics.

A news program on the Voice of China reported that the NDRC is to investigate reports of price increase of reimbursement listed drugs:

• in 2009, the National Drug Reimburesement List saw an increase of 260 types of medications, of which 30 of them raised their prices immediately prior to listing.
• The National Development and Reform Commission (NDRC) has urgently responded that this type of conduct will be thoroughly investigated.

Minister of Health Chen Zhu disclosed that China is drafting a proposal to evaluate the progress of the medical reform:

• The evaluation method will perform a scientific analysis of the medical reform work and draw up a summary of what was learned from the experience to guide future improvements.
• China plans to invite the World Health Organization and others to participate in the evaluation work.

According to Guangzhou Daily, the “Gaozhou Model” is receiving widespread national attention:

• Within two months, 52 delegates from 12 provinces have visited Gaozhou Hospital to learn from its hospital reform experience.
• After their visits, the delegates praised the Gaozhou model as being able to “provide high-quality medical technology at a low price point. The hospital has successfully provided a triple-win solution to patients, government, and hospitals through market competition that also realizes the public welfare missions of public hospitals.”
• Gaozhou Hospital is a provincial-level hospital that offers up to 2,360 hospital beds and 63 specialty departments. In 2009, it achieved a hospitalization rate of 60,600 persons. Patients come from over 23 provinces in China, as well as from the U.S. and Indonesia.
• According to a review report by the Guangzhou Health Office, “The quality of medical service has not declined due to this high level of patient volume. In 2009 alone, the hospital performed 1,801 cardiovascular procedures with a success rate of 98.9%. This has allowed the hospital to enjoy a high provincial and national rank for 12 consecutive years.”
• Gaozhou Hospital also offers other medical specialties that are usually available only in provincial Level III hospitals. The hospital has succeeded in providing these highly difficult procedures often at half the cost of provincial-level hospitals. Such a feat has been achieved through stringent control of medical costs and a market-based strategy of “low cost and high volume.”
• A counselor of the State Council concluded after visiting the hospital that “the experience of Gaozhou People’s Hospital has clarified many misconceptions in public hospital reforms. It has offered an effective pathway for the public to access care at a low cost.”

Separately, the Oriental Outlook reported on the Shenmu experience:

• The party secretary of Shenmu district’s commission, Guo Baocheng, commented that from an economic perspective, Shenmu’s “universal healthcare coverage” allowed the government to make a profit. Shenmu is in the Shaanxi province. His comment ignited avid discussions among scholars and consultants of seven international think tanks who were attending a meeting.
• According to Guo, although Shenmu was among the regions most impacted by the financial crisis, the district registered a consumption growth of 22%, the government’s net fiscal revenue grew by 2.1 billion yuan. The net income of rural (farm) residents grew by 1,000 yuan, while urban residents’ average disposable income increased by 3,000 yuan.
• Guo believes that these numbers have a direct or indirect relationship to the universal healthcare coverage. According to Guo, “Based on my personal perspective, from an economic perspective, investments in social welfare are a high return investment.”
• While some experts endorse the analysis, some remain cautious, as the Shenmu model has only been implemented for a year. A separate study by a professor at Peking University on the urban basic healthcare insurance in Beijing concluded that the measure contributed to a 5% increase in consumption.
• During the interview, Guo offered that the Shenmu model has succeeded by avoiding the debate between adjusting the demand or supply side of healthcare to solve the problems. Instead, the model directly addresses the needs of the people. From his perspective, healthcare and pharmaceutical reforms are very problematic territories, so Shenmu has avoided these areas entirely in its reform.
• Of the seven hospitals designated for providing universal healthcare coverage on one is a public hospital. This reform experience has invited the comment of an official at the Ministry of Health that “the plan can help the control cost. Some issues are resolved through market practices. This needs to be further observed.”
• Wang Zhenyao，a director of the social welfare and charity promotion office of the Civil Affairs Ministry, estimates that China only needs to spend 430 billion yuan to implement universal healthcare coverage nationwide.
• Other experts have advocated for the mainland to consider the Hong Kong model of providing universal healthcare coverage. Government officials and scholars, however, have questioned the financial sustainability of the Hong Kong model during previous public addresses.

A deputy chief of the State Food and Drug Administration (SFDA), Zhang Jingli, has been removed from post and faces official investigation:

• Insiders reported that Zhang is implicated in a corruption investigation involving Johnson & Johnson Medical and other medical device companies.
• Industry insiders further speculate that corruption charges most likely involved the registration permit for a medical device in China. The application process for the permit usually takes between one to two years for the collection of supplementary clinical data. The permit also requires re-application every four years. Insiders speculate that the product involved may be Lifescan.
• Johnson & Johnson Medical (the maker of Lifescan) and Roche dominate 60 to 70% of the blood sugar meter market in China.

Johnson & Johnson Medical issued a statement relating the case:

• The statement announced that the company has yet to receive a notice from the government regarding an investigation of the company in relation to Zhang Jingli’s case.
• The statement further reiterated the company’s commitment to abide by all SFDA laws and regulations and other related Chinese laws.

A commentary reported that the deteriorating work environment for doctors is a hidden threat in the success of medical reform:

• Several cases of violence against medical professionals have been reported in the media. One case involved a deputy director in a Hubei hospital who was stabbed in the chest. The director survived the attack. Another case involved two incidents of the stabbing of medical personnel in Shandong, which resulted in one death and one critical injury. The perpetrators in these cases were all patient family members.
• A February 2002 survey conducted by the China Physician Association showed that 60% of doctors indicated dissatisfaction with their work environment.
• The commentary further cited a similar survey in 2009 that still showed that over 60% of physicians are dissatisfied with their working conditions. The report concluded that doctors in general fear for their physical safety and do not feel an assurance of personal dignity while at work. Medical disputes were cited as the key factor negatively impacting their working environment.
• The commentary urged government authorities to give more attention to the issue of physician-patient relations to address this hidden threat to the success of medical reform.

Health & Awareness

China to Improve Treatment Rate for Critically Ill Mental Patients:

• The deputy minister of health Yin Li disclosed during a recent meeting that China plans to improve the rate of treatment for critically ill mental patients in order to reduce threats to society.
• The government also plans to expand and build 550 psychological hospitals to strengthen the work of mental illness prevention, treatment, and convalescence.
• He further indicated that medical records for 900,000 critically ill mental patients have been established.