Medical Institutions and Hospitals Should be Separated

In Chinese medicine to support medical institutions, hospitals and doctor’s interests need to be compensated by selling drugs. Public medical institutions in fiscal revenue accounted for only about 10% through the sale of medicines and hospitals need to provide medical services to maintain the normal operation of the hospital. Public medical institutions in the pharmaceutical income accounted for nearly 90%, while pharmaceutical revenue is about 45% of sales of drugs.

Lead to drugs to support medical drugs in total sales of nearly 80% in sales of medical institutions. In recent years, the proportion and appears slightly upward trend, from 70% in 2007 and gradually increased to 13 years 77%.

Unlike the United States of drugs to support medical system, its channel structure of the pharmaceutical market and China the opposite. US prescription drug sales in the medical institutions accounted for less than 30%, more than 70 percent of prescription drugs to achieve sales in the retail channel.

Monopoly medical channels to allow the pharmaceutical major sales in this lengthy and inefficient channels. Hospital sources supply chain lengthy and complex, and there are more participants have the monopoly of resources, high transaction costs. In contrast, under a flat and efficient retail pharmacy chain in each participant in a highly competitive environment, competition and improve efficiency.

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