China plans to set up "basic medicine system"

Struggling to control rising drug prices, China is pining hopes on a "basic medicine system" to quell public complaints of limited accessibility of medicines.

"High drug prices are the major reason for high medical expenses. The key to this problem is to set up a basic medicine system," China's Health Minister Gao Qiang told reporters on the sidelines of the ongoing parliamentary session.

The system, which includes a catalogue of necessary drugs that would be produced and distributed under government control and supervision, can help ensure the accessibility to a range of basic medicines and prevent manufacturers and business people from circumventing existing price controls, Gao said.

In the late 1970s and early 1980s, the central government reduced its health care funding, resulting in deficits for public health institutions. This move forced hospitals to generate their own revenue by aggressively selling drugs.

To stem the tide of rising public complaints about high medical costs, China's National Development and Reform Commission (NDRC) has capped the cost of hundreds of drugs.

However, critics argue that the price cuts have not been the cure since drug manufacturers often change the name and packaging of their drugs to escape price controls.

Some hospitals and clinics have also turned a blind eye to government price caps and refused to prescribe lower priced alternative drugs.

Gao said disorders are seen in the drug production, distribution and use, which not only cause high drug prices but also upset the public. "I myself am also very dissatisfied."

He said the catalogue can be set up on the basis of 300 to 400 drugs that recommended by the World Health Organization every year.

"The government must take actions to tighten control and supervision of the production, purchasing and distribution of the drugs to ensure that they are safe and sold at affordable prices," he said.

Drug pricing in China currently falls with the jurisdiction of several departments, including the NDRC and the State Food and Drug Administration.

China not a threat to global energy security

Ma Kai, minister of the National Development and Reform Commission, meets the press on the sidelines of the ongoing Nagional People's Congress session in Beijing March 6, 2007. [Xinhua]

China poses no threat to world energy security as the country's consumption and import are low, said Ma Kai, the minister of National Development and Reform Commission Wednesday.

China's per capita oil consumption in 2005 is 242 kilograms, compared with the world average of 590 kilograms, over 3 tons in the US and 1.9 tons in Japan, noted Ma on the sidelines of the National People's Congress session.

For per capita oil import, the figure in China is 100 kilograms, 400 for the world average, 2.1 tons for the US and roughly 2 tons for Japan, added the minister.

"So I can't imagine why some people are saying that we, with a low consumption and import, pose a threat to global energy security, instead of those countries with high consumption and import, " said Ma. "It is unfair."

The minister went on to describe China as an active factor to maintain global energy security. "As a developing country, China, on its own, solved the problem of providing energy for 22 per cent of the world's population," said Ma. "This is a tremendous contribution to world energy security."

"In a word, China did not, does not and will not pose threat to the global energy security, "noted Ma.

Ma China has been making active efforts to establish oil reserves to ensure national energy and economy safety.

In line with international practice, petroleum will be stored at oil bases by both government and enterprise. "The two sectors of the oil reserve system are well underway," said Ma, noting that it takes time to make the reserves perfect.

Wei Liucheng, Communist Party chief of China's southernmost province of Hainan, said Tuesday the province is actively seeking to establish an oil reserve base.

Though declined to give more details, Wei said the provincial government is negotiating with international petroleum syndicates on the issue and "Hainan boasts distinctive advantages for building both national strategic oil reserve base and commercial oil reserve base."

He pointed out that the tropical island is located near the main international sea routes for oil shipping, and that a 300,000- ton crude oil wharf is already in operation in the Yangpu Economic Development Zone on the island.

On China's economic growth rate, Ma told the country to shun off a blind pursuit of GDP growth, calling for an improvement of the quality of the economic development.

The lowering of this year's GDP growth target to 8 per cent aimed to encourage the country to focus on transforming the growth mode, adjusting structures and improving the quality of economic development, said Ma.

China's GDP registered a 10.7 per cent last year, the fourth year in a row that saw a double-digit growth. While believing the speed is normal, the minister expressed his worries as "the price paid for the economic development is too high".

The minister explained why Premier Wen Jiabao failed to mention this year's target in energy conservation and pollution reduction which are determined by various factors. Some measures may produce visible outcomes within the year while others may take effect years later, noted the minister.

But the central government's determination has not changed, said Ma, adding that the government's efforts and achievement in this field could be judged in a five-year perspective.

The minister rejected the suggestion that China triggered the recent global stock market rout, echoing an earlier statement by Shang Fulin, chairman of the China Securities Regulatory Commission.

"China's stock market is relatively small in scale and the full convertibility of renminbi, the Chinese yuan, under capital accounts have not been carried out, " said Ma.

"As a result, the Chinese equity market will not have great influences on the global market. "