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Experiences in Implementing the National Medicines Policy - Change in China

Jing Sun National Institute of Hospital Administration, MoH, P.R.China sunjingx@yahoo.com. 15 Nov. 2011 Antalya, Turkey. Experiences in Implementing the National Medicines Policy - Change in China. Plenary 2: National Systems, Policies, and Programs. 15 Nov. 2011 Antalya, Turkey. Contents.

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Experiences in Implementing the National Medicines Policy - Change in China

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  1. Jing Sun National Institute of Hospital Administration, MoH, P.R.China sunjingx@yahoo.com 15 Nov. 2011 Antalya, Turkey Experiences in Implementing the National Medicines Policy- Change in China Plenary 2: National Systems, Policies, and Programs

  2. 15 Nov. 2011 Antalya, Turkey Contents • Background of the National Health System Reform • Medicine Sector Reform as Part of the National Health System Reform • Essential Medicines System as Foundation of the National Medicines Policy - Contents - Progress and Achievements - Challenges and the Way Forward Plenary 2: National Systems, Policies, and Programs

  3. 15 Nov. 2011 Antalya, Turkey Backgroundof the National Health System Reform - 1 • Consensus of developing well-off society as the top priority of the country • Fast economic growth allows more government investment and public expense • Recognition of health as the foundation of human development by the national top political leaders, and strong political willingness of coordinating the social & economic with the health development • People’s complains of poor access to quality basic health care both physically and financially Plenary 2: National Systems, Policies, and Programs

  4. 15 Nov. 2011 Antalya, Turkey Backgroundof the National Health System Reform - 2 • Availability - Poor access to services in remote rural areas - Out of stock of key essential medicines (expensive alternatives available) in urban areas • Affordability - Soaring health and medicines expenditure - High proportion of pharmaceutical to health expenditure - High proportion of out of pocket expenditure Plenary 2: National Systems, Policies, and Programs

  5. 15 Nov. 2011 Antalya, Turkey Backgroundof the National Health System Reform - 3 • Quality - Public perception of local products with poor quality • Rational use - Irrational prescription and unnecessary care intensified by the perverse incentives a) distort pricing system b) retrospective fee for service payment c) health facilities have to rely on costly medicines and diagnostic equipment, and poly-pharmacy to compensate weak government investment - Implications of huge wastes of limited resources, alarming burden of drug resistance, adverse drug reaction/event Plenary 2: National Systems, Policies, and Programs

  6. 15 Nov. 2011 Antalya, Turkey Background - Availability Source: WHO/HAI medicine prices, availability, affordability and price components survey Plenary 2: National Systems, Policies, and Programs

  7. 15 Nov. 2011 Antalya, Turkey Background - Affordability Total health expenditure in China (CNY 100,000,000) Total medicines expenditure in China (CNY 100,000,000) Source: National Health Account 1990-2010 Plenary 2: National Systems, Policies, and Programs

  8. 15 Nov. 2011 Antalya, Turkey Background - Affordability • Total health expenditure: 5.13% GDP • Pharmaceutical expenditure: 44.5 % health expenditure • Government health expenditure: 27.23 % total health expenditure; 6.18% total government budget • Private health expenditure: 38.19% health expenditure Source: Annual Yearbook of China Health Statistics 2009 and National Health Account 2009 Plenary 2: National Systems, Policies, and Programs

  9. 15 Nov. 2011 Antalya, Turkey Background – Quality Perception Source:South Pharmaceutical Economic Research Institute of SFDA 2009 Plenary 2: National Systems, Policies, and Programs

  10. 15 Nov. 2011 Antalya, Turkey Background – Quality Perception • Switching from originator brands to lowest-priced generics in Chinese public hospitals for a limited basket of medicines in 2008 - Total potential cost savings:$ 86,492,276 - Average percentage savings: 65.1% Source:World Health Report 2010 Plenary 2: National Systems, Policies, and Programs

  11. 15 Nov. 2011 Antalya, Turkey Background – Rational Use • 57%/61%/66% prescriptions in the urban and rural health centers and village clinics include antibiotics • 33%/39%/30% prescriptions in the urban health centers/stations/rural health centers include infusions • The isolate rate of Methicillin Resistant Staphylococcus Aureus (MRSA) is over 60% in clinical settings • The incidence of highly macrolide-resistant streptococcus is over 80% Source:Chinese national health service survey 2008 and the Report of National Antimicrobials Resistance Monitoring Network 2006 Plenary 2: National Systems, Policies, and Programs

  12. 15 Nov. 2011 Antalya, Turkey Medicine Sector Reform as Part of the National Health System Reform • Government restructure - Drug regulatory authority back to the governance of MoH - National medicines policy issues shift from the drug regulatory authority to a newly established Department of MoH • High level political commitment UNIVERSAL coverage of safe, efficient, convenient and affordable ESSENTIAL health care system, including - Public health service system - Medical service system - Medical security system - Essential medicines system Plenary 2: National Systems, Policies, and Programs

  13. 15 Nov. 2011 Antalya, Turkey Essential Medicines System as Foundation of the NationalMedicines Policy - 1 • Establish the State Council Health System Reform Leading Group, composing 16 ministries for coordination and collaboration • Resume the development of the national medicines policy since 2004 • Conduct Healthy China 2020 research initiative, covering each aspect of the national medicines policy in 2008, but not officially published and legitimately implemented Plenary 2: National Systems, Policies, and Programs

  14. 15 Nov. 2011 Antalya, Turkey Essential Medicines System as Foundation of the NationalMedicines Policy - 2 • Objective - Secure the accessibility, quality and rational use of medicines - Focus the equity, sustainability and comprehensive reform of the public primary care facility • Select essential medicines to guide the supply, financing, reimbursement, quality assurance and rational use Plenary 2: National Systems, Policies, and Programs

  15. 15 Nov. 2011 Antalya, Turkey Contents - 1 • Supply: pooled procurement of essential medicines • Pricing: price cut (both originators and generics), same maximum retail and reimbursement price under generic name for newly covered medicines by insurance programs • Financing: government subsidy to both sides - Demand side: essential medicines covered by insurance programs - Supply side: remove mark-up on medicines, and performance based government subsidies to public primary care facilities Plenary 2: National Systems, Policies, and Programs

  16. 15 Nov. 2011 Antalya, Turkey Contents - 2 • Reimbursement:improvedbenefit package • Quality: electronic coding; routine sampling and testing • Rational Use: health system approach - Training on standard treatment guidelines & formularies - Removing perverse incentives (price adjustment, insurance payment reform, zero mark-up on medicines) • Comprehensive reforms (public primary care facilities) - Government procurement platform - Performance based government subsidy and income allocation Plenary 2: National Systems, Policies, and Programs

  17. 15 Nov. 2011 Antalya, Turkey Progress and Achievements - 1 • System construction by coordinated ministerial actions - 205 western medicines and 102 TCMs selected for primary care (health) - Zero mark-up on medicines in all public primary care facilities across 31 provinces (health, finance) -Standard treatment guideline & formulary training (health) - Adjusted prices (pricing) - Improved insurance benefit package (social security) - Provincial pooled procurement (health and regulatory) - Quality assurance (regulatory) - Increase government subsidy to public facilities (finance) - Strengthen rural primary care staff (human resource, finance) Plenary 2: National Systems, Policies, and Programs

  18. 15 Nov. 2011 Antalya, Turkey Progress and Achievements - 2 • Comprehensive reforms in public primary care facilities - Procurement: contract manufacturers directly with committed quantity; pooled payment via provincial government account; 31 provinces set up government procurement platform, 68.1% counties set up electronic procurement system; 26 provinces initiated new rounds of procurement following the reform - Comprehensive reforms: 25/31 provinces set up performance based government subsidy and income allocation mechanism; 24/31 provinces adjusted the diagnostic and treatment service fee; varies approaches to subsidize village doctors (fees, insurance outpatient coverage, public health service subsidy, basic salary and pension security) Plenary 2: National Systems, Policies, and Programs

  19. 15 Nov. 2011 Antalya, Turkey Progress and Achievements - 3 • Reimbursement - 90% areas cover outpatient service - Reimbursement rates of rural insurance and urban resident insurance for inpatient service reach 60%-70% - Insurance payments shift from retrospective fee for service to prospective case based, capitation, and budget control or mixed payment (pilots) • Quality - Newly revised GMP to be fully implemented by 2015 • Intellectual property right - Compulsory License Provision 2005 - Newly revised Patent Law 2008 - Compulsory license process explored in 2011 Plenary 2: National Systems, Policies, and Programs

  20. 15 Nov. 2011 Antalya, Turkey Challenges - 1 • Group of policies addressing every aspects of the pharmaceutical issues exist, but not an official comprehensive full document covering all Plenary 2: National Systems, Policies, and Programs

  21. 15 Nov. 2011 Antalya, Turkey Challenges - 2 • Consistency of the government structures • Essential medicines system established, yet comprehensively to address issues beyond essential medicines concept - Coordination mechanisms for all stakeholders, like stronger role of insurance in pricing, procurement and rational use - Mid and long term national goal for the pharmaceutical sector, eg. fostering a viable industry Plenary 2: National Systems, Policies, and Programs

  22. 15 Nov. 2011 Antalya, Turkey Challenges and the Way Forward -1 • Credibility and acceptability of selection - Access to up-to-date and independent evidence to make informed decisions about quality, safety, efficacy and cost-effectiveness - Evidence based principle adopted at all levels of selection and treatment guideline development - Guide on dosage form and strength (esp. paediatrics) - Coordination with the insurance programs Plenary 2: National Systems, Policies, and Programs

  23. 15 Nov. 2011 Antalya, Turkey Challenges and the Way Forward - 2 • Sustainability of financing (supply side) - Government investment commitment put into actions - Performance evaluation based government resource allocation to replace simple direct subsidy - Stronger role of insurance payment method reform, changing from retrospective to prospective payment to remove perverse incentives Plenary 2: National Systems, Policies, and Programs

  24. 15 Nov. 2011 Antalya, Turkey Challenges and the Way Forward - 4 • Affordability - Pharmaco-economic analysis for setting the prices of new medicines (and other medicines entitled free pricing policy) covered by insurance programs - Develop and implement comprehensive generic policy a) strengthening quality assurance as pre-condition; b) generics substitution; c) consumer & professional education for appropriate perception of generics; d) creating incentives for prescribers, pharmacists and consumers to use generics, eg. selective financing of generics by insurance programs - Reduce tax on essential medicines Plenary 2: National Systems, Policies, and Programs

  25. 15 Nov. 2011 Antalya, Turkey Challenges and the Way Forward - 5 • Rational use of medicines - Health system approaches to improve use of medicines a) Insurance payment reform to create cost sensitivity of prescribers b) Quality of care supervision in collaboration with insurance programs c) Public education to build appropriate perception of medicines and medicine use d) Prescription behaviors as part of the performance evaluation system, and liking with the government subsidy and income allocation - Comprehensive interventions at all levels of the system Plenary 2: National Systems, Policies, and Programs

  26. 15 Nov. 2011 Antalya, Turkey Challenges and the Way Forward - 6 • Security of the quality assurance system - Strengthen the inspection capacity and pay attention to quality system rather than focus on hardware construction Plenary 2: National Systems, Policies, and Programs

  27. 15 Nov. 2011 Antalya, Turkey Challenges and the Way Forward - 7 • Reliability of the supply system - Create incentives for public health facilities to procure essential medicines - Keep transparency in direct price negotiation with manufacturers - Clear and objective quality standard based on dynamic quality monitoring - Remove tired system for branded products and other subjective criteria - Efficient distribution management Plenary 2: National Systems, Policies, and Programs

  28. 15 Nov. 2011 Antalya, Turkey Challenges and the Way Forward - 8 • Monitoring & Evaluation - Develop M&E strategies and methodologies for different level - Regular data collection and analysis of price, availability, affordability and use of medicines - Government fund to support independent policy research Plenary 2: National Systems, Policies, and Programs

  29. 15 Nov. 2011 Antalya, Turkey Thank you ! Plenary 2: National Systems, Policies, and Programs

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