Study On The Compensation System Of Adverse Drug Reaction

The human beings have a history of several thousand years in applying medicine to cure diseases. As a dominant tool for preventing and curing diseases, medicine plays a significant role in securing human health and promoting the development of social civilization. But meanwhile, in the process of applying medical drugs which are hoped to function for medically treating the diseases, there have been occurrences of harmful effects which are irrelevant and even contrary to the objective of using the drugs. In the last century, the incidents caused by unproperly using thalidomide, sulfanilamide elixir and etc. set off the alarm to prevent prople from ADR. The incidents of negative impacts by LongDanXieGan pill,puerarin injection, houttuynia injection, and etc. occurring in recent years in China further indicate the"double-edged sward"feature characterized by medical drugs. Namely, medical drugs have the function of preventing and curing diseases, but meanwhile would also cause unexpected harmful reaction irrelevant or contrary to the treatment objective. In real life, the increasingly more ADR incidents of body damages as well as the disputes or law suits because of ADR set drug's reasonable application in dilemma.In abroad, since German's Thalidomide Incident happened in 1957, Germany, the United States, Japan, Sweden, and Taiwan region in China have established ADR compensation systems relevant to resolve damages caused by medical drugs. However starting from 1988 domestically, we have only been trying to implement the monitory work on the Adverse Drug Reaction (hereinafter referred to as ADR), on the basis of introducing the experience from abroad. Despite of increasingly more incidents of adverse reaction to drugs occurred recently, the establishment of such a compensation system hasn't been set on agenda. In 1989, the Monitory Center was established by the Ministry of Health for the purpose of monitoring ADR cases and, in March of 1989, officially joined WHO's international cooperation center for monitoring drug application. In 1999, this Center began to be administered by the State Drug Administration. In November of the same year, the monitory and ADR management measures(trial) were promulgated. In 2001, a feedback system was built up and put into service to reflect ADR situation and, meanwhile, relevant monitory centers were founded in 31 provinces and cities throughout China by 2002. In March of 2003, ADR monitory and management measures to were formally put into practice and has currently been formed into an ADR network monitory and reporting system from various regions to the state level throughout out China. Nevertheless, a system for compensating negative effects caused by medical drugs hasn't yet been put on the agenda. Some domestic scholars, with reference to the existing systems abroad, appeal for the establishment of relevant compensational systems. In this regard, this paper will begin with the establishment of ADR compensation systems and then analyze or compare such systems'key factors both abroad and at home. Furthermore, a deep analysis will be adopted using AHP, willingness to pay (WTP), multi-element linier regression and other methods to expound and prove each of these factors possibly existing in the proposed system for drug negative effects. All this is aimed at providing options for the government to choose when it decides on establishing or implementing such compensational systems.Firstly, as focused on the purpose of establishing an ADR compensation system, my research applies a comparative method to analyze the each phase of currently existing systems at home and abroad and illustrates what needs to be improved in the proposed system. We've realized from the research that specific laws need to be defined beforehand to back up the establishment of such a system, on the basis of which, compensation will be properly applied to the recipients or beneficiaries who are entitled to. Besides, financial aspect is a significant factor for the compensation system, such as fund management and where it comes from. Other factors like the relation between drug and affected patients, verification of damage extent, compensation criteria, and etc. are also important factors for the system. According to the current domestic situation, there is a blank area in this respect as China has no specialized law to regulate or manage the compensation for drug damage. Therefore, the research work relevant to such system's key factors has almost been blank. This paper reveals some potential factors to consider for the purpose to lay a solid foundation for later phases of work.Secondly, through AHP and composite index analysis in the research, my goal is to resolve the issue into various component factors and then leverage their relations to each different level, forming a hierarchical structure model to be applied to analysis and comparison. Eventually, The study obtained the important weight effect that the factor at the lowest level has to the height one. Based on the algorithm using composite index method, a standard has been obtained to judge the cause-effect relation. From the research, analyzing tools such as hierarchical and composite index methods can absorb some relevant factors causing ADR, meaning that qualitative description could be converted into quantitative data through proper conversion. Meanwhile, particular factors could be easily inserted into the calculation model and the extent of cause-effect correlation between the damage and drug. The whole judgment process is simply easy to implement at finger tips. This paper will further elaborate on the process to verify the affirmative results.Thirdly, none-coefficient inspection and multi-element regression analysis are based on the theoretical background from the willingness survey. The discovery from such research shows that, regardless of how serious the damage is, the relevant parties tend to select a certain level of damage as the base for compensation. This fact reflects that all the parties involved have same attitude for compensation but with a different base for compensation. It also explicitly explains the different standpoints for each of the relevant party involved. Through a verification process, the government institutions are thought to be set to compensate at a higher threshold base. The drug manufacturers should be set at a lower threshold while drug merchandizing (pharmacies) or applying institutions at the lowest. Thus, more damaged parties would be fit into the scope of compensation. In case of defining the compensation amount, relevant parties usually have lower willingness for compensation for damages less serious than class 5 whereas the curve for such willingness shows a sharp turn when damages are at class 4 or 3, indicating the change of willingness for compensation as well as a clearly increased amount for financial compensation. When damages are more serious than class 3, there is a linier change on the curve between damage level and compensation amount, demonstrating an amount of 300,000 at least in case of death. As for the responsibilities to be held by the parties involved, drug manufacturers and government institutions should hold the major responsibilities. Drug merchandizing (pharmacies) or applying institutions should be less responsible while the damaged parties should not be responsible in any case. As far as the fund source is concerned, there is a need to build up a multi-level or multi-channel model. It is unpractical to let one single party bear all the compensation responsibilities. Through the analysis conducted on government duties, the government should not be out of holding responsibilities and be involved in establishing compensational systems. For example, drug manufacturers hope that government should hold certain ratio of responsibility for damages while the government only agrees to finance certain amount of leading fund for establishing the system. This indicates a differentiation in the standpoint among the parties involved in the case. After applying the multi-element logistic regression model to analyze the factors influencing the compensation at various levels, the influential factors are different with the damages of various classes being regressed. For instance, when damages are of class 7 with"a"equal to 0.05(a=0.05), the influential factors in the model are different; the comparison between the damage classes from 7 to 1 indicates that the number of influential factors in the model is decreasing while the extent of damage gets more serious. This demonstrates manufacturer's willingness for compensation if a compensation system is established.Fourthly, the classification for the extent of ADR damages is the basis for constituting an ADR compensation system. This classification must be defined and is unavoidable. On one hand, it is helpful for building up the whole salvage system. On the other hand, it will serve as a criterion to be referenced during the process of compensation. Furthermore, some statistical methods and models are also applied in the research, with the damages being described in 6 classes. Finally, after a scoring process by experts and statistical calculation, a quantified classification table is initialized for defining ADR classes.Fifthly, how to manage the financing process is also a compulsory question to be considered for establishing the ADR compensation system. During the research, the principle-agent theory is used as the base. In scenario one, the agents'profits either through hard working or duty shirking must be higher than the (opportunity) costs from the analysis, while agents'performance can be supervised by the principle. Otherwise, agents would not accept to perform the task whereas the government has to handle it internally. In scenario two, when the principle can not supervise agents'performance, we suppose"p"as the probability for agent's hard working and"q"for duty shirking behaviors. In case of agent's costs and risks not off setting its gains, once a hard-working agent finds out that the agency is unprofitable, the agent would then loose its motivation for performaning the task. Therefore, whether an agent would accept the deal still depends on the profit. When the agent has only one task to perform, it's decision also depends on its personal gains, while the decision process is more complicated.Lastly, this paper elaborates on the related factors and the theoretical functions for establishing in China a compensation system as well as the relevant policy proposal.The paper's creative point of views is reflected in the following three respects;1. Through mathematical and statistic methods, the judgment methods and standards for the cause and effect of Adverse Drug Reaction are newly constructed , filling the blank area in this regard both at home and abroad.2. Through the quantification standards constructed for defining the damage extent caused by Adverse Drug Reaction, it is expected to divert the former judgment by damage characteristics to quantification judgment.3. With related theories as the base and willingness-to-pay method as means, this paper is focused on studying the compensation classification and the base or maximum amount for compensating the damages caused by Adverse Drug Reaction. The paper also illustrates the responsibility distribution of related parties, channels to raise compensation funds, management of the funds, government roles and etc... With enterprises as the core objects being studied, the paper analyzes the influential factors that affect enterprises'compensation to the damaged parties, thus offsetting the inadequacy where more theoretical analysis but fewer studies have been conducted by the predecessors.On the whole, this paper does not only analyze the various factors that could exist in the suggested system to compensate for Adverse Drug Reaction, but also studies and analyzes each of the factors. The paper proposes new quantification methods and standards to judge the cause-effect relation and initial studying approaches as well as classification for damage classes. It also utilizes willing-to-pay method to analyze compensation levels, minimum or maximum amount for payment, responsibility distribution of related parties, fund raising channels, fund management, and government roles. Based on analyzing the examples in real life, the paper generates some meaningful conclusions. The researches herein represent the significant theoretical value and practical meaning for constituting a compensation system for Adverse Drug Reaction, for promoting healthy development of the social welfare system, and for scientifically stipulating related polycies to regulate and guide social responsibilities held by relevant parties in China.