| Pharmaceutical Price is the research focus for almost forty years in academic field. Not only higher price will reduce the accessibility of pharmaceuticals for the poor people, increase the burden of country and society, but also lower price will cumber the pharmaceutical industry’s new drug investment and reduce the number of new drugs in the future. The goal of access of pharmaceuticals (lower price) and the goal of encouraging investment for new drugs (higher price) are conflict. From the view of the world, how to decide the reasonable pharmaceutical price is the key of how drugs can continue and better serve for the mankind. Currently, Chinese health care reform has been into the most important period. "Kan bing gui" and "Yao jia xu gao" have been key issues to influence the health service access and utilization. Because pharmaceutical expenditures contribute for above 50% of health care expenditures, obviously higher than other countries, "Kan bing gui" in nature is the drug expenditure issues. Therefore, how to form reasonable pharmaceutical price and how to reduce pharmaceutical expenditures are the key issues in the Chinese health care reform. This dissertation will do an exploring research for pharmaceutical pricing.First of all, combining the inherence characteristics of pharmaceutical market, this research discussed how the price theory gets into action in theory. The paper analyzes welfare change of direct control of pharmaceutical price (price ceiling and price floor). The result shows that, monopoly and moral hazard are inverse market strength. Because the complexity of multi-strength and several competition form in the pharmaceutical market, the uniform price control in any country will produce welfare loss.Secondly, the research analyzed the current situation of Chinese pharmaceutical pricing objectively. These include evolution of Chinese pharmaceutical policies, current competition of pharmaceutical industry, circulating process of pharmaceuticals and main pharmaceutical policies’ results. These analyses show that, monopoly situation of hospital in the terminal distribution of pharmaceuticals and the policies of "Yi yao yang yi" and "Shun jia zuo jia" distort the pharmaceutical pricing mechanism. Under the driver of benefit between wholesale price and hospital retail price, the supply and demand of pharmaceuticals are not sensitive to the price, but correlate with the price difference of wholesale price and hospital retail price. Pharmaceutical cutting policy and centralized bidding policy can reduce the retail price largely, but as for the structure and quantity change of the pharmaceuticals used by the doctors, reduce of pharmaceutical expenditures are limited.Thirdly, the research analyzes the international pharmaceutical pricing theory and influence factors in order for the reference for China. International pharmaceutical companies usually set the price ceiling from the perspective of the market and set the price floor from the perspective of company (cover the cost and the investor benefits), they set the price during these two limits. From the view of the world, the increasing rate of the pharmaceutical price is lower than any other health service price. Pharmaceutical expenditures have the lowest percentage in the health care expenditures and the percentage is still deceasing. International pharmaceutical market is the typical oligopoly market and the price is determined by supply factors and demand factors together. The evidence shows that demand factors (product characteristics) are more important. There are also heavy competition between brand drugs and generic drugs. At last of this part, I reviewed the pharmaceutical price control policy around the world. In general, generic reference pricing is consistent with the insurance principle of equity and efficiency and bring lower health risk for patients. But the therapeutic reference pricing has more negative influence. Pharmaceutical parallel trade does not gain the efficiency from the usual trade, because the lower price is gained by the strict regulation, not the higher produce rate.The final part of the dissertation is the empirical part. The research on price index shows that from 2002 to 2005 the price level of antibiotic decreased and the price level of circulation increased. There are big differences during the difference categories. The research on quantity index shows that during these four years the drug quantity increased abnormality. The quantity of antibiotic increased 4 times and circulation drug increased 9 times in Beijng. There are positive correlation between price and quantity in China, which is different with the international market (negative correlation). The possible reasons for this phenomenon are that hospital is a monopoly in drug terminal retail and 90 percent hospitals in China are owed by the government, competition is limited. In addition, the policy of "Yi yao yang yi" and "Shun jia zuo jia" result in the induced demand for the higher pricing drug. The multi-level regression of the price difference determination for three regions showed that drug quality and competition influence the drug differences significantly. These characteristics include strength, package, convenience and generic competition.In order to solve the realistic issues in China and promote the drug service for the human health, under the above theoretical and empirical analysis, this paper bring forward the integrate policy frame for Chinese pharmaceutical pricing mechanism. Integrate policy frame include appropriate government function, scientifically setting the drug price, pushing the market process of hospital, strictly carving up the professional work of physicians and pharmacists, improving to establish and implement of clinical guideline, putting in practice of generic prescription system and establishing the third party purchasing mechanism in health insurance. |
