Research On Our Country's Forming Mechanism Of Drug Price

Drug is essential for people to prevent and cure diseases. The formation and management of its market price have some particularities. Drug has government price and market price in China. Government sets price according to the social cost in principle, and then adds proportional profit to make price in circulating process in succession. Drug's price is disordered, and it is difficult to supervise and control drug price. Now, China's two administrative means (order of decreasing drug price and system of collective bidding buying) of managing drug price are of low effect. Since 1997, related departments of government imposed more than 20 orders of decreasing drug price successively and paid out great efforts, the price kept rising but not decreasing, which shows that there are some defects in our current system of price managing pattern. Therefore, it is an important question for discussion to look for effective mechanism of controlling drug price. And also, it becomes more and more urgent with the deepening of reform of medical care system.This paper put its researching object on the forming mechanism of drug price, and applies economic theories of market structure, market performance and government regulation to discuss systematically our forming mechanism of drug price, after analyzing the particularity of drug market. At first, the paper starts with the particularity of drug and drug market, then analyzes the current status of our system of drug price and its existing defects, and concludes that lack of elasticity of drug price, asymmetry of market information and the disequilibrium of market competition caused by medical care system are the main causes to the high drug price. Then, the paper analyzes developed countries' related systems of drug price and sums up experience for reference from aspects of government's price-making, market price and market circulation of drug so on. Furthermore, the paper analyzes the factors of impacting our drug pricing mechanism, and makes concentrative analysis on the questions of low concentration degree and indistinctive products difference, which exist in our drug market structure. Meanwhile, the paper analyzes the relationship among doctor, patient and drug manufacture and their interests and behavior orientation under current forming mechanism of drug, next, points out that our drug market performance needs to improve. Through seeking theoretical foundation for government regulation to drug price and reviewing the course of our government's drug market management, we think the main reason for high drug price and malfunction of government regulation is interest groups' pullback and evading from management. Finally, the paper further discusses the reform orientation of our drug pricing mechanism on the basis of above-mentioned analysis, and puts forward some specific policy suggestions with patience to perfect the forming mechanism of our drug price from three aspects of government regulation, market structure and experience reference, hoping it is helpful to resolve the question.