Price Regulation In The Pharmaceutical Industry:Motivation,Mechanism And Effect

There is a serious phenomenon that "difficult to see a doctor,expensive to see a doctor" that is still hard to solve in China for many years.Looking back on China's medical reform process,it can be found that the focus of reform is on the two aspects of over-medical and drug prices.Among them,the regulation of drug prices and its reforms have been actively explored since the founding of China.But it was not until 2000 that a relatively systematic regulatory system was formed.In 2017,China launched an important regulatory policy that was considered by the public opinion to be the most stringent in history,namely the "two-vote system" regulation.The "two-vote system" means that the drug is sold from the manufacturer to the first-level dealer for a VAT invoice,and the dealer sells the drug to the medical institution for another VAT invoice.The two-vote system means that the common ticket is replaced by "two votes",and the first-level dealers of each variety must not exceed two.The purchase and sale regulations of current drug emphasize "tickets and peers" and "(drugs,invoices,funds)three-in-one ",so the "two-vote" policy is not only a regulation on purchase and sales invoices,but also a restriction on the circulation of drugs.The core of its regulation is to regulate the problem of the high price of drugs caused by the increase in the circulation of drugs.The purpose is to standardize the order of purchase and sale of drugs,so as to achieve the "original intention" of the policy of "compressing circulation links,reducing intermediate costs,lowering drug prices,and benefiting the people."The implementation of the "two-vote system" has had a huge impact on the pharmaceutical industry,especially the pharmaceutical production and distribution companies.According to the results of the implementation in the past two years,the "two-vote system" can indeed eliminate the phenomenon of the original drug rebate.The "two-vote system" actually has achieved the goal of reducing circulation through administrative means.However,the price of medicines that are several times higher or even dozens of times are not reduced by the reduction of circulation.Therefore,the market and public opinion have different voices.Medicine is a special commodity,which has the characteristics of low price elasticity,asymmetric information,and high barriers to the industry.Can the implementation of the "two-vote" drug price regulation have the expected effect? What impact will it have on drug prices,drug structure and the development of the pharmaceutical industry? Therefore,the motivation,mechanism and effect of the "two-vote" regulation are researched in this paper.Firstly,the practical experience of China's drug price regulation since the founeding of the People's Republic of China is analyzed,as well as the motivation of the "two-vote" price regulation based on the current situation of the drug price and drug market.In addition,with the analysis of theoretical model,the equilibrium behavior of pharmaceutical manufacturers and drug circulation enterprises is researched.On the one hand,the event analysis method is used to research the change in the stock return rate of the sample company due to the "two-vote" regulation policy.On the other hand,the multiple linear regression model is applied to analyze reflect the degree of implementation of the "two-vote" regulation by the operating profits.The double-differential model is applied to determine the relationship between the "two-vote" regulation and the drug retail price index.Finally,in order to further reduce the economic burden of patients and promote the development of pharmaceutical industry,corresponding suggestions are provided for the development of pharmaceutical industry and drug price regulation based on the research of the "two-vote" regulation.