Pharmaceutical supply chain in China: Current issues and implications for health system reform

Objective: This article discusses the performance and distortions of pharmaceutical market in China and provides some reflections and policy implications for currently implemented reform. Methods: This study is based on literature review and publicly available data by searching electronic databases and official web pages of the Chinese government on the internet. Results: China's economic transition and the incremental and piecemeal nature of health care reform have created a pharmaceutical market with a number of deficiencies, including ineffective supervision, mark-up price pattern, distortion of the price schedule, and lack of authoritative drug formulary. Conclusions: We conclude that the root cause of the market and government failures is that higher-than-cost drugs preferred by all suppliers. New drug pricing mechanism is the key to the current pharmaceutical reform and should be implemented in coordination with other health system reforms.