Bashing Big Pharma in China

Like most of his neighbors, Lin Hecai used to worry about medical bills. The 64-year-old retired rice farmer lives in a remote village in Anhui province in southeastern China, one of the country’s poorest regions. Last year the Anhui government launched a program to force pharmaceutical companies to reduce the cost of basic drugs, and Lin says he’s now less concerned about paying for health care. “Even for small ailments, I can afford to see the doctor,” Lin says as he waits in his village clinic to be treated for a cold.

What’s good for Lin and others in Anhui is a growing concern for pharmaceutical companies. Across the country, officials are promoting programs designed to make basic medicines more affordable for consumers—and less profitable for manufacturers. Last year, Anhui introduced a system for hospitals and clinics that encourages competition to force down prices. By putting the focus on cost rather than quality or brand, programs such as Anhui’s have helped force sharp cuts in prices for more than 300 drugs, including treatments for heart disease and diabetes. “I might as well invest in funds or go buy property,” says Tang Changshou, who runs drugmaker Yangcheng Pharmaceutical. “Anything is better than drugs these days.”