| Objectives"Everyone has access to basic medical and health services" is the basis of harmonious society. "Costly access to health care services" is a major focus in China. The key cause is considered to be the over high-priced drug mainly caused by chaos in the medicine market. Therefore, whether government can solve the "costly access to health care services" is closely related to the effects of the prospective pharmaceutical market reform. The urgent mission now is to seek out available and feasible policy or policies by dissecting what causes a disorder pharmaceutical market and why.However, current policy makers or researchers who majoring in drug market development, merely revolve around one or a few issues in pharmaceutical field, rather than over systematic or comprehensive analysis. More importantly, they ignore pharmaceutical stakeholders, the holders'interest preferences and relationship between these holders. Thus, current policies and researches achieve few results.Therefore, this research aims to focus on stakeholders and their mutual rebuke in current pharmaceutical market, figure out the disorders in pharmaceutical market and why such a disorder market coming into being, provide scientific evidence and suggestion for further health care system reform. Methods and theories in our research include integrated policy-making procedures, health macroscopic models, market analysis theory and stakeholder analysis.Materials and MethodsScientific Policy-making procedures, one way of feasibility demonstration, were selected in this study.By buyer power principle, the pivotal cause of chaos in Chinese medicine market is medical agencies. By the theory of stakeholder, we state stakeholders'interest preference and problems in pharmaceutical field and find out the reason and mechanism of disorder in drug market. By multiple qualitative and quantitative methods, we investigate the issues in market and evaluate the effect of key strategies on pharmaceutical market.Several data-collection methods, such as literature's review, resident opinion survey, the second-handed data collection, are applied in this study. Meanwhile, the cluster stratification sampling method is also used to collect people's (including residents in Shandong, Changzhou in Jiangsu, Jiading in Shanghai.) opinions on current drug prices.Main results1. Definition of pharmaceutical field and it's stakeholders(1) Pharmaceutical field:according to the process of pharmaceutical research and the development to production, we dissect the pharmaceutical field as pharmaceutical research and development agencies(R&D), pharmaceutical manufacturers, pharmaceutical wholesale sectors, drug bidding companies, hospitals, patients, and food and drug administration departments.(2)Collection of stakeholders in pharmaceutical field: the literatures induction and analysis, focus group discussion, multi-dimensional subdivision were applied in this article. Stakeholders in pharmaceutical field include government departments, health departments, the price department, health care sectors, food and drug administration departments, hospital, pharmaceutical suppliers, and patients.2. Problems in pharmaceutical field through literature induction and analysisWe collect 290 literatures openly published in 5 years from 2004 to 2008 within Chinese pharmaceutical field. Through literature induction and analysis, we finally extract 26 major problems in pharmaceutical field.Pharmaceutical R & DProblem 1:Low and backwardly medical species have been repeatedly done in pharmaceutical R & DProblem 2:Seriously scarcity of specific and/or new medicine research in pharmaceutical R & D in state-founded plants, for lack of state policy support.Problem 3:Both a small number of child-specific drugs and seldom-used drugs can not meet the clinical needsPharmaceutical productionProblem 4:Such drug plant with informal GMP (do not have the technical, financial, or human resources required for the application of such standards), major products been produced by thousands of other plants, has been constructed repeatedly and been less strict when the product being manufactured is destined for sale.Problem 5:Operation process of pharmaceutical manufacturing is not standardized, the document of producing is not complete and drugs description is informal.Problem 6:Recent years have seen an increase in the prevalence of fake and substandard drugs on the market. Pharmaceutical salesProblem 7:Improper promotions, various kickbacks, flagrant bribery are prevalent in drug sales, especially new and/or special drugsProblem 8:There are many inferior and fake medicines in pharmaceutical distributionProblem 9:There are many illegal drugs and fake drugs advertisementProblem 10:The GSP(Good Supply Practice) in retail drug stores are not properly fulfilledProblem 11:Drugs are too expensive in retail compared with in wholesaleProblem 12:Many medical agencies are bumbling in the drug biddingPharmaceutical use (in hospital)Problem 13:Less pharmaceutical technicians work in primary healthcare agencies, the risks of adverse reactions and dangerousness of medical treatment of patients are much higher than normal.Problem 14:Outdated medical equipments and poor drug storage conditionsProblem 15:Lacking specific drugs for specific diseases and low-priced yet useful drugsProblem 16:Governmental investment in health is insufficient, made the drug income as the main revenue of the medical institutions, such phenomenon that medical institution maintained by drug has never transformedPharmaceutical use (by patients)Problem 17:Due to lacking of medical knowledge, patients can not properly use of drugs independentlyProblem 18:Most people can not afford too expensive drugs.Pharmaceutical administrationsProblem 19:The inferior FDAs'poor cooperation with each other in the process of drug price controlling and drug bidding in local and regional areas.Problem 20:Government fails to control drug pricesProblem 21:Drug quality management system has not yet overwhelmed in the whole country, particularly in rural areasProblem 22:Government does not effectively and efficiently monitor pharmaceutical distribution fieldProblem 23:The drug bidding system as a whole is still immatureProblem 24:Many drug-related laws and regulations are still far away from perfectionProblem 25:Many problems such as technical issues in adverse drug reaction monitoring and management, so it is difficult to reach consensus with the identificationsProblem 26:Unsound essential drugs system make shortage of essential drugs supply often happening3. Analyze the origin and mechanism of pharmaceutical market confusion by discussing the relationship between pharmaceutical stakeholders'interest preference and the existing problem of expensive medical charges(1)Analyze pharmaceutical stakeholders'mutual rebukeIn pharmaceutical field, society mainly criticize of "Scarcity of essential drugs supply, imperfection of essential drugs system". Price-control agency criticize of "Drug prices too high". SFDA criticize of "the inferior FDAs weak cooperation with each other", "drug firms with backward facilities, low cultured workers and technicians, having been constructed repeatedly and easily coming into market, major products been produced by thousands of other plants", "less pharmaceutical technicians working in primary healthcare agencies, the risks of adverse reactions and dangerousness of medical treatment of patients are much higher than normal". Drug suppliers complain "serious insufficient R&D for new drugs research in state-founded plants, for lack of state policy support", "many drug-related laws and regulations are still far away from perfection", etc. Medical institutions think "governmental financing insufficiency "made the drug sale as the main income of many medical institutions, the phenomenon that medical institution maintained by drug has never transformed till now, and so on.(2) Discuss the relationship of pharmaceutical stakeholders'interest preferences and the existing problem of expensive medical chargesPatients pay more attention to the essential drug with lower price and higher quality, the new medicine and patent drug with feasible price to reduce unnecessary drug resources waste through doctors drug-taking behavior standardization.So public think the drug regulatory authorities lack supervision in the process of drug price control, "drug prices too high" and "improper promotions, kickbacks, bribery are prevalent in drug sales at medical agencies, especially new drugs and medicines in particular", so patients have to pay more. According to the residents healthy condition survey we have done in 2008, the majority believe that the reason of expensive medical charges is basically highly-cost medicine (the results:in Jiading: 80.43% vs. in Changzhou: 75.81% vs. in Shandong: 80.77%).With the current segmentation of trap and block management mode, the government might concern of maintaining the coordination and balance of various pharmaceutical relationship, as the government maximize their own gains. Health administrative departments focus on keeping stability of internal medical environment, and then improve medical service on permissible condition. Now, the departments blame the expensive medicine and emphasis these "scarcity of essential drugs supply" and "too highly-costly medicine" have increased patients" economical burden, tensed relationship between patients and doctors. Price-controlled departments take on how to establish and perfect the price controlling system, price monitoring and regulation. FDAs concern of strengthening their resource allocation and the jurisdiction, so as to fulfill their responsibility of ordering and supervision for the drug market. They exclaim against "drug regulatory authorities inter-independently work without cooperation with each other", "less pharmaceutical technicians working in primary healthcare agencies", so efficient and effective implementation of responsibility and supervision on the quality of drugs cannot be applied, which lead to "many low quality and fake medicines in pharmaceutical distribution" and "the risks of adverse reactions and dangerousness of medical treatment for patients are much higher than normal".Drug suppliers also pay close attention to maxim profit and improve competition. So they insist the states lack general planning medical production and sale, "with backward facilities, drug plants have been constructed repeatedly and easily approved to come into market", "Many plants produce many kinds of drugs rather than mainly concentrating on some specific drugs", "One popular clinically used drug may be produced by thousands of companies", Insufficiency of governmental financing support, scarcity of new/specific medicine research force many medicine plants to sharply reduce basic costs in new drug research. In general, medical resources and time have been greatly and repeatedly wasted on such work, therefore lower international competitiveness has been gradually forming.Under normal operation, medical agencies mind reasonable compensation from government. They think the government should be in charge of the common concerned fact of" costly access to health care services ". When the government's policies have changed these years, medical agencies are primarily and increasingly concentrating the reimbursement on costs of new high-tech examinations and sale drug income, which directly and indirectly leads to medical institutions rely on drugs.(3)Analyze the cause of drug market disorganizationIn our country, medicine market is a typical buying one. And medical institutions are responsible for more than 80% drug buying and sale. So medical institutions have absolute power in drug retailing and buying in Chinese drug market. Under such condition, drug suppliers have to design and supply drugs corresponding with the needs of medical agencies. Patients as consumers, consuming drugs at hospital, have to buy some certain sorts and forms of drug (that is of course high cost drugs) directed by doctors in agencies. So hospitals'demand preferences directly define the production formation and construction of market. Consequently, a series of distorted problems are coming. In this sense, medical agencies initiate and develop drug market disruption.For insufficient investment from the government, medical institutions rely more on drugs and service charges to compensate which previously governmental invest but none now for further development. Worse one, limited by the control of medical service cost policy, they can not get enough compensation from the revenues of basic health care, except the 15% drug price difference(the percentage of the differential value of cost got from the pharmaceutical plants and brought by patients to the cost got from the pharmaceutical plants) and other items help increase income, such as higher-cost drugs, big prescription, unnecessary medical tests. At this point, drug suppliers and medical agencies are convergence of interest. As government continuously release drug price regulations, the pharmaceutical plants immediately change the form of down-priced drug and resale the new-formed drug yet the same drug in quality to hospital with higher price to minimize the economic profit loss result from the declining prices, which is also according with the tendency of medical agency. Furthermore, tacit understanding between medical agencies and pharmaceutical companies help irritate the drug market more disorder: more expensive drug, more unbalanced structure, lower and more repeated drugs on sale.(4)Tactics to resolve chaos of the pharmaceutical marketAccording to the reasons and factors leading to the disordered drug market mentioned above, we conclude three ways that might usefully help solve these problems deeply rooted in Chinese pharmaceutical field:to increase financial investment from government, to change the traditional payment and to rationalize fee.Former research show that, to change the drug market chaos, it is important to cut off the vicious cycle loop of compensation mechanism, block off economic interests associated between healthcare institutions and the drug's price. Furthermore, we believe the operational police of solving the problems is "total budget and payment for service unit." Such policy urges the medical institutions to reduce unnecessary items, to turn to effective yet cheap drugs, to "actively obey budget". By this way, not only economic association between hospital revenue and medicine price can be cut off but also hospital can also earn more from more available patients'payment. Finally normal order of the pharmaceutical market can be slowly and gradually restored.(5) Demonstration of the effect of payment reform in pharmaceutical marketIf drug would be sold at a normal rather than in a too expensive price, if unreasonably highly-cost prescribed drug could be replaced by cheaper but not inferior alternatives in 2006, we have calculated the net income of medical drugs would increase 146.55 billion RMB in medical agencies at least, which is about 2.5 times of their previously revenue. Even 30% of low-cost drug can replace higher one, drug income in medical agencies as a whole could reach 77.25 billion RMB or so, the increased earning was more than 43.49 billion RMB. We assume the payment reform would provoke more than 170% of the drug revenue per year for Chinese medical institutions.If the medical institutions could follow above suggestion, pharmaceutical companies are expected to reduce losses at least 109.7 to 171.0 billion RMB. In turn, bankruptcy rate will down to 69 to 74%(involving about between 3230 to 3464 drug manufacturers,62 to 67 million workers). At least 53.6 to 129.4 billion gross losses can be saved in medicine circulation, the bankruptcy rate of the pharmaceutical distribution companies will drop to 41 to 44% (involving about 13292 staff in drug distribution enterprises). In all, the payment reform will help consolidate medical resources, promote pharmaceutical production, enhance core competitiveness and improve d management in both production and distribution enterprises.Therefore, if the combination of the two-"total budget" and "payment for service unit" could carry out in China, the GDP in medical filed will be largely and greatly increased. Meanwhile, the upstream medicine business will also be promoted.2. Research Innovations(1) Methods InnovationsThe stakeholder theory and the forces of the buyer theory are used to analyze the causes and mechanism of Chinese drug market chaos.We define calculation ideas, steps and formulas to measure the effects of "total budget" and "payment for service unit" on medical revenue, pharmaceutical production, and distribution and use national health accounts to estimate effects of payment reform in drug field.(2) Results innovationsUsing the theory of stakeholders and analyzing the problems in Chinese pharmaceutical market, the interests of all stakeholders, relationship between stakeholders, we conclude specific cause and mechanism of our disordered drug market, thus providing a new way for future health policy research.Analyzing the characteristics of medical institutions purchasing drugs to disintegrate the problems in market, we provide strong evidence for resolving the cause and mechanism in drug market.Dissecting medical institution's domination on medical market and product structure by the buyer power theory, we find out medical institutions should be responsible for pharmaceutical market disorder. Through our investigation, our research gives a hint for further studies.Using quantitative methods to proof the effect of "total budget and payment for service unit" on medical revenues, medical practices, revenues of pharmaceutical production and distribution, and quantitatively clarifying social turmoil caused by unmoral payment. Our study provides a scientific view for the policy implementation and improvement.
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