A New Analysis Of The Hiking Up Of Medicine Prices In China Based On The Bundling Theory

In China, the hiking up of medicine prices has been defined as a serious social problem, the government has adopted a great of measures such as decreasing medicine prices,however,these measures did not achieve the desired results.this paper attempts to analysize it using the bundling theory of the industrial organization theory. This paper concludes that the hiking up of medicine prices results from medical services market, the character of non-perfect competition of our medical services market has made public medical institutions achieve great monopoly power; they bundle medical services with medicine through extending their monopoly power with price regulation, so the prices of medicine hike up. The paper has analyzed the conditions, the market environment,ways and effects of the bundling. We should continue the market orientation of the medical reform to break the monopoly of the public medical institutions, compel them to abandon the bundling through strengthening the competition;then we should reform the price formation mechanism of medical services in order to reflect the value of technology and service thoroughly;at last we must adopt effective measures to repress the information asymmetry between the doctors and the patients through scientific system designs, thus we can preserve the vital interest of the patients.