Empirical Research On The Effect Of China’s Pharmaceutical Price Regulation Reform

As an important field which is closely related with the national life, the reasonable operation of pharmaceutical market is not only related to people’s health and vital interests, but also will affect the whole social’s harmony, stability and long-term development, since our country was founded, the government had always maintained to attach great importance and pay close attention to the pharmaceutical industry. However, along with the unceasing development of market economy and the deeper going of economic reform, when our pharmaceutical industry has being developed, it also poses a series of serious problems, the pharmaceutical price is rising too fast, the medical expenses is difficult to control, the resident’s pharmaceutical burden and the government’s financial pressure is also unceasingly increasing, the normal order of the entire pharmaceutical market has been seriously disrupted. To deal with these problems, our government has issued a series of regulation policies of pharmaceutical price to regulate the pharmaceutical market, however, as viewing the implementation effects of these present policies, we find that these policies has not achieved its ideal effect of controlling medicine price effectively and reducing medical expenses significantly, the situation of our falsely high pharmaceutical price is still not been completely turned around. Therefore, under the background of poor condition in the regulation of pharmaceutical price in our country at present, this paper try to reconsider the policy effect of our regulation of pharmaceutical price in recent years through a series of theoretical analysis and empirical test, finding out the deep reason which cause the failure of the regulation of pharmaceutical price and then putting forward some corresponding suggestions for these reasons and problems in order to effectively turn around the present situation of our pharmaceutical price mess as cluster and fundamentally improve the future regulation quality of medicine price in our country, thus in the end to provide a realistic way to solve the dilemma of "hard access to medical care" and "buying medicine expensively" for the common people.Our country has experienced roughly three important historical stages about the regulation of pharmaceutical price, from the comprehensive regulation of pharmaceutical price in early days to the relaxing regulation in the reform and open times then to the gradually strengthened regulation measures of pharmaceutical price, the government always transform and adjust the regulation policy of pharmaceutical price according to different political environment and economic background. Based on the systematically reviewing of the background of historical evolution about the pharmaceutical price regulation since our country’s founding, this paper discussed the advantages and shortcomings of pharmaceutical price regulation during various periods, after that, through case studies as well as based on inter-provincial panel data building fixed effects model, we try to make a objective assessment of the effect of China’s pharmaceutical price regulation from a qualitative and quantitative point of view. As the research shows,under the regulatory reform which is oriented to strengthen pharmaceutical price regulation, China’s pharmaceutical price index showed a downward trend, however, per capita drug costs and the overall pharmaceutical expenditures still shows a rapid rise in the trend, abnormal "funnel-shaped" medicine price chain has not been changed, kickbacks,"red envelope" business bribery which leads to artificially high medicine price is repeated, centralist tender for medicine purchase as well as newly implemented pharmacy differential ratio rule has not played its role in controlling medicine prices effectively. All in all, China’s current pharmaceutical price regulation as a whole is a relative failure. Through theoretical research and practical analysis, this paper further excavated the underlying causes of pharmaceutical price regulatory failure. Basically speaking, deeply rooted "raises the medicine by the medicine" system in our country’s medicine field is the main reason of pharmaceutical price regulatory failure, prevalent "collusion between pharmaceutical enterprise and hospital" phenomenon is the direct cause of pushing pharmaceutical prices "artificially high", serious information asymmetry, the absence of relevant regulatory department functions further hinders the effect of the pharmaceutical price regulation policy. Based on the empirical assessment of pharmaceutical price regulation effect as well as deep analysis of the reason of regulation failure, from the perspective of industrial organization theory, combined with foreign advanced pharmaceutical price regulation experience, this paper putted forward a series of policy recommendations for our future pharmaceutical price regulation reform:in order to control pharmaceutical price at a reasonable level, regulatory agency must fundamentally reform our current medical compensation mechanism, eradicate the "collusion between pharmaceutical enterprise and hospital" phenomenon, implement "separation pharmacy from medicine" system. Only in this way, can pharmaceutical price regulatory policy play its due role, realize its effect of "treating both principal and secondary aspect of disease", and reverse the situation of China’s "artificially high" pharmaceutical prices at present.Making a general survey of the current theoretical research about the pharmaceutical regulation in our country, scholars have mostly put their concerns about study into the present situation’s discussion and the reason analysis of our pharmaceutical price regulation, however, the systemically research about the effect of pharmaceutical price regulation is still not deeply and fully, the research methods is more focus on the qualitative description, and there are only a few quantitative research which is at the point of view about regulation economics to study the effect of pharmaceutical price regulation. Based on researching systemically about the courses of our pharmaceutical price regulation, through consulting a series of material reports and statistical data about the regulation of our pharmaceutical price regulation in recent years, the paper is to do some empirical research and discussion about the effect of our pharmaceutical price regulation from two angles of case analysis and model building, especially the building of fixed effects model which is in the analysis of the effect of our pharmaceutical price regulation, can provide a more novel and unique thinking perspective to the empirical studies of our pharmaceutical price regulation field in the future.