HOSPITALS should stop trying to make most of their money from selling medicines, political advisers of Shenzhen said yesterday (Mar 21), blaming high medical costs on rising drug prices.

Some hospitals make 55 percent of their revenues from medicine, Zhu Baoguo, board chairman of Jiankangyuan Pharmaceutical Group, told a political advisers' forum on the city's medical system.

The law allows hospitals to sell medicines at 15 percent above cost. Many hospitals are reluctant to buy cheap drugs with lower profits, said Liu Xiaoyong, board chairman and general manager of Shenye Medicine Development Co. Ltd., a Shenzhen-based medical logistics company.

"Therefore, manufacturers produce new drugs with high prices, although the new drugs and the old ones only differ in packaging, names and prices," said Liu. China's medicine regulator approved 10,009 new drugs in 2004. In contrast, the United States approved only 148 drugs in 2005, he said.

Liu, who has worked in the medical sector for 20 years, said the manufacturing cost of a 100-yuan (US$12) drug could be as low as 15 yuan. Some 55 percent to 65 percent of the costs go to salespeople, who try everything, including bribery, to promote the drugs in hospitals, he said.

"The phenomenon has severely disrupted the market, resulting in rampant bribery and a huge loss of tax money," said Liu, urging the government to regulate the illegal medicine sales market and end hospital bribery.

Shenzhen's medical service fees were set in 1994 and have never been raised. Jiang Hanping, director general of the municipal health bureau, vowed to improve the fee system and increase prices for medical services.

Editor: Wing