200 western drugs appear on China’s first-ever list of essential medicines, which totals 307 mainly prescription products and will become available at heavily-subsidised prices in stages starting from September 25.

The essential drugs list is a central plank of the country’s $124 billion programme of health service reform, which aims to provide affordable health cover for more than 90% for its 1.3 billion population by next year, and the medicines which have been selected for price controls are used in treating up to 80% of China’s most common diseases, according to the government.

Price-controlled medicines will initially be sold through 30% of the community medical facilities in China’s cities and townships, and by 2020 they will be first-choice medicines at all state-run health institutions throughout the country. The government will regulate the cost and distribution of all drugs on the list and they will be purchased by the provincial governments through procurement auctions. Three times a year, the central government will publish guideline prices to ensure the drugs remain affordable, and the list will be updated every three years based on changes in demand, according to a joint statement issued by the National Development and Reform Commission and the Ministry of Health.

It will not only be more convenient but also cheaper for patients to obtain their medicines locally rather than having to attend central hospitals; as well as experiencing lengthy delays at the big public hospitals, they often pay more for drugs because hospitals are frequently reliant on profits from the sales of drugs. As a result, there is over-aggressive and unnecessary prescribing within the hospital sector, but local experts warn that this problem may not be solved by the new pricing controls, as doctors may well find other ways to compensate for their lost earnings.

China’s annual drugs bill currently stands at around $73 billion, or more than 45% of total health care expenditures, compared to an international average of around 20%-30%. The 307 drugs on the essential list account for approximately 25% of national drug spending and include antibiotics, pain relievers, cough/cold medicines, and treatments for anxiety, high blood pressure and other common conditions.

Research firm IMS Health believes that China’s huge health reform programme will drive the 22% annual growth which it is forecasting for the national pharmaceutical market over the next five years. Annual sales will grow from $24.5 billion currently to as much as $78 billion by 2013, when China will move up to become the world’s third leading drugs market, behind the USA and Japan, from its current fifth position in the world league table, the firm projects.