China’s National Development and Reform Commission has reportedly announced that from June 1 it will remove pricing controls governing the majority of medicines to give the market more power in reigning in surging healthcare costs.

The Agency said in a statement it would “cancel government-set prices on most drugs to improve purchasing mechanisms for drugs, control costs for medical insurance and allow the trade price of medicines to be set by market competition”.

The move, which concerns all medicines except anaesthetics and certain antipsychotics, follows the removal of price controls on some drugs in the country last year to improve affordability and availability. 

But according to Reuters, industry observers believe its impact will be rather muted given that the majority of medicines in China are actually sold through hospitals rather than retail channels, “where a separate tender process helps keep prices down”.

The Chinese government, however, also planning reform of the country’s the national drug distribution system, “in order to reduce drug prices and reduce corruption,” notes China Drug Consulting.