China has set its sights on creating a holy grail healthcare system. Pressured by its growing middle class, the Chinese government has set itself an ambitious target: first-world health outcomes at a fraction of the cost that other countries, especially the U.S., pays.
In order to achieve this goal, China has doubled its public hospitals’ funds in the last five years to $38 billion and has revamped its drug approval system. It has also been approving some foreign drugs and medical trials quicker than the U.S. The country wants the best drugs and care without paying a hefty amount that would stress the country’s medical insurance fund.
To pay for these drugs without busting the national budget, China wants global pharmaceutical companies to drop prices drastically in exchange for access to China’s vast patient pool. This means Chinese patients are spending a fraction of what American patients pay for the same drugs. For generic drugs, prices have dropped an average of 52% so far through a government bulk-buying program.
These price drops do not come without their challenges. China’s patient population is bigger than it has any other country has faced in the past. It will be interesting to see how China balances cutting the cost of healthcare with the massive amount of patients in need.