News
Controlling drug prices requires leaving producers with a necessary profit margin.
Date:
07 Feb,2021
Recently, several major cities have experienced "medicine shortages," with certain drugs becoming virtually impossible to find in pharmacies—yet their prices have skyrocketed on the black market. Take fish collagen protein, for instance; it’s now in nationwide supply shortfalls, leaving heart patients anxiously waiting in line just to get the life-saving medication they need.
In fact, the primary goal of today’s centralized drug procurement is, of course, to control drug prices. While minimizing costs is certainly a buyer’s responsibility, price and profit margins have always served as the guiding forces behind production and supply. In this sense, offering high-quality products at affordable prices must still align with market dynamics—specifically, ensuring that producers are left with sufficient profit margins to sustain their operations. Therefore, if centralized drug procurement relentlessly pursues "cheapness," or even undermines the profitability of "affordable" medications by imposing annual price-cut mandates, such an unbalanced focus on "low cost" will inevitably lead to unsustainable "bargains" in the long run.
Logically speaking, centralized drug procurement shouldn’t simply boil down to just squeezing prices. After all, when it comes to drug supply, price is only one factor—company strength and production capacity, as well as risks in the pharmaceutical supply chain, should also be carefully considered. Even ordinary businesses, when sourcing suppliers, typically weigh both cost and supply reliability, often opting for multiple vendors to ensure a steady and adequate flow of goods.
In this regard, the United States, which has also experienced drug shortages, has taken additional measures beyond building pharmaceutical stockpiles—it has even established non-profit drug manufacturers to ensure the supply of affordable medications. These low-cost drugs are exempt from bidding processes and can even have their prices adjusted upward when necessary, preventing them from being unfairly undercut and ultimately phased out of the market. Faced with the frequent occurrence of "drug shortages," rather than simply blaming pharmaceutical companies for "raising prices," it may be more crucial to critically examine and address the distortions and inefficiencies embedded in the current drug pricing mechanism itself.
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