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A special team has been created to find a "cure" for "the disease" plaguing the nation's healthcare system: exorbitant costs.

The team will consist of representatives from 11 departments including the Ministry of Health, the National Development and Reform Commission (NDRC), and the State Food and Drug Administration (SFDA).

Their main task will be to coordinate efforts to cut costs, with a particular focus on drug prices.

At the moment, many of these 11 departments already play a role in regulating the healthcare sector, but due to poor coordination, many problems are not being solved.

Experts cite high drug costs, profit-oriented hospitals and the widespread lack of insurance cover as the chief concerns in the sector.

"Medical reform cannot be done by the Ministry of Health alone," Wang Dongsheng, deputy director of the Social Development Department of NDRC, told journalists at a health industry forum in Shanghai, which opened on Sunday.

Medical insurance is currently managed by the Ministry of Labor and Social Security. The NDRC is in charge of approving drug factory establishment and drug prices, while the SFDA is authorized to approve new drugs.

"Better coordination between these departments is vital," Wang said.

An example used at the forum to illustrate the coordination challenge was drug pricing.

The NDRC over the past couple of years has announced frequent drug price cuts.

However, once prices are lowered, many factories stop producing that drug altogether. They will then register the same drug by a new name with the SFDA, thereby circumventing the price cut.

China has about 6,000 approved drug manufacturers, and at least 10,000 drug marketing companies. 80 percent of drugs are sold in hospitals, so cases of bribery of doctors are frequent.

If the cost of a medicine is US$10, the factory takes US$3, the marketing company US$2 and the hospital US$5, said an NDRC official at the forum.

Meanwhile, 40 percent of China's 500 million urban residents and 80 percent of 800 million rural residents have no medical insurance. This makes many of them hesitant to see doctors even if they are seriously ill, according to a national survey in 2003.

The survey found that because of high drug prices and the lack of medical insurance, about half of patients in China who need treatment do not seek it.

(China Daily September 19, 2006)