Taxes cause high prices of import drugs

Tax, additional pricing by hospitals and bloated circulation fees were cited Sunday by Guo Jianying, a senior pricing official of the National Development and Reform Commission, as the cause of high-end imported medicine being sold at higher prices on the mainland than in Hong Kong.

The explanation came amid public debate over Hong Kong's lower prices than the mainland for high-end imported pharmaceuticals, which reportedly have lured many buyers.

Guo said among over 300 foreign-origin medicines supervised by mainland authorities, around 80 percent are sold at prices higher than in South Korea, Hong Kong and Taiwan, while some 70 percent are cheaper than in Europe, the US and Japan.

Guo added that in Hong Kong, imported medicine will not have a tariff of 5 percent on the manufacturer's price, or a value-added tax of 17 percent, or a further 15-percent additional cost added on the manufacturer's price by hospitals.

Circulation fees for imported drugs sold in Hong Kong will not be as much as 20 percent of the manufacturer's price as on the mainland.

Guo said on the mainland, drug pricing regulation has placed a cap on retail prices of essential drugs that are included in the health insurance scheme and those that have a monopoly over the market.