This post was written by Hugh T. Scogin, Gordon B. Schatz, Amanda Tao and Amanda Yang .

The Chinese government officially launched the National Essential Drug System (NEDS) Aug. 18, 2009 at a press conference held by the State Council, during which it explained the concentration of specific drug purchases in urban and county grass-roots health institutions as the first step in the implementation of NEDS. By 2009, NEDS will be implemented in 30 percent of government-run urban and county health care institutions in each province, region, or municipality. NEDS could have significant implications for the marketing, sale, distribution, and pricing of drugs by multinational and Chinese pharmaceutical companies in China.

As part of the implementation of NEDS, nine government ministries, including the Ministry of Health (MOH), National Development and Reform Commission (NDRC), Ministry of Industry and Information Technology (MIIT), Ministry of Supervision (MOS), Ministry of Finance (MOF), Ministry of Human Resources and Social Security (MOHRSS), Ministry of Commerce (MOFCOM), State Food and Drug Administration (SFDA), and State Administration of Traditional Chinese Medicine (SATCM), jointly issued the “Implementing Opinions on Establishing the National Essential Drug System,” the “Administrative Measures on National Essential Drug List (Interim),” and the “National Essential Drug List – Section for Primary Medical and Public Health Institutions Use (2009 Version).”

NEDS is intended to more effectively manage the selection, production, distribution, usage, pricing, reimbursement, supervision, and evaluation of essential drugs, as well as to improve public health, medical services, and medical security. The new regulations note that all government-run grass-roots health care institutions are required to purchase and use essential drugs, while other types of health care institutions are required to use essential drugs based on standardized percentages for minimum use.

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