Healthcare expenditures could be frozen at the current level until 2010 according to a draft document, which leaked out to the press yesterday. The document was drafted by the State Reform Committee which works closely to the government, but the document not necessarily reflects the government’s official opinion.
Our view: We would view the news negatively, if plans were taken over by the government from the State Reform Committee. We see that freeze in the healthcare expenditures could also mean that the drug subsidy budget could remain more or less flat at the same time.
Underplanning the drugs subsidy budget could be dangerous to drugmakers, since according to the current plans the gap of drug subsidy budget over 9% would have to be entirely financed by drugmakers, while the financing of the gap below 9% would be split between the government and drugmakers.