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Chinese Government Issues Policy to Slim Distribution Chain of Pharmaceuticals

January 23, 2017, Covington Alert

On January 9, 2017, eight Chinese ministries announced a significant new policy that aims to reduce marked-up prices and corruption in multi-tier distribution chains. The policy effectively requires that under most circumstances, at most two invoices may be issued throughout the distribution chain, with one from the manufacturer to a distributor and another from the distributor to the end hospital. The policy applies only to drugs, but some provinces reportedly have been implementing similar policies for medical devices.

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