ABSTRACT
This chapter endeavors to examine how the drugs markets emerged and what were the state’s role in the growth and change of drug markets during the economic reform. The study analyzes the development and building of the mechanisms of regulatory control in the rise of drug markets, focusing on some main policy episodes relevant to success and failure in enforcing price control, for drugs in the providing units. The study tackles challenges in controlling drug prices in the three-way collaboration among three actors, namely, public hospitals, the drug industry. and medical personnel, coupled with the local government’s support for the drug industry for revenue consideration. As demonstrated in several selected policy episodes, the chapter tries to account for how price controllers faced the dilemma between the policy of safety, quality and effectiveness of drugs on the one hand and the maintenance of affordable prescription drugs on the other hand.
