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Hospitals conning state: legislator

"The pharmaceutical companies would not make the price differences public because they don't want to lose their customers."

Sisy Chen, independent lawmaker

An independent lawmaker yesterday charged that the prices for prescription drugs that many hospitals charge the Bureau of Na-tional Health Insurance (BNHI) are much higher than the prices at which the hospitals buy them from pharmaceutical companies.

Independent Legislator Sisy Chen (陳文茜) publicized a report to show the difference between the prices that hospitals report to the BNHI and the prices the hospitals pay pharmaceutical companies for the same drugs.

For example, according to the report Chang Gung Memorial Hospital bought a drug named Sinzac at the price of NT$2.40 per pill but reported to the BNHI it bought Sinzac at NT$41.50 per pill.

"The money that hospitals get through this scheme amounts to NT$20 billion per year," Chen alleged.

"The pharmaceutical companies would not make the price differences public because they don't want to lose their customers," Chen continued.

Chen demanded that the Department of Health must publicize the original prices at which pharmaceutical companies sell drugs to hospitals.

Individual hospitals decide the prices of specific drugs after taking existing market prices into account and after negotiations with the BNHI.

"The original drug prices should be exhibited on the Department of Health's Web site," Chen said.

"Hospitals should not be allowed to make money this way," she added.

Chen said the BNHI is unwilling to admit the pricing problem.

"Whenever lawmakers questioned BNHI officials about drug prices, they always replied that these must be kept secret," Chen said.

"I believe the drug-price problem is one factor contributing to the BNHI's massive deficit," Chen added.

Chen suggested that the BNHI should appoint members of its drug-price monitoring team only after the Legislature had approved the candidates.

Currently, the identities of the 15 members of the BNHI's drug-price monitoring team remain confidential.

"I cannot reveal who they are. If I expose their identities, they will be have to answer endless queries about drug prices," said Liu Chien-hsiang (劉見祥), the BNHI's deputy general manager, in a press conference yesterday.

He said all 15 the members are medical or pharmaceutical professionals.

In response to Chen's accusations, Liu said the BNHI has launched an investigation into drug prices in the domestic market.

"By the end of this year, we will complete the investigation. According to the results of the investigation, the BNHI will reduce the money it pays hospitals for drug purchases at the beginning of next year," Liu said.

"At this moment we cannot ascertain how much hospitals may be making from the alleged price differences," Liu said.

"But the lawmaker's allegations that the scam comprises NT$20 billion is certainly exaggerated," said Chen I-feng (陳逸峰), another deputy general manager of the BNHI.

According to Chen I-feng, the BNHI's total expenditure on drugs last year was NT$84.7 billion.

Sheen Mao-ting (沈茂庭), a BNHI official, reported that the growth rate of the BNHI's annual expenditure on drugs has slipped from 1998's 12.92 percent to last year's 1.72 percent.

Sisy Chen also proposed yesterday that the government should cut the budget for the bonuses given to the BNHI's employees.

"Presently the BNHI has a cash-flow problem. If its employees want bonuses, let them get them from unpaid premiums," said Sisy Chen. Some three hundred thousand people -- 0.01 percent of the population -- owe the BNHI premiums.

Liu said Sisy Chen's proposal is very unfair to the BNHI's employees.

"We receive our bonuses according to the government's regulations. Why always target our bonuses?" Liu asked.
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