At a State Council executive meeting on Aug 16, Premier Li Keqiang emphasized the importance of basic and first-aid medicine and called for the secure supply of both, especially life-saving medicine.

Medicine concerns people's lives and health, so prices cannot be raised at will, he said.

The meeting decided to ensure the steady supply of basic and first-aid medicine at stable prices.

Premier Li said that when he inspected Hangzhou, Zhejiang province in June, he learned from a community drugstore staff member that some domestic-made first-aid medicine had been out of stock for a long time and that imported substitutes cost several times as much.

Premier Li called for the establishment of a long-term mechanism to ensure a steady supply of basic and first-aid medicine at stable prices.

At the meeting on Aug 16, decisions were made to improve medicine-procurement policy to address shortages of common medicines and unreasonable price hikes.

While accelerating collective procurement and medicine pilot schemes, enterprises will be allowed to set appropriate prices for medicine on the national and provincial-level shortage lists.

Centralized procurement will be encouraged for medicines with few alternatives and unstable supply, the meeting decided.

China is considering expanding the import of in-demand medicines and facilitating the upgrading of related domestic industries.

According to the meeting, medical establishments will face tighter supervision of drug use to ensure a preferential position for basic medicines in procurement and utilization.

At State-run grassroots medical institutions as well as level-two and level-three hospitals, the proportion of basic medicines to total drug stock will be further raised.

It is normal to see drug prices rise and drop within a reasonable range, Premier Li said, but regulations should also be in place to control unreasonable price surges.

Market-based adjustment should be a favored approach, he said.

The meeting decided to improve the early-warning system for medicine shortages, implement a production-suspension-reporting system, prompt medical institutions to set inventory warning lines, and build up a reserve for medicine that may be in severe shortage.

The government will improve laws and regulations to guard against monopoly and manipulation of drug prices, and violators will face significant fines, market prohibition, and criminal penalties.

The supply and price of basic and first-aid medicine should be also guaranteed, the Premier said at the meeting.