The central government has capped the retail price of 32 traditional Chinese medicines used to treat tumors.

The National Development and Reform Commission said the cap, involving 117 specifications of medicine, will be implemented on Monday.

Medical institutions are limited to a 15 percent surcharge.

Analysts said frequent price cuts aiming to make medicines more accessible affect many pharmaceutical companies' profits, but help big companies with good-quality of medicine.

"This time the average price cut is 25 to 30 percent," said Wang Youhong, an analyst from Haitong Securities.

"The price regulation used to be limited to chemical medicines, but has now been extended to almost all other sectors including traditional Chinese medicine."

Wang said some major pharmaceutical companies would maintain high profits on brand products.

The new rules allow some good-quality medicine to be sold at higher prices than common medicine of the same type.

The regulated price of Compound Mylabris Capsules of Chongqing Hilan Pharmaceutical Company is 180 yuan (US$22.50), 19 percent above that for other such capsules.

This is the 20th time the government has cut drug prices, responding to public complaints about the cost of drugs and medical services.

In June, the government cut the retail prices of 67 drugs used for treating cancer by between 23 percent and 57 percent.

And in August, the commission reduced prices an average 30 percent for more than 400 preparations, which affected 100 types of anti-microbial drugs.

Wang said price cuts are expected to continue because the government wants to reduce the medical burden on citizens.

(Shanghai Daily November 16, 2006)