A series of measures will be adopted supporting "fair-price drugstores" to cut local consumer drug prices, said a spokesman for the Shanghai municipal government yesterday during a weekly news conference.

The restriction on the number of drugstores providing low-cost drugs will be abolished and the approval process for such stores will be simplified.

Fair-price drugstores are expected to be included under the local medical insurance system.

"Such supportive measures aim to benefit customers, lower drug prices and push forward health reform across the city," said the spokesman.

The city's drug retailing sector has up to now been dominated by several large franchise drugstores and most drugs are sold at the top price allowed by the Price Bureau.

This May witnessed the opening of the city's first fair-price drugstore, "Kaixinren," in the city's Yangpu District. It sells drugs at prices 10 to 40 per cent lower than other drugstores.

This has triggered the first significant drop in drug prices and covers about 30 per cent of the city's 1,600 drugstores.

According to Zhen Chunyuan from the city's Drug Administration Bureau, five large-scale fair-price drugstores have been given licences to enter the market.

However, the annual retail sales of drugs through pharmacies total 4 billion yuan (US$482 million), accounting for only 20 per cent of total drug sales, the major sales volume being handled by hospitals.

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