BEIJING, Feb. 28-- China's cabinet has ordered hospitals to order drugs only from pre-approved suppliers, in a move intended to regulate a system rife with corruption.
In a circular released on Saturday, the State Council General Office also said that hospitals should pay distribution fees directly to logistics companies to reduce intermediate links, and introduced a "multi-party negotiation mechanism" to formalize price negotiations between hospitals and suppliers.
The move will aid hospital reform, regulate medicine supply and improve state policies in this regard, according to the document, which stressed that the new policies draw on international convention.
Bribery is common in the bidding process to supply drugs to Chinese hospitals. The winning firms are often unable to fulfill their contracts.
There is also a trend of doctors prescribing unnecessary, expensive drugs to reap profits for hospitals or obtain kickbacks from drug companies.
The State Council promised harsh punishments for violations of the new process.
The new rule will effectively curb corruption in drug purchasing, according to Fan Dijun with the Chinese Academy of Governance.
J-11 fighters in air exercise
PLA soldiers operating vehicle-mounted guns in drill
Beauties dancing on the rings
Blind carpenter in E China's Jiangxi
Top 10 highest-paid sports teams in the world
In photos: China's WZ-10 armed helicopters
UFO spotted in several places in China
Certificates of land title of Qing Dynasty and Republic of China 
Cute young Taoist priest in Beijing
Obama is sowing discontent in S.China Sea
Rescuers work through night to reach cruise ship survivors
Driving through limbo
Facing down MERSDay|Week
