Why are pre­scrip­tion drugs so expen­sive? Here’s the answer. A few years ago, Chi­na’s state-owned Harbin Phar­ma­ceu­ti­cal Group Co., the coun­try’s sec­ond-largest drug­mak­er, post­ed a series of pho­tos of the inte­ri­ors of their office in Harbin, north­east of Hai­longjiang province, on its web­site. The extrav­a­gant inte­ri­ors are dec­o­rat­ed with lux­u­ry in the style of the Palace of Ver­sailles, with wood carv­ings, gold inlays, a triple-tiered crys­tal chan­de­lier and mas­sive mar­ble columns. The con­struc­tion of the build­ing and inte­ri­or dec­o­ra­tion cost the com­pa­ny more than 93 mil­lion yuan (US$15 mil­lion).

Chinese company office

Entry relat­ed to loca­tion: Chi­na

Unsur­pris­ing­ly, the pho­tos caused a huge uproar among Chi­nese Inter­net users and drew a fair amount of crit­i­cism. Thou­sands of tes­ti­mo­ni­als said, “This is a palace that is based on the pain of mil­lions of patients”, “Now I final­ly know why the Chi­nese can­not afford to go to the doc­tor and buy med­i­cine”, etc.

Cit­i­zens liv­ing near the build­ing also react­ed angri­ly to what was hap­pen­ing, insist­ing that the mon­ey would be bet­ter spent on solv­ing the fac­to­ry’s sewage prob­lem. A few months ear­li­er, the com­pa­ny was accused of ille­gal­ly dump­ing waste gas and indus­tri­al waste into sewage. The com­pa­ny said at the time that it did not have the mon­ey to fix the prob­lem.

The fir­m’s annu­al report in 2010 showed that 19.6 mil­lion yuan (US$3 mil­lion) was spent on envi­ron­men­tal pro­tec­tion, but 27 times more on adver­tis­ing. Accord­ing to the Min­istry of Finance, the com­pa­ny made a prof­it of almost 2 tril­lion yuan that year.

After see­ing the pub­lic’s reac­tion, the com­pa­ny removed the sen­sa­tion­al pho­tos from its web­site and said the pic­tures were tak­en at a wood­block art muse­um locat­ed in the same build­ing as the com­pa­ny’s head­quar­ters. The head of the com­pa­ny assured that the main premis­es of the com­pa­ny were as sim­ple as pos­si­ble, with the excep­tion of a lux­u­ri­ous lob­by and a muse­um. The muse­um was added to pro­mote cul­tur­al devel­op­ment and high­light the com­pa­ny’s social respon­si­bil­i­ty.

Phar­ma­ceu­ti­cal com­pa­nies and hos­pi­tals all over Chi­na are noto­ri­ous for the hefty fees charged by doc­tors pre­scrib­ing expen­sive drugs and high-tech tests. Data from the Min­istry of Health shows that approx­i­mate­ly 50% of all health care spend­ing in Chi­na is for med­i­cines, which is dis­pro­por­tion­ate­ly expen­sive com­pared to oth­er coun­tries.

See also
Afronauts by Christina de Middel