[Ip-health] News: PharmaTimes- China: drug price cuts averaging 19% this week

Terri Beswick Terri at haieurope.org
Thu Dec 9 01:16:24 PST 2010

China: drug price cuts averaging 19% this week 

World News | December 08, 2010 


Lynne Taylor 


China has announced that it will reduce the retail prices of 174
medicines produced by more than 60 drugmakers on December 12, in a move
which it says will save consumers around 2 billion yuan a year.


Drugmakers had been permitted higher prices for certain products before
2005 in order to encourage technological upgrades, but the costs of
production have declined considerably in recent years as a result of
such upgrades and market expansion, according to a statement issued by
the National Development and Reform Commission (NDRC). Therefore, as
part of official moves to curb health care spending, it has been decided
to set lower caps for the maximum retail prices of these widely-used
products, added the NDRC, which is China's supreme economic planning


Some of the drugs whose prices are to be cut are made by local units of
western drugmakers such as Bristol-Myers Squibb, Eli Lilly, Merck & Co,
Novartis, Pfizer, Roche and others, said the Commission, adding that
they will include antibiotics and medicines used in the treatment of
heart disease.


And some reductions will be more than 19%, such as Bristol-Myers
Squibb's hypertension and congestive heart failure treatment Capoten
(captopril), whose price will drop 35%, and Roche's Rocephin
(ceftriaxone), used in the treatment and prevention of bacterial
infections, down 30%.


Research firm Datamonitor comments that the price cuts represent "mixed
messages" for multinational pharmaceutical companies. One the one hand,
some firms are pushing for their products to be included on China's
National Reimbursement Drug List (NRDL), despite the risk of price
reductions, while others are "lobbying for the Chinese government to
introduce a more balanced system and to reward innovation and quality,"
said the firm.


China is currently the world's third-largest pharmaceutical market,
behind the US and Japan, and sales by both multinational and local
drugmakers are expected to continue showing spectacular growth. A new
report from Sinolink Securities forecasts that  revenues and profits for
China's pharmaceutical industry next year could rise 20% and 25%,
respectively, while IMS Health projects that the market will grow by as
much as 27% in 2011 to reach a value of more than $50 billion, and that
by 2015 China will have overtaken Japan to become the world's
second-largest market. 





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