Daily Management Review

Foreign Drug Makers Present Lowest Price Global To Enter Chinese Reimbursement Scheme


In China, drug makers slash price and hope to recover the same in volume while some warn against commotion for the same in other drug markets.

Various drug manufacturers, like Roche and Novartis’, are going to cut down prices in China by “an average of 61%” for their “newest drugs”. This step comes as an attempt to fall in the category of “a national reimbursement scheme”.  
Being part of the said list will increase sales as it will allow the companies to reach out to “smaller and less-affluent Chinese cities”. However, some people from the industry are of the opinion that slashing prices steeply only in China could draw flacks and criticism from other drug markets and manufacturers alike.
The Chinese reimbursement scheme list will include seventy new drugs which will include Pertuzumab, treatment for breast cancer from Roche under the trade name “Perjeta”, Omalizumab, for dermatitis from Novatis’ under Xolair brand, Adalimumab, by AbbVie for arthritis, among others, according to the website of “National Healthcare Security Administration”.
As per Reuters:
“Also included was cancer treatment Tyvyt, or Sintilimab, co-developed by Chinese drugmaker Innovent Biologics (1801.HK) and Eli Lilly (LLY.N). It is considered to be a PD-1/PD-L1 treatment, a category of novel drugs that work on the immune system to fight cancer cells”.
However analysts think that including Tyvyt in the list would give it an advantageous edge over the foreign drugs.
People of China get to use “state medical insurance” to pay a large portion of the drug costs is they are named in the above mentioned NHSA list. Furthermore, a statement from the same organisation also informed that the new addition of imported medicine to the list came in their “lowest prices globally”.
In the words of Loncar Investments’s C.E.O, Brad Loncar:
“China is and will be the ultimate high-volume, low-price market, and so international companies feel that they’ll have to take a big pay cut but make up for the volume”.
Likewise, medicines for diabetes and tumor saw price reduction of sixty five percent, as per the NHSA.