Foreign drug-makers forced to lower prices

16:12, December 01, 2010      

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Starting on Dec. 12, the maximum retail prices of some medicines with independently fixed prices will be lowered, which means high-priced essential medicines produced by foreign enterprises will be regulated for the first time, according to a notice issued by the National Development and Reform Commission of China (NDRC) on Nov. 30,.

NDRC documents show that the medicines involved in this price adjustment are mainly medicines produced by foreign-invested enterprises and joint ventures, and more than 100 kinds of medicine produced by 40 foreign pharmaceutical companies are involved.

Roche's Cefatriaxone, GlaxoSmithKline's Cefuroxime and Merck's Simvastatin are all included on the list. An official from the NDRC said: "At this time, almost all medicine with prices independently fixed by foreign enterprises will be lowered."

It is estimated that the price adjustment will unload a heavy burden of about 2 billion yuan from China’s domestic medical expenses. The NDRC also clearly expressed that "the prices of all high-priced medicine will be lowered in batches and in periods in order to further reduce the heavy burden of medical expenses on the public."

Money spent on essential medicines will be fully reimbursed in the medical insurance and new rural cooperative medical care systems, and the price ceiling will be regulated by the NDRC. However, some essential medicines from foreign companies that enjoy preferential policies of independent price-fixing will not be limited by the price ceiling and can remain at a high price and enjoy full reimbursement.

Analysts said that simply reducing the prices of medicine will influence the gross profits of foreign pharmaceutical companies to some extent, but it will not necessarily cause significant impact because some medicines from foreign companies indeed have a higher quality and better brand and curative effects than the domestic medicine of the same kind.

Therefore, reducing the maximum retail price of foreign medicines will most likely enhance their sales volume in retail drugstores and even cause an impact on the domestic medicine of the same kind.

By People's Daily Online


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