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People's Daily Online>>China Business

Cut-price drugs

By Liang Fei (Global Times)

08:02, April 17, 2012

Starting from May 1, the prices of 53 types of digestive medicines will be lowered by an average of 17 percent, as part of recent reforms to reduce the country's medical costs.

"This price cut could save over 3 billion yuan ($475.53 million) for consumers each year," the National Development and Reform Commission (NDRC) said in a statement.

The NDRC has reduced drug prices 29 times since starting the medical reforms in 1998. As usual, both generic and original brand name drugs are included in the price cut.

However, if that's good news for consumers, it's not so good for foreign pharmaceutical firms.

Foreign pharmaceutical firms, which produce most of the original drugs, will again take a major hit in terms of revenue. The prices of original drugs will be reduced by as much as 22 percent after the new price adjustment, the commission said.

Around 20 foreign pharmaceutical companies will be affected by the price adjustment, including big names like AstraZeneca and Novartis.

"Since sales of many drugs involved in the price adjustment are very big, the profits of these companies will be significantly affected," said the R&D-based Pharmaceutical Association Committee (RDPAC), an organization that represents more than 30 multinational pharmaceutical companies in China under the China Association of Enterprises with Foreign Investment.

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