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Lower drug prices expected following GSK case


14:14, July 26, 2013

Photo taken on July 25, 2013 shows GlaxoSmithKline (GSK) China company at the Tianjin Economic and Technoogical Development Area in Tianjin, north China. As investigations into GSK China deepen, expectations are rising that the company's drug prices can be further lowered. (Xinhua/Yue Yuewei)

BEIJING, July 26 (Xinhua) -- As investigation into GlaxoSmithKline (GSK) China deepens, expectations are rising that drug prices can be further lowered.

The Ministry of Public Security (MPS) announced late Thursday that police investigations into GSK China's suspected bribery were being progressed with the GSK's cooperations.

Some senior executives of GSK China colluded with affiliated companies to offer large bribes to push up drug prices, expand sales and seek illegal profits, an MPS statement said Sunday.

GSK said earlier it planned to restructure its operations so as to cut down operational costs.

According to current investigations, the costs of GSK China's commercial bribery account for nearly 30 percent of its drug prices, which means prices could drop by 30 percent.

GSK said on July 22 that savings made as a result of proposed changes to its operational model will be passed on in the form of price reductions, ensuring medicines are more affordable to Chinese patients.

At the beginning of this month, the National Development and Reform Commission (NDRC) carried out probes into dozens of drug makers, including GSK China, concerning drug companies' production costs.

The NDRC, the country's top economic planning body, has also ordered price supervisors to keep a close eye on drug prices, conducting investigations and handing down punishment if the price for a drug is unreasonably high.

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