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Drugmakers cut prices by 61% to get on Chinese reimbursement list

Published on 28/11/19 at 11:16am

AstraZeneca and Roche Holding are among a number of drugmakers to cut their prices in order to get on China’s national reimbursement scheme list. The average price cut is about 61%.

The National Healthcare Security Administration said on its website that seventy new drugs are being added to China’s state-run medical insurance fund. This includes Novartis’s dermatitis treatment Xolair (omalizumab), Roche’s breast cancer treatment Perjeta (pertuzumab), and AbbVie’s arthritis treatment Humira (adalimumab).

Chinese patients are allowed to use their state medical insurance to help subsidise most of the cost of the drugs on the list. The $454 billion national medical fund covers 95% of China’s population, but they are demanding deep price cuts on drugs to avoid bankrupting the fund.

This has put pressure on foreign drug companies to lower their prices, if they want to gain a greater foothold in the Chinese market. Being on the list of drugs on the national medical insurance fund allows these companies to boost their sales by accessing less-affluent and small Chinese cities.

Brad Loncar, Chief Executive of biopharma sector-dedicated Loncar Investment, said: “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.”

Conor Kavanagh

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