Guangdong's new procurement policies to affect multinationals

The local operations in China’s Guangdong province of nine departments and ministries, including the CFDA, the Ministry of Finance and the National Health and Family Planning Commission (NHFPC), jointly issued five new policies for public hospitals in the region on drug procurement, which is done at a medicine exchange in Guangzhou, a pilot project launched in 2013 aiming to lower drug prices through online auction, reports The Pharma Letter’s local correspondent Wang Fangqing.

The policies, in effect on September 2, cover management, clearance and distribution, affecting nearly 40,000 drug varieties trading in the exchange. While price-cut is still the focus, the target moves to brand name drugs with expired patent protection.

Wu Jingzeng, a director of the NHFPC local office, told Chinese local media that these brand name drugs without patent protection need to cut prices by 4% to get into the auction and a further 2% to beat up their generic version.