Facing budget pressure, China furthers drug price cuts and pushes reimbursement reform

China has released a new list of 36 drugs, including 31 chemicals and biologics and five traditional Chinese medicines, covered by China’s national Medicare reimbursement scheme, reports The Pharma Letter’s local correspondent Wang Fangquing.

All the 36 drugs went through rounds of negotiations with China’s Ministry of Human Resources and Social Security to lower their prices. For example, GlaxoSmithKline (LSE: GSK) got breast cancer drug Tykerb (lapatinib) into the list after a price cut of 42%  from 121 renminbi/tablet ($17.9)  to 70 renminbi;  Bayer ‘s (BAYN: DE) liver and kidney cancer drug Nexavar(sorafenib) is now priced at 203 renminbi/tablet (0.2g) , down 51.5% from the previous 419 renminbi, and Roche (ROG: SIX) cut an average of 59% to get three monoclonal antibodies – MabThera (rituximab), Herceptin (trastuzumab), Avastin (bevacizumab) - onto the list.

China will continue to cut prices of prescriptions as the country faces great pressure on its budget. The size of China’s national health insurance fund reached 1.26 trillion renminbi in 2016, up 13% year-on-year, but the size of prescriptions market in the country was already around 1.25 trillion renminbi in 2016, according to Beijing-based Baolaitong Tech, an IT service provider for the pharma industry.