China: Drug Makers May Have to Compromise on Price in Order to Access China’s Market

Chinese officials are pushing for more deals from drug makers in an increasing effort to make healthcare more affordable. Mr. Zhu Chen, China’s former health minister, made it clear in an interview in April, 2013, that Pharmaceutical companies would need to lower drug costs in order to access China’s market.

China has already dramatically increased the number of drugs subject to price limits on its essential drug list from 205 to 317 in 2013. Pharmaceutical companies will be pressured to cut prices on other drugs too. Some companies may want to follow Novartis’s lead. Novartis, instead of cutting prices directly on its cancer drug, Gleevec, made a buy one get three free deal with the Jiangsu provincial government last year. This dramatically cuts the cost of care per patient, but allows Novartis to keep the drug’s official price in China high.