During the last round of price cuts, Chinese drug prices have fallen about 45%, and price reductions have affected close to 300 drugs. In mid-June, China’s National Healthcare Security Administration (NHSA) laid out certain new documents which outline its rules for inclusion on the National Reimbursement Drug List (NRDL). China’s healthcare system uses the NRDL to determine which drugs will get reimbursement. In one of the presentations, the NHSA stated that they will evaluate 5 factors for drug reimbursement including how innovative the drug is, what is the drug’s economic value, and the safety and efficacy profile. They also mentioned “fairness”, which includes how many patients the drug will help, how it will affect existing drugs on the market, etc. Drugs that are backed by the Ministry of Science and Technology should also do better with pricing.
A key consideration is the advantages/disadvantages over existing drugs. By this fall, the new NRDL will be released. For non-exclusive drugs, the NHSA has implemented a bidding process, and the state medical insurance program will go for the lowest bid. Some of these drugs will now face price caps. Some foreign drug companies have now lowered their prices to preempt price reductions by the NHSA. If drugs are approved before June 30, they will be subject to next year’s NRDL.
Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.
Source used in the article: https://www.gtlaw.com/en/insights/2023/2/china-on-the-move-lesson-from-chinas-national-negotiation-of-drug-prices-in-2022