China to lift most drug price controls in move aimed at safety, innovation

Price controls on most drugs sold in China will be lifted in June, the National Development and Reform Commission (NDRC) said on Tuesday, a move signaled earlier by Beijing as a way to tackle issues of safety and to encourage innovation among domestic companies.

Under a new system, China will work toward a combination of market pricing and government guidance, according to a statement and Q&A posted in Chinese on its website. The move has been telegraphed for months and should be seen as positive for large Chinese drugmakers as well as biotechs and innovative companies hoping to bring products to market locally at first.

"With the consent of the State Council, the National Development and Reform Commission ... informed the government decided to cancel most of the drug pricing since June 1, 2015," according to an online translation.

The commission, which has broad authority over many economic policy areas in China, also said the move should not mean immediate steep increases in drug prices.

"Prices should remain basically stable," an NDRC official said.

However, controls will remain in place for anesthetics and psychiatric medications and payments under national insurance will be subject to guidelines.

As well, competitive bidding for large-scale purchases of certain drugs by hospitals will be encouraged with provincial variations.

Under current rules, price caps on the retail prices of most drugs were blamed for low-quality products, some adulterated, that threatened public health.

- here's the release from NDRC (Chinese)