The bad news for drugmakers counting on emerging markets: China has slashed prices on 95 drugs--including cancer and immune-system treatments--by an average of 17%. The good news: It could have been worse.
The National Development and Reform Commission zeroed in on three costly types of treatment: oncology drugs, immunologic treatments and blood products. And within those areas, the NDRC targeted products with "high daily costs," leaving lower-cost treatments unscathed.
"This latest move was in-line with past drug price cuts of about 18 and 19 percent, so the market would see this as quite reasonable," Nomura analyst Gideon Lo told Bloomberg.
In adding these drugs to the list of "essential medicines" subject to government price control, the NDRC is following through on promises to include patented, branded drugs. It's the latest sign that Big Pharma's hopes for big growth in China will be tougher to realize than drugmakers might have expected. The government says it's planning to expand the essential meds list further, to a total of 800 products. It now covers about 300.
The cuts are designed to not only save the government money, but to reduce costs for patients, who shoulder at least half the price of these expensive treatments. As Reuters reported yesterday, patients' frustration has been growing along with the cost of treatment, touching off violence against doctors and providers.