China Briefing - April 2012 (May 21, 2012)

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Pharmaceuticals, Medical Devices, Health Care & Life Sciences

News

• NDRC: Chinese government to review carefully drug pricing differences between ex-factory and bid prices (NBD News 2012-04-05) – April 5, 2012 Pharmaceutical companies determine bid prices for drugs sold to hospitals based on a number of factors. The National Development and Reform Commission (NDRC) issued a circular recently, requiring its local counterparts and price bureaus to strengthen the review and the monitoring of drug ex-factory prices. The successful bidders may be disqualified if the gap between the ex-factory price and the bid price is too large. Whether drug prices will be reduced because of this new policy is unclear.

• NDRC Provisional Drug Pricing Measures on Mark-ups not Likely to be Released Soon; 2012 EDL Implemented in 15 Provinces (USCBC Health Update 2012-04-25) – April 28, 2012 The National Development and Reform Commission (NDRC)’s Provisional Measures for Drug Price Circulation Administration introduced February 2012 is unlikely to be released in the near term, according to Yu Mingde, head of the China Pharmaceutical Enterprise Association. The Provisional or Interim Measures, which would have been implemented July 1, 2012, would have decreased the drug circulation mark-up rate from 40 percent to 30 percent. Xinhua reported that industry watchers thought the new measure would be difficult to implement and would lead to drug price increases, which had been a key point of debate. Xinhua also reported that the 2012 Essential Drugs List (EDL) has currently been implemented in 15 provinces, with an average price cut of 49 percent. Shandong Province has seen the largest cuts (63 percent), whereas Zhejiang Province and others have had comparatively fewer (33 percent) cuts so far this year.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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