Photo/Shetuwang

Nov. 29 (NBD) -- Global drugmakers including Johnson & Johnson (NYSE: JNJ), Roche (OTCMKTS: RHHBY), Novartis (NYSE: NVS) and Merck & Co. Inc. (NYSE:MRK), have agreed to cut the prices of some newest drugs by an average of 60.7 percent, the biggest discount ever around the world, in order to get included in China's medical reimbursement list, the National Healthcare Security Administration said on Thursday.

The list contains medicines that are covered by China's basic medical insurance system. It's noticed that among the 70 newly-added pharmaceuticals, imported drugs accounted for more than a half, reaching 49.

With regard to the big price cuts in China, Deng Yuexin, person-in-charge of the marketing division at Novartis China, told National Business Daily (NBD) in an interview that they were hesitant at the very first beginning. However, considering China's high efficiency in importing innovative drugs and the growing Chinese pharmaceutical market, Novartis is determined to boosting medicine sales through low prices in China, added Deng.

Statistics from global accounting firm Ernst & Young indicated that China's pharmaceutical market reached 137 billion U.S. dollars in 2018, making up 11.37 percent of the global scale and ranking second in the world, and is estimated to hit 140-170 billion U.S. dollars by 2023.

Amid such a strong market, NBD observed that this is not the first time foreign drugmakers sought sales growth by offering price cuts to get on the list. 

In August 2018, Tagrisso (Osimertinib), a medication used to treat non-small-cell lung carcinomas and produced by an English-Swedish biopharmaceutical company AstraZeneca (NYSE: AZN), was included in the catalog. It's worth noting that the medicine brought only 123 million yuan (17.5 million U.S. dollars) in sales in China last year but generated 903 billion yuan for the first three quarters in 2019 after the inclusion.

Another reason behind foreign drugmakers' effort to get on the list is to prevent generic drug producers in China from staying ahead of the game so that the development space would not be squeezed, noted Qu Shiyin, director at the Shanghai division of Haitong Securities Company Limited.

Some held that with the launch of the new catalog and crowds of foreign players in, the pharmaceutical market in China will see a round of reshuffle.

But some were concerned about the continuous supply of pharmaceuticals made by foreign firms. "It remains a question whether those foreign drugmakers could sustain the medication supply at such low prices when there are no generic equivalents of the originator products," warned an insider, "Therefore supply suspension would possibly happen if no specific mechanism for pooled procurement of medicine is established." 

Email: gaohan@nbd.com.cn