China gearing up for antitrust pricing drive against drugmakers

Print 12 May 2016
EJ Lane / FeircePharmaAsia

Foreign and domestic drug and device companies in China face the prospect of "large-scale and systematic" antitrust probes with several, including Pfizer, already asked to provide operational details, China Daily reports.

Citing sources close to the regulator, China Daily said the National Development and Reform Commission (NDRC) is particularly interested in competition issues related to pricing.

A Pfizer spokeswoman said the company does not respond to market rumors.

Drug and device companies operating in China face a determined push by the government to curb drug costs through stricter tender rules and steps like eliminating markups for prescriptions filled at public hospitals.

That campaign's focus on competition falls to the NDRC--a body that monitors prices and competition across the economy and regularly takes steps to curb monopoly practices.

China spends around $115 billion on pharmaceuticals, according to industry estimates, with reimbursement covering mainly essential drugs and public health campaigns--while many cutting-edge therapies in fields such as oncology are paid out of pocket if available in China.

In first-quarter earnings calls, most multinational drugmakers outside of AstraZeneca ($AZN) have reported continued price and sales pressures in China.

China Daily notes that pressure has come from the top, with Premier Li Keqiang last month pressing for lower drug prices as a key piece of reform plans for the economy.

Still, breaches of competition law come with penalties that are remedial in nature and not on the scale that saw GlaxoSmithKline ($GSK) famously pay a $489 million fine in 2014 for bribery and other charges in the sale of drugs to hospitals and doctors.

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