China to probe drug, device pricing among domestic, foreign firms

Print 02 June 2016
EJ Lane / FeircePharmaAsia

China's National Development and Reform Commission (NDRC) will launch an investigation into all aspects of drug and medical device sales and prices among domestic and foreign firms in a step that could lead to enforcement action.

In an online notice, the NDRC, which monitors prices and competition and regularly takes steps to curb monopoly practices, said the initial aim is to gather information from companies, hospitals and related industry players to assess price fluctuations amid regulatory efforts to reform the way drugs are bought and sold in China.

The probe will last through October with the impact of drug price reform over the past year to be looked at amid concern about "frequent price changes," according to the NDRC statement.

Earlier in May, China Daily tipped that a fresh look at pricing for drug and device companies was in the works and mentioned that some firms, including Pfizer ($PFE) had already been contacted for information on pricing.

China's policymakers have taken several steps to curb drug prices, including eliminating a 15% markup at 200 public hospitals nationwide on drugs prescribed and bough onsite and in a pilot program to negotiate lower patented drug prices.

Companies in China are aware that financial and other penalties for breaches of competition law can be assessed from remedial actions to a 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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