China unveils large price cuts for three drugs, including AstraZeneca's Iressa, GlaxoSmithKline's Viread

Chinese health authorities on Friday announced price cuts of more than 50 percent for three drugs, including AstraZeneca's Iressa (gefitinib), with the monthly cost of the lung cancer therapy being slashed from 15 000 yuan ($2291) to 7000 yuan ($1069). Meanwhile, the National Health and Family Planning Commission said the cost of GlaxoSmithKline's hepatitis B drug Viread (tenofovir disoproxil) would fall to 490 yuan ($75) a month from 1500 yuan ($229), with the cost of Betta Pharmaceuticals' lung cancer treatment Conmana (icotinib) dropping from 12 000 yuan ($1833) to 5500 yuan ($840).

According to the National Health and Family Planning Commission, the lower prices will apply to all public medical institutions, including military hospitals. Although the three drugs won't be covered by the national health insurance programme, they might be included in some provincial reimbursement lists.

GlaxoSmithKline, which has faced lower sales in China since being found guilty of bribery in the country in 2014, stated that the reduced price for Viread is expected to result in increased sales volumes. Commenting on the news, Hervé Gisserot, general manager of pharmaceuticals and vaccines for GlaxoSmithKline China/Hong Kong, remarked "this represents a defining moment in the government's efforts to provide high-quality, innovative products at more affordable prices, and ultimately improve patient outcomes in China." Meanwhile, Betta Pharma stated that participation in the programme will allow it to expand accessibility to Conmana, while helping the government reduce health insurance spending.

Yang Dongsheng, tendering officer of the Pharmaceutical Association Committee, an advocacy group representing major international pharmaceutical companies in China, explained "if the national negotiation works well, it will save drugmakers from going through negotiations with each province and further price cutting on the local level." Dongsheng continued "it's easier to reach agreement on the national level."

Sources noted that Roche and Celgene were also selected for participation in the programme. A Roche spokeswoman indicated that the drugmaker had actively participated in the first round of discussions and received positive feedback from relevant authorities, but its cancer treatment Tarceva (erlotinib) was not selected for the programme. Meanwhile, people close to the matter explained that the results of negotiations with Celgene on its cancer drug Revlimid (lenalidomide) will be announced at a later date.

Earlier this year, the National Health and Family Planning Commission expressed intentions to lower the prices of treatments for serious diseases such as cancer without naming any specific drugs. Additionally, a report in March suggested that efforts to control drug prices in China have resulted in a slowdown of the pharmaceutical industry in the country.

In 2015, China's National Development and Reform Commission eliminated price controls on a majority of drugs, stating that it would establish a price monitoring system and focus on detecting unlawful behaviours. Later, a source revealed that the Commission was considering a large-scale probe into possible anti-trust activities in the pharmaceutical industry after requesting information from companies including Pfizer.

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