Please login to the form below

Not currently logged in

Prices of AZ and GSK drugs slashed in China

GSK says price reductions represent  “defining moment” in improving patient outcomes

China drug medicine pharma prices

The authorities in China have agreed swingeing price cuts for three drugs in a bid to curb escalating healthcare costs.

The reductions affect GlaxoSmithKline's hepatitis B and HIV therapy Viread (tenofovir), AstraZeneca's lung cancer drug Iressa (gefitinib) and Conmana (icotinib) - another lung cancer treatment made by Chinese firm Betta Pharmaceuticals.

Viread's price has been reduced by more than two thirds to 490 yuan ($75) per month from 1,500 yuan, while EGFR inhibitor Iressa will see its price cut from 15,000 to 7,000 yuan. Conmana - another EGFR inhibitor - sees its price reduced from 12,000 to 5,500 yuan.

The price reductions are a blow to companies hoping to expand in emerging markets such as China, with prospects already dented by the downturn in the global economy, pricing pressure on off-patent drugs and long and uncertain product approval times caused by ongoing regulatory reforms. 

Both GSK and AZ have previously suggested that emerging markets are platforms for revenue growth. Now, with China's attention turning to the price of in-patent drugs as well as generics, there are concerns the entire pharma sector in the world's second-largest economy may be affected.

The companies affected by the reductions insist however that is not the case, as price reductions would be counterbalanced by volume growth.

GSK said the price reduction came after negotiations with the Chinese authorities and would actually lead to an increase in Viread use, as the price now falls within China's reimbursement thresholds for medicines. Previously, patients wanting access to the drug often had to fund it out-of-pocket.

Hervé Gisserot, head of pharmaceuticals and vaccines for GSK China/Hong Kong, said in a statement that the agreement "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".

That aside, two other companies - Celgene and Roche - opted out of price negotiations, with Reuters suggesting they may have considered the price cuts too steep to offset any increase in sales.

GSK has prior history in this regard, however, offering to discount its HIV drug Tivicay (dolutegravir) last year in order to improve access in China. The company has been working hard to restore its reputation in the country in the wake of a bribery and corruption scandal that led to a fine of $487m in 2014.

China's healthcare market is predicted to grow 13.5% this year to $686bn, with pharma sales rising 12% in local currency terms to $115bn, according to data from BMI Research. However, BMI also expects pharma sales as a proportion of total health spending to decline from a current level of around 17% to just over 15% by 2020.

The price reductions have been levied by China's National Health and Family Planning Commission, which first signalled its intent to reduce the prices of some high-ticket medicines in March. 

Article by
Phil Taylor

23rd May 2016

From: Sales



Subscribe to our email news alerts


Add my company
Blue Latitude Health

Blue Latitude Health is a creative marketing consultancy. Founded in 2003, our combination of heritage, approach and capability gives us...

Latest intelligence

Parkinson’s disease: past, present and future
Examining the history and complexities of Parkinson’s disease – one of the most prevalent neurodegenerative disorders that affects over 10 million people worldwide...
The 17th World Congress on Controversies in Neurology
This year, there was a focus on the rare disease neuromyelitis optica spectrum disorder that strikes suddenly and mainly impacts women...
Archetypes: Rethinking go-to-market expectations to drive commercial success
In this white paper, our consultants analyze trends spanning global policy developments, rising inflation, and increasingly complex customer journeys, and reveal a new data-driven approach to archetyping that crystalizes the...