Medical insurance catalog + volume purchase double pressure, foreign companies still have room to drop drug prices

In recent years, China's regulatory policies have effectively regulated the unreasonable pricing behavior of large pharmaceutical companies in the Chinese market, and national medical insurance negotiations and volume purchases have also enabled foreign pharmaceutical companies to effectively control drug prices

Foreign pharmaceutical companies actively seek to be included in the national medical insurance catalog

In the first half of this year, AstraZeneca’s sales in mainland China increased by 11% at a constant exchange rate to US$3.

Frank Clyburn, president of Merck's human health in the company's most recent quarterly conference call, performance growth, "driven mainly by Gardasil"

Another company that has benefited from its recent inclusion in the National Medical Insurance Catalog is Novartis

Eli Lilly’s Chief Financial Officer Anat Ashkenazi said that “due to the significant acceleration in sales of new drugs in the past three quarters,” Eli Lilly achieved a 35% growth in the Chinese market in the second quarter

Volume purchases further effectively supervise high pricing

In order to reduce the cost of medicines, China launched a new plan in 2018 to reduce the prices of generic medicines

In response to this, many foreign pharmaceutical companies have begun to divest the rights of drugs in mainland China to other companies

In July, the National Medical Security Administration of China convened insulin developers to discuss a centralized procurement plan for key diabetes drug categories

Under the new policy, the unreasonable pricing behavior of foreign pharmaceutical companies in the past has been effectively supervised.

Reference source: Merck, Novo, Sanofi and more pull off China growth thanks to price maneuvering.