Major Price Cuts for 42 Drugs by Novartis, Roche, Hansoh and Others in Hubei Province

Source: Hubei Medical Procurement Network

▍ Compiled by: SycnBlue — Yumi

Novartis, Roche, Hansoh Pharma, and Other Pharmaceutical Companies: Significant Price Cuts for 42 Drug Products

▍Price Cuts for 42 Drugs Involving 11 Pharmaceutical Companies

On May 21, the Hubei Provincial Healthcare Security Administration issued the “Letter on Adjusting the Online Listing Prices of Certain Drugs.” The Hubei Provincial Healthcare Security Administration stated that in late March 2019, it launched the first round of work for enterprises to voluntarily declare price reductions for drugs, resulting in price adjustments for 25 generic names of drugs from six pharmaceutical companies (see attachment for details).

This month, the second batch of voluntary price reduction applications for pharmaceuticals was launched, involving 17 drugs from five pharmaceutical companies.

The Hubei Provincial Medical Products Administration issued a letter requiring medical institutions across the province to prioritize the use of lower-priced products and those with voluntary price reductions, under equal conditions.

▍Trading Price for Volume: Novartis, Roche…

The catalog shows that the two batches of price-reduced drugs involve well-known pharmaceutical companies such as Eli Lilly, Novartis, Roche, Hansoh Pharma, and Qilu Pharmaceutical. These include not only high-priced drugs such as tocilizumab injection and gemcitabine hydrochloride for injection, but also common drugs such as glucose injection and sodium chloride injection.

Medicines with significant price reductions include Novartis’ Imatinib Mesylate Tablets (100 mg), which decreased from CNY 10,040 per box to CNY 7,182 per box; Dexamethasone Palmitate Injection (1 ml: 4 mg), which dropped from CNY 495 per vial to CNY 296 per vial; and Tocilizumab Injection (80 mg/4 ml), which fell from CNY 1,923 per box to CNY 830 per box.

Price reductions for other drugs are also significant. According to the wording in the letter issued by the Hubei Provincial Healthcare Security Administration, these drugs will be given priority in clinical use following the price cuts, indicating a clear objective for enterprises to exchange pricing concessions for increased sales volume.

▍No price reduction, no use

Sometimes, price reductions are necessary.

As Liaoning Province has stated, products that fail to voluntarily declare price reductions within the specified timeframe or whose price reduction margins do not meet the requirements will be disqualified from online procurement in Liaoning Province.

The same applies to Shanghai. According to the "Supplementary Document for the 4+7 City Centralized Drug Procurement in Shanghai," non-selected drugs of the same variety with the highest price that meet the declaration requirements for this centralized procurement must undergo tiered price reductions based on the price difference from the winning bid prices (or listed prices) in Shanghai in 2017, with the selected price serving as the floor, before they can continue to be procured and used.

This also demonstrates that drug prices are continuously declining in successive waves.

▍Price Reductions Are the Main Theme

Currently, reducing drug prices is the main theme.

Under the “4+7” volume-based procurement program, all 25 selected products experienced price reductions of 52%. In 2018, China implemented zero tariffs on imported anticancer drugs. Special negotiations were conducted for the inclusion of anticancer drugs in the National Reimbursement Drug List (NRDL), resulting in the addition of 17 new anticancer drugs, with an average price reduction of 56.7%. Provincial-level special procurement programs for anticancer drugs were also carried out, leading to price reductions for a total of 1,714 drugs, with an average decrease of 10%.

At the State Council executive meeting held on February 11 this year, it was announced that measures to reduce the prices of anticancer drugs would be implemented. Effective March 1, for the first batch of 21 rare disease drugs and four active pharmaceutical ingredients (APIs), value-added tax (VAT) on imports will be levied at a reduced rate of 3%, referencing the policy for anticancer drugs, thereby driving down drug prices.

Just a few days ago, the Premier stated at the national teleconference on healthcare reform that efforts will continue to reduce artificially inflated prices of drugs and high-value medical consumables, ensure the supply of essential medicines and emergency (including critically needed) drugs, and simultaneously advance comprehensive reforms in medical service pricing, health insurance payment systems, and compensation mechanisms.

Original Title:Major Price Cuts on a Batch of Drugs! Novartis, Roche, Hansoh…