Certain Anti-Cancer Drugs See Price Cuts Exceeding 70%, Saving Patients Over $1,500 Per Box

Recently, authorities have been intensively rolling out measures to drive down drug prices.

In mid-January, the General Office of the State Council issued the "Pilot Program for Centralized Procurement and Use of Drugs Organized by the State," deploying pilot work for the centralized procurement and use of drugs organized at the national level. Eleven cities—Beijing, Tianjin, Shanghai, Chongqing, Shenyang, Dalian, Xiamen, Guangzhou, Shenzhen, Chengdu, and Xi’an—were selected to carry out the pilot program (hereinafter referred to as the “4+7 cities”).

This month, the “4+7” volume-based procurement pilot entered the implementation phase. As national and local authorities intensively rolled out measures to drive down drug prices, domestic and foreign pharmaceutical companies have also joined the price adjustment race to compete for market share, with some companies slashing their product prices by more than 70%.

On March 5, the National Healthcare Security Administration publicly released the “Opinions of the National Healthcare Security Administration on Supporting Medical Insurance Measures for the Pilot Program of Centralized Drug Procurement and Use Organized at the National Level,” adjusting the medical insurance payment standards for drugs not selected in the “4+7” volume-based procurement pilot.

According to the “Opinions,” for non-selected drugs whose prices at the end of 2018 were more than twice the selected drug prices, the payment standard in 2019 shall be set at no less than a 30% reduction from the original prices, and adjusted to use the selected drug prices as the payment standard in 2020 or 2021.

For non-selected drugs whose prices at the end of 2018 were within the range of the selected price to twice the selected price (inclusive), the selected price shall, in principle, serve as the payment standard.

Furthermore, for generic drugs under the same generic name that have not passed the consistency evaluation, no transition period shall be granted; the 2019 payment standard shall not exceed the price of the selected drug.

Pharmaceutical Companies Will Face Increased Pressure to Reduce Product Prices

From the perspective of specific cities, procurement platforms in Shanghai, Tianjin, Beijing, and other regions involved in the “4+7” volume-based procurement pilot have already issued price reduction requirements for non-selected drugs.

Although only 25 drugs were selected in the first batch of pilot programs, industry observers believe that with the adjustment of medical insurance payment standards, pharmaceutical companies will face increasing pressure to reduce product prices in order to align with trends and compete for market share.

Recently, the Shanghai Sunshine Pharmaceutical Procurement Network also issued a work notice regarding matters such as the “full implementation of public price negotiation and procurement for listed drugs.”

According to the document, starting from March 7, 2019, a total of 819 varieties began comprehensive price negotiations in Shanghai. The reference standards for negotiation were the original winning bid prices of related products and the procurement prices from fifteen provinces and cities.

Furthermore, Guangxi has recently announced the latest batch of negotiated reference prices for generic drug products that are consistent in quality and efficacy with their originator counterparts.

In accordance with regulations, generic drugs that have passed the consistency evaluation can be directly listed for procurement in Guangxi. However, enterprises are required to voluntarily report the winning bid prices from the five provinces with the lowest prices nationwide for the relevant products, which will serve as the reference standard for price negotiations.

Prices of Some High-Cost Anticancer Drugs Reduced by Over 70%

On the one hand, a series of intensive actions have been taken at both national and local levels. On the other hand, pharmaceutical companies have successively lowered drug prices to secure their survival space.

Among these, the prices of some high-cost anticancer drugs have been reduced by more than 70%. Meanwhile, competition between domestically produced generic drugs and imported original research drugs has become more intense.

According to the previously announced results of the centralized procurement in the “4+7” pilot regions, 25 drug varieties were selected, with an average price reduction of 52% and a maximum reduction of 96%.

Among the winning bid drugs, AstraZeneca's original anticancer drug Gefitinib tablets saw a 76% price reduction. The company had previously stated that this price was the lowest globally.

“4+7” Volume-Based Procurement Triggers a “Chain Reaction” of Price Cuts Among Pharmaceutical Companies

The “4+7” volume-based procurement has also triggered a “chain reaction” of price reductions among pharmaceutical companies.

On March 5, the Shanghai Sunshine Pharmaceutical Procurement Network issued the “Notice on Price Adjustments for Certain High-Priced Contract Drugs in This Municipality under the National Centralized Drug Procurement Program,” leading to price reductions for multiple non-selected drugs covered by medical insurance under the “4+7” pilot program.

Among them, the price of Novartis’s original anticancer drug imatinib mesylate (Gleevec) has dropped to 7,182 yuan per box.

Qilu Pharmaceutical (Hainan) Co., Ltd. has reduced the price of its gefitinib tablets, which have passed the consistency evaluation, to RMB 498 per box. Notably, this price is nearly 9% lower than the contracted procurement price of AstraZeneca's gefitinib tablets (RMB 547 per box).

In addition, Chia Tai Tianqing and CSPC Ouyi Group have also reduced the prices of their imatinib mesylate products that have not yet passed the consistency evaluation to varying degrees.

In addition to Shanghai, the Guangxi Zhuang Autonomous Region’s Centralized Drug and Medical Device Procurement Network recently announced notifications of voluntary price reductions by certain pharmaceutical companies. Among them, Beijing Boente Pharmaceutical Co., Ltd. reduced its quoted price for Leuprolide Acetate for Injection (Sustained-Release Microspheres) from RMB 1,824 to RMB 1,291.95.

Qilu Pharmaceutical Co., Ltd.’s 1.0 mg bortezomib for injection (generic drug) had an original procurement price of RMB 1,598, with an adjusted quoted price of RMB 1,558; the 3.5 mg bortezomib for injection had an original procurement price of RMB 4,180, with an adjusted quoted price of RMB 3,990. This medication is also a domestically produced targeted therapy for multiple myeloma that was launched only last year.

In addition, Beijing SL Pharmaceutical voluntarily applied to reduce the supply price of its drugs in Guangxi. As a generic version of a negotiated drug, the 10mg specification of lenalidomide capsules (an antineoplastic agent) had an original procurement price of RMB 22,400 per box, which was adjusted to RMB 5,350, representing a significant reduction of 76%.

It is widely believed that the recent intensive statements and actions by authorities will undoubtedly accelerate the process of reducing drug prices, eliminate excessive markups, guide pharmaceutical companies onto a path of improving quality while lowering prices, and ultimately benefit patients.

News Link: New Round of Adjustments to the National Reimbursement Drug List Launched, with Priority Given to Adding Anti-Cancer Drugs and Other Medicines

On March 13, the National Healthcare Security Administration released the “Work Plan for Adjusting the National Reimbursement Drug List in 2019 (Draft for Comment),” which proposes to appropriately expand the scope of the list based on the fund’s payment capacity, optimize the drug structure, further enhance the level of basic medical insurance coverage for drugs, and alleviate the difficulties and high costs associated with medication access.

This adjustment is based on the information of drugs approved and marketed by the National Medical Products Administration, scientifically and systematically reviewed and determined by experts in accordance with established procedures, with extensive input gathered from all relevant stakeholders.

Catalogue adjustments will fully leverage the respective advantages of Western medicines and Traditional Chinese Medicine (TCM), taking into comprehensive consideration the quantitative structure and growth rates of both Western medicines and proprietary Chinese medicines.

According to the draft for comments, Western medicines and proprietary Chinese medicines to be added shall be those registered and marketed by the National Medical Products Administration on or before December 31, 2018. Priority shall be given to drugs included in the National Essential Medicines List, drugs for the treatment of major diseases such as cancer and rare diseases, drugs for chronic diseases, pediatric drugs, and emergency and rescue drugs.

Inclusion in the drug list is categorized into two approaches: routine inclusion and negotiated inclusion. Provided that efficacy, safety, and other prerequisites are met, drugs whose price (cost) is comparable to or lower than that of existing agents in the drug list may be included through the routine approach. Patented, exclusive drugs with higher prices or a substantial impact on the medical insurance fund shall be included through negotiation.

Chinese herbal decoction pieces are managed under an access approval system, with national-level adjustments limited to those processed in accordance with national drug standards.

The draft for comments proposed that the new edition of the Drug Catalogue would be issued in June 2019, along with the publication of the list of drugs intended for negotiation. Drugs successfully negotiated in August would be included in the Drug Catalogue, with management and implementation requirements clarified simultaneously.