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Drug prices negotiated downward

Hou Liqiang
Updated: Jul 20,2017 8:50 AM     China Daily

The prices of 36 expensive drugs-half of them for cancer treatment-are now covered by medical insurance, after the authorities negotiated substantial price reductions.

The Ministry of Human Resources and Social Security negotiated with pharmaceutical manufacturers on 44 drugs and managed to cut prices of 36 of them to be acceptable for coverage by the medical insurance fund, Xu Yanjun, a fund management official at the ministry, said at a news conference on July 19.

Compared with retail prices last year, prices of these drugs have decreased by 44 percent on average, he said. Five of the drugs are traditional Chinese medicines and 22 are imported Western medicines.

Half the drugs, including 15 Western ones, are used to treat six types of cancer, including breast, lung and liver cancer. For example, the price of 440-milliliter trastuzumab, which is used to treat breast cancer, went down by 69 percent to 7,600 yuan ($1,125), said Yan Qinghui, the ministry’s deputy director of medical insurance.

He said the government chose the 44 drugs for negotiation after it found the medical fund couldn’t afford them, even though they are greatly needed by the public due to their curative effects. They may be patented or produced exclusively by certain pharmaceutical companies.

“We hoped we could make full use of the advantages of the fund’s group purchasing to include more drugs in the medical insurance directory,” Yan said.

Prices of the drugs may be adjusted further when the contracts between the government and the manufacturers expire at the end of 2019, but they will also be subject to change if new medicines cause changes in exclusivity, he said.

Xu said two independent teams comprising experts with clinical, pharmaceutical, economic and medical insurance expertise evaluated the medicines, along with the medical insurance fund’s capacity, before prices were set.

He added that the whole negotiation process, which took place on June 16, was videotaped for supervision checks.

Chen Wen, deputy director of Fudan University’s Institute of Hospital Management Research in Shanghai, said, “It’s a great innovation to bring a negotiation mechanism to the revision of the medical insurance directory this year.

“It’s beyond doubt that price negotiations will play a bigger role in medical insurance.”

The ministry’s negotiations for the 44 drugs laid a good foundation for the establishment of a more regulated and complete negotiation mechanism, he added.

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