Updated on 14 May 2013
In late 2012, the National Development and Reform Commission (NDRC) of China announced a new price cut policy for pharmaceuticals, effective from February 1, 2013
The investments pouring in China are aligned with the government's plan to boost the pharmaceutical industry of the country in its 12th Five Year Plan (2011-15), which was announced in 2011. The plan is focused on encouraging pharmaceutical companies to consolidate domestically and build market share and technologies to strengthen the business.
To achieve significant growth, China needs investments to possess cutting-edge technologies and skills to operate them. The plan is encouraging private capital firms to invest in healthcare services. Furthermore, in the domain of medicine manufacturing, KPMG (in its 2012-13 review of China) pointed out that the country will receive boost from the government in terms of not only funding support, but also changes in policies, tax and R&D incentives.
During March 2013, the government announced that it will step-up investment in the prevention and treatment of chronic diseases as well as expand the reimbursement medical system with more medicines added to the essential drugs list. China has projected an increase in its medical spending by 27 percent and is doubling the total number of drugs in its national reimbursement medicine list from 205-to-520. The country's medical insurance system will cover an additional 20 serious illnesses, including various types of cancers, leukemia and type-1 diabetes among others.
New price cut policy
In late 2012, the National Development and Reform Commission (NDRC) of China announced a new price cut policy for pharmaceuticals, effective from February 1, 2013. This price cut policy involved 20 categories of pharmaceuticals, including 400 separate medicines in over 700 formulations, mainly for respiratory disorders, pain and fever. The maximum prices of these medicines were to be cut by an average of 20 percent, which poses a great challenge to multinationals in the China market.