Updated on 14 May 2013
Similar to the last round of price cuts in October 2012, expensive and independently priced drugs from multinationals were worst hit. For example, Plaquenil (hydroxychloroquine) for arthritis from Sanofi-Aventis will have a new price of $8.90 (RMB 56.80) per box, a slash of 13 percent.
AstraZeneca's Diprivan (propofol injection) meanwhile will see its price slashed to $14.40 (RMB 88.80) per bottle, a 32 percent cut from its current price of $21.09 (RMB 130). Other affected drugs from multinationals include Novartis' Lioresal (baclofen) with a 10 percent cut, Eli Lilly's Humalog (insulin lispro) with 13 percent cut, and Takeda's lornoxicam with a 15 percent cut. However, only three Chinese companies will likely be affected, including Chengdu-based Hexin Pharma, Guangzhou-based Baiyun Pharmaceutical and Taizhou-based Yangtze River Pharmaceutical. The commission has also decided to revoke independent pricing policies for seven drugs from them.
China's economic growth has lost some momentum, its GDP expanded 7.7 percent in the first quarter, missing the 7.9 percent benchmark of the previous quarter, a sobering reality that global recovery is slowing. Additionally, the World Bank cut its forecast for China's growth in year 2013 to 8.3 percent from 8.4 percent.
Marks & Clerk 2013 life sciences report reveals that the general industry feeling is that China is rapidly becoming a key global R&D center in addition to its current manufacturing hub positioning. This is evident from the fact that several MNCs invested substantially in China during 2012 and continue to do so in 2013 as well. For example. Merck and Novartis alone invested a total sum of $3.75 billion in China over the last five years, often partnering with regional or state-run Chinese companies in the process.
Furthermore, within a span of 60 days, (during November and December 2012) biopharmaceutical companies belonging to the domains of manufacturing, drug discovery and clinical services, showed pertinent interest in expanding their presence in China. In November 2012, US-based Thermo Fisher Scientific opened its new manufacturing facility in Suzhou for sciences consumables and equipment. The company has invested nearly $20 million in a 12,000 square meter Suzhou plant, which would employ around 150 employees.