Drugs firms make massive discounts to get reimbursement in China

Roche and Novartis are among the pharmaceuticals companies who have agreed to cut prices of some of their newest drugs by 61% on average to get them reimbursed in China, according to a report.

Reuters reported that the big pharma companies have had to make swinging price cuts to get on a national reimbursement list in China, which is gaining status as one of the most important markets for drug makers in the world.

While Chinese authorities have taken steps to improve the efficiency of its regulator, the National Medical Products Administration (NMPA), it looks as if drug firms must be prepared to discount heavily compared with US prices to get them funded by the country’s developing health system.

However if companies are prepared to boost their sales by volume, China looks like an attractive market.

According to Reuters, 70 new drugs including’s Roche’s Perjeta (pertuzumab), and Novartis’ Xolair (omalizumab) will be added to a list of reimbursed drugs curated by the National Healthcare Security Administration.

This will allow patients in China to use their state medical insurance to cover a significant portion of the cost of drugs named on the list.

The NHSA reportedly said that imported drugs on the updated list had the “lowest prices globally”.

Tumour and diabetes drugs saw an average price cut of around 65%, according to the NHSA.

Also included on the list is Tyvyt (sintiliumab), an anti-PD-1 cancer immunotherapy that has been developed by China’s Innovent and Eli Lilly.

The drug is not available in Western markets, but was approved by the NMPA early this year for classical Hodgkin’s lymphoma (cHL), or relapsed and refractory cHL.

However the two biggest-selling PD-1 drugs – Merck & Co’s Keytruda (pembrolizumab) and Bristol-Myers Squibb’s Opdivo (nivolumab) -  are missing from the list.

Analysts have suggested that Eli Lilly and Innovent could have a competitive advantage over rival immunotherapies because of this head start with reimbursement.

"Just getting a foot in the door might already be a big step for them,” UBS analyst Michael Leuchten told Reuters.