Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Drugmakers slash prices to be eligible for China's bulk-buy program

Stock MarketsJan 18, 2020 02:56AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

BEIJING (Reuters) - Global pharmaceutical majors and generic drugmakers chopped by 53% on average prices of some of their off-patent products in the latest bidding round under China's national bulk-buy program, government officials said late on Friday.

Beijing has been pushing forward the program where drugmakers have to go through a bidding process and cut prices low enough to be considered over generic copies and be allowed to sell their products at public hospitals via large-volume government procurement.

Some global firms such as AstraZeneca (L:AZN) and Merck (N:MRK) have already cautioned about intensifying price pressures on their mature brands in the world's second largest drug market, as China expands the usage of the program.

In the latest bidding on Friday that involved 33 drugs and 122 companies, Bayer (DE:BAYGn) slashed the price of its popular diabetes treatment Acarbose to 0.18 yuan ($0.0262) per pill, 78.5% lower than the price ceiling set by the government in December last year, elbowing some Chinese generic providers out of the tender, according to a Reuters calculation based on the preliminary results released by the authority overseeing the program.

Bayer was not immediately available for a comment.

"Products that won bids in this round of centralized procurement saw a huge price drop, which squeezes out unreasonable overpricing that has existed in drug distribution for a long time," the authority said in a statement published alongside the preliminary result on Friday.

Sale prices of over 100 types of commonly used drugs are on average about 17 to 18 times of their manufacturing costs, the statement said.

Chinese copycats won bids for most of the 33 drugs, including generic versions for drugs ranging from Johnson & Johnson's (N:JNJ) prostate cancer treatment Zytiga to Eli Lilly's (N:LLY) erectile dysfunction treatment Cialis, the results showed.

In Friday's bidding, for products with two bid winners, 60% of the government procurement volume can be shared among the winners, according to official document detailing the tender rules released in December. For products with four winners and more, as much as 80% of the volume can be shared among the companies.

In the first round of the nationwide implementation of the bulk-buy program in September, global drugmakers including Sanofi (PA:SASY) and Eli Lilly managed to cut some prices low enough to levels close to those offered by local generic makers.

Drugmakers slash prices to be eligible for China's bulk-buy program
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Me comment
Me comment Jan 18, 2020 8:52AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sounds like something the US needs to start doing.
Jan Buyle
Jan Buyle Jan 18, 2020 4:56AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
That gives us an idea of how over priced medical drugs are...
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email