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China to slash drug prices by 19%

(Agencies)
Updated: 2010-12-01 09:34

China is to cut the retail price of many medicines by an average of 19 percent from Dec 12 in a bid to rein in the country's rising healthcare bill, Reuters reported, citing the Chinese National Development and Reform Commission.

The move is the latest sign of governments around the world acting to force down drug prices and is likely to be a concern to Western companies that have been looking to China to drive sales growth as demand in home markets flags.

The Chinese plan is designed to save at least 2 billion yuan ($300 million) a year on healthcare costs, according a statement on the commission's website.

Related readings:  Healthcare coverage to expand across the country  Healthcare provider seeks to grow bigger  China cuts prices of 17 medicines as production costs fall  Prices of basic drugs slashed 12%

Prices for some individual drugs will fall a lot more than 19 percent, with Bristol-Myers Squibb's heart medicine Capoten set to come down by 35 percent and Roche's antibiotic Rocephin by 30 percent.

Pharmaceutical market information company IMS Health told the Reuters Health Summit earlier this month that China was set to overtake Japan as the world's second-biggest pharmaceuticals market after the United States in 2015.

China, which has been predicted by IMS to see drug sales increase 25-27 percent to more than $50 billion next year, is currently the world's third-largest pharmaceutical market.

As sales growth in Europe, the United States and Japan stalls and many blockbusters lose patent protection, new markets -- particularly in Asia and Latin America -- are being targeted by makers of both prescription and over-the-counter drugs.