Patented Western drug prices slashed by Chinese Government

In a move to make medicine accessible to more people, the Chinese Government has reached agreements with dozens of top drugs from multinationals such as AstraZeneca, GSK, and Roche to slash drug prices. This week, Pacific Prime China discusses just how big of a change this might be, and what it will mean for people living in China. 

The new cost of medication in China

As the second-largest market for medication, China is set to take advantage of significant discounts to some of the pharmaceutical industry’s most expensive and specialized medication. Multinational pharmaceutical companies have cut the price of some of their drugs by as much as 70% in order to make them eligible for co-payment under the Chinese Government’s National Reimbursement Drugs List.

Drug prices have been on the government’s to-do list since as early as 2014, where it indicated it was preparing to increase the level of funding it provided for public healthcare. 45 expensive medicines were already added to the NRDL in February this year, and included significant cost savings such as:

• GSK’s hepatitis drug Viread fell from RMB 1,500 to 490 a month
• AstraZeneca’s lung cancer pill Iressa reduced from RMB 15,000 to 7,000 a month
• Local Chinese company Betta Pharmaceuticals’ lung cancer drug Icotinib dropped from RMB 12,000 to 5,500 a month

With medication like Bayer’s liver and kidney cancer treatment Sorafenib set to join the NRDL, people across China with serious illnesses will be able to access some of the world’s top drugs for less than they would cost in neighbouring countries.

Benefitting from China’s new drug prices

The ones who stand to gain the most from the new medication costs are local Chinese citizens. As they’re eligible for the Chinese Government’s social security support, the lower drug prices mean purchasing these NRDL drugs using their individual social security fund won’t cost them as much as it might have when pharmaceutical companies charged full price. This is great news for citizens of lower incomes who can now get the government co-pay for drugs previously well out of their price range.

Foreigners and expatriates, who are excluded from accessing national social security, still benefit from the reduction of drug prices by the government and pharmaceutical companies. Obviously, there’s no co-payment to help pay for the reduced costs but, as seen above, the price drops are still considerable, and make medication market in China extremely competitive with costs seen elsewhere. Granted, a year long course of Iressa will still cost RMB 84,000, so it’s still worth securing private health insurance to provide financial support should you need it.

Do health insurance plans cover the cost of medication?

The answer is both yes and no. Illnesses such as cancer will generally have a separate benefit schedule to things like inpatient or outpatient care, meaning any cancer-related drugs prescribed to you will likely be covered under that part of your policy. The same goes for any medications required due to an inpatient visit, for example if you break your leg or are admitted with gastroenteritis.

What you need to be aware of is that policies differ on how much and how long they’ll cover drugs for. This is where it pays to have read and understood your insurance policy in full. Some plans may have an approved drug list called a “formulary”, meaning they only pay for certain types or brands of drugs, whilst others may have a limit on how much they’ll pay for medication. Each plan is different, so make sure you know what yours covers.

What if my health coverage isn’t adequate enough?

Maybe you have an existing private health insurance plan, maybe your employer has provided you with one as part of your employment package. Perhaps you don’t even have health insurance at all. One of the worst situations you can find yourself in when faced with dealing with a medical illness is not being financially prepared for the cost of treatment, and not having adequate health insurance coverage.

At Pacific Prime China, we’re experts at matching robust insurance coverage with your personal health needs. We can negotiate better benefits and limits at great prices for new and existing clients, provide comprehensive top-up plans for those looking to boost their employer-provided insurance, and we can even find coverage for your family, small business, or large professional service firm. Our point of difference as a broker? We’ll stay and support you throughout the life of your policy too, helping out with claims and at renewal time.

Find out why we’re one of Asia’s leading insurance brokers. For a free quote or some friendly, expert advice, contact the team at Pacific Prime China today.

Disclaimer: Pacific Prime China solely represents, operates and manages locally regulated insurance products and services in the territory of PR China. Any references to Pacific Prime Global Company or Group, the international services, insurance products or otherwise stated written or verbally, is for introduction purposes about our overseas network only as each entity is fully independent.