Anti-cancer Drugs: Prices not Reduced as Taxes Reduced, Out of Stock once Prices Reduced

Premier Li Keqiang has recently chaired an executive meeting of the State Council of China, which determined measures of "accelerating the approval of new drugs that have been marketed overseas, implementing the price reduction measures for anti-cancer drugs, and strengthening supply guarantee of drugs in short supply" to target the strange phenomenon of "prices not reduced as taxes reduced, out of stock once prices reduced". According to many insiders, prices of anti-cancer drugs may really drop with the implementation of those three measures.

Earlier this year, the Premier has mentioned the "zero tariff" issue of anti-cancer drugs on many important occasions (including the National People's Congress and State Council meeting), of which the starting point is to reduce prices of many "life-saving drugs" against cancers, to benefit the numerous cancer patients who are not sufficiently treated due to financial issues. However, according to data, prices of cancer drugs have not been successfully reduced since "zero tariff" came into force on May 1 this year, and the original intention of the policy has not been quickly achieved.

In the meantime, the strange phenomenon of short supply of the important "life-saving drug" Herceptin has occurred on the Chinese market, injecting many destabilizing factors to the drug market. But according to an expert, those "strange phenomena" in fact make sense, mainly for the following reasons:

1. Policy level: China has successively introduced many policies targeting drug prices in recent years, such as "drug price negotiation system", and prices of many drugs largely drop after the relevant negotiations, which, to some extent, promotes the market demand for the corresponding drugs. For example, Herceptin was included in the category B list of China’s national medical insurance drug catalog in July 2017, with the price of RMB 7,600/piece, down by nearly 70% than the original RMB 20,000/piece; plus the medical insurance reimbursement, patients only need to pay a little more than RMB 1,000/piece, resulting in the usage amount of the drug to soar, to cause the market shortage phenomenon;

2. Enterprise level: Price reduction reduces the profit margins of corresponding drugs, many pharmaceutical manufacturers will therefore be less motivated about the production thereof, and once they reduce the production, it will easily cause market shortage of corresponding drugs;

3. Hospital level: Drugs with lower prices also mean reduced profit margins to hospitals, which will lower motivation of many purchasers who are also profit-driven. It is because of the above factors that the shortage of many "life-saving drugs" happens from time to time. The cheap life-saving drug against leukemia: mercaptopurine, and the essential pharmaceutical product for heart disease surgeries: protamine, etc. have also frequently showed shortage, besides Herceptin.

Regarding those problems in urgent need for solution, the Premier pointed out in the executive meeting of the State Council of China on June 20, "Anti-cancer drugs are life-saving drugs and their prices must drop as taxes drop. It’s necessary to take multiple measures at the same time to get through the intermediate link and urge the price reduction of anti-cancer drugs, to enable people to have the sense of gaining." He also emphasized, "It is not only a matter that relates to key livelihood issues, but also important content of the ‘Decentralization-Control-Service’ Reform of pharmaceutical industry and other relevant industries. Departments should take this seriously and promptly implement the work, to enable more people to have early access to and afford those good drugs." To summarize, the main measures to implement next are "accelerating the approval of new drugs that have been marketed overseas, implementing the price reduction measures for anti-cancer drugs, and strengthening supply guarantee of drugs in short supply", which have received extensive market attention. People have highly praised the Premier’s decision to implement this policy for improving people’s livelihood.

The global situation of cancer treatment has been very severe in recent years. According to data, the global cancer cases have grown by 28% in the past decade. Cancer treatment has caused huge economic burdens to patients’ families, and even ruined those families. As such, "enabling people to have early access to and afford good drugs" is an important livelihood issue; the policies taken by China in recent years have achieved some effects in this regard, however, there is still great room for improvement; especially for a developing country like China where people’s average ability to pay is not high, the drug price reduction is crucial to the adequate treatment accessible by many patients!

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