China to reduce drug prices

New government-instituted price ceilings for cancer, immune and blood-system drugs in China will bring costs down by an average of 17%, The Wall Street Journal reported, citing information posted online by a government agency. The price cuts on 95 oncology, immune-system and blood-related drugs, as well as 200 formulations, will be implemented on October 8. Opinion differs on whether the cuts will harm or benefit pharmaceutical companies. Chinese oncology drug makers Jiangsu Hengrui Medicine (600276.SHA) and Sihuan Pharmaceutical Holdings Group (0460.HKG) may suffer slightly although some drug-makers could benefit from increased demand, an analyst said. China’s Ministry of Health plans to increase the number of subsidized drugs from 307 to 800 later this year. The cuts are part of a government strategy to revamp the national health service. Eighty-five out of every 100 deaths in China are now caused by chronic illness such as cancer, according to the ministry.