(Bloomberg) -- China is pushing ahead with a campaign to slash generic drug prices that has wiped out $46 billion in value from pharmaceutical companies since it was launched earlier this month.
The government will expand a central procurement program to more regions and more drugs, Vice Premier Sun Chunlan said at a meeting of the National People's Congress standing committee, according to China Business News. The initiative was first launched Dec. 6 with 11 major cities and 31 drugs.
The pilot drove prices down for medications from cholesterol to cancer treatments by an average of about 52 percent, and in some cases by more than 90 percent, as drugmakers competed against one another to win the tenders that would supply all public hospitals in those cities.
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Both domestic and foreign drugmakers have objected to the new policy, arguing that it would cause potential quality and supply issues. Since the pilot, the MSCI China Healthcare Index has lost 22 percent, erasing a total of $45.8 billion in market value.
Sun said in the meeting that China was “staunch and unmovable” in continuing with the new policy and resolving quality, supply and industry consolidation issues. The National Medical Products Administration said Thursday that China should strengthen oversight on quality of drugs that win bids, and step up punishment of companies that violate rules on production and distribution.
China's drug prices are higher than most neighboring countries and must fall for health care to become affordable, Sun said.
To contact Bloomberg News staff for this story: Rachel Chang in Shanghai at wchang98@bloomberg.net
To contact the editors responsible for this story: K. Oanh Ha at oha3@bloomberg.net, Jeff Sutherland, Charlie Zhu
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