A Wave of Fresh Price Cuts Hits China’s Generic Drugs Scene
COVID-19 and China
The Chinese regulatory body has been pushing down the generic drugs' prices since March 2019. Image: Credit to Pixabay

Jiangsu Public Resource Trading Platform -a regulatory bureau responsible for the public biddings- issued a statement on September 4th, adjusting the prices of 10 new generic medicines. The adjustment marked yet another major price cut by the Chinese regulators following the "4+7" reform, a rule issued by the National Medical Products Administration (NMPA) at the end of 2018 which changed the rules of the game in China’s biopharmaceutical industry.

The term 4+7 refers to the 11 cities that the pilot program has been initiated in, was set to stimulate the decentralized tender system for the generic drugs by awarding the contract to the lowest bidder – i.e., the pharmaceutical manufacturers with the lowest bidding prices get the rights of distribution of selected medicines in these 11 Chinese cities. The list includes, among others, Beijing, Shanghai, Shenzhen and Guangzhou.

Since its inception, the bulk-buy policy has caused a freefall of up to 90% for some of these medicines’ prices, creating a panicked atmosphere in the markets. What’s more, The Chinese pharmaceutical industry is on the brink of another price cut wave, according to, the sister publication of EqualOcean.

The new regulatory landscape has also affected multinational companies, mostly positively. The number of foreign drug applications submitted in China from 2016 to 2017 surged threefold from 13 to 37, reported Pharmaceutical Technology. In 2018, NMPA upgraded another policy, accepting overseas clinical trial data for applications in the mainland.

The new policy would even affect online pharmacies in the sense that they need to negotiate more with novel drug producers, of which a significant number are foreign enterprises. Tiger Global backed Chinese B2B pharmaceutical trading platform Yaoshibang (药师帮) represents one of those companies that would presumably update its marketing approach in the near future. 

As NMPA continuously ramps up its efforts to push down generic medicine prices, China’s biopharma field will bring about new paradigms, urging generic drug producers to upgrade their operating models, leaning towards producing more novel drugs. In future, China may create its own competitive novel drug developers.

Beijing-based Jacobio (加科思), and I-Mab Biopharma (天境生物), a biotech startup from Shanghai that was said to go public soon, are the examples of China’s prospective novel drug developers in the near future. 

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