The Impact of Price Negotiation on the Pricing of Innovative Drugs in China

Speaker(s)

Li W1, Chen J2, Nie X3, Huang Y4, Shi L3, Han S5, He Y3
1School of Pharmaceutical Sciences, Peking University, beijing, China, 2Department of Pharmacy Administration and Clinical Pharmacy School of Pharmaceutical Sciences, Peking University, Beijing, China, 3School of Pharmaceutical Sciences, Peking University, Beijing, China, 4School of Public Health, Peking University, Haidian District, Beijing, China, 5Peking University, Beijing, China

Presentation Documents

OBJECTIVES: The Payer (National Healthcare Security Administration, NHSA) has initiated national price negotiation since 2016 to lower the price and expand access to high-price innovative drugs. The primary objective of this paper is to analyze the price trends and determinants of innovative drugs in China.

METHODS: We identified drugs newly marketed from 2013 to 2021 from Multi-source Database. Data on price between 2017Q1 and 2022Q1 were collected from CMH, a database with quarterly hospital drugs sales. A total of 265 innovative drugs were divided into two groups for the analysis: negotiated and non-negotiated drugs. Drug prices were expressed as Defined Daily Dose cost (DDDc). Multiple regression models were used to investigate the determinants of the price.

RESULTS: Among the 265 new drugs, 122 have already been included in negotiations. The mean DDDc of innovative drugs rose by 154.40 %. The proportion of drugs priced at 10000 RMB per day or more increased from 0 % to 4.5 %. Prices were decreased by 54.3 % and increased by 535.1% on average for negotiated and non-negotiated drugs respectively. There were no drugs priced over 10000 RMB in sub-group of negotiated but 9.8 % in non-negotiated drugs. A statistically significant determinant associated to price reduction was the negotiation(p=0.000). Orphan drug prices were significantly higher than non-orphan drugs in the negotiated group, this pattern that did not exist in the non-negotiated group.

CONCLUSIONS: The proportion of high-cost medications approved for launch in China has been on the rise. Negotiations have been instrumental in achieving price reductions. The correlation between the price and value of innovative drugs has been improved through drug price negotiations.

Code

HPR100

Topic

Health Policy & Regulatory

Topic Subcategory

Health Disparities & Equity, Pricing Policy & Schemes, Public Spending & National Health Expenditures, Reimbursement & Access Policy

Disease

Drugs, No Additional Disease & Conditions/Specialized Treatment Areas