OBJECTIVES

Evaluate the 2019 NRDL negotiation outcomes as indicators of the strategic approaches taken by multinational and domestic manufacturers to achieve NRDL listing, assessing the NRDL update as a case study in price-access tradeoffs for the industry.

METHODS

A review of published NRDL results together with secondary research on the competitive landscape for newly listed products in hepatitis C and rheumatoid arthritis was conducted.

RESULTS

China’s 2019 NRDL update resulted in the successful Category B listing of 52 non-Chinese patent medicines: 36 manufactured by multinationals and 16 by domestic companies. Final negotiated prices reflected an average discount of 60.7% from list prices—the largest average reduction from an NRDL update to date. Moreover, 49 other drugs under Category B listing failed the negotiations, likely due to the large price cuts demanded by the National Healthcare Security Administration (NHSA).

For innovative medicines with comparable clinical benefits, the tender-like negotiation model intensified competition and formed a steep price cliff. Hepatitis C was one example, where 4 manufacturers competed for coverage of their direct-acting antivirals. Merck’s elbasvir / grazoprevir and Gilead’s ledipasvir / sofosbuvir and sofosbuvir / velpatasvir were listed after negotiating the lowest two full-course costs with an average price cut of 85%, over AbbVie’s glecaprevir / pibrentasvir and Ascletis Pharma’s danoprevir.

In rheumatoid arthritis (RA), golimumab and tocilizumab opted for routine update with voluntary price cuts comparable to previously NRDL-listed RA drugs, while adalimumab, infliximab, and tofacitinib opted for negotiations. Peer discount pressure, competition from Chinese domestic manufacturers, and biosimilar threat in the future are the likely key rationale behind the manufacturer strategies employed in the RA space.

CONCLUSIONS

The 2019 NRDL update signaled an opportunity for expanded access, given manufacturers’ willingness to tailor pricing strategy to maximize the public reimbursement in China.