OBJECTIVES:

In China, while National Reimbursement Drug List (NRDL) inclusion is considered the best pathway to maximize originator’s market uptake, a “price for volume” strategy for considerable price cuts is common. Additionally, upon generic entry, originators may face further price cuts through volume-based procurement (VBP). The considerable price cuts and yearly rule changes have made understanding potential pricing outcomes in China a challenge. Therefore, this study aimed to determine the current important pricing checkpoints in China.

METHODS:

Secondary research of publicly available policy documents within National Healthcare Security Administration (NHSA) official website on NRDL and national VBP were explored. Interviews were undertaken with payers/advisors to validate findings.

RESULTS:

The processes and average price cuts of the three pricing checkpoints were identified.

The first checkpoint is the initial NRDL listing, involving two pathways. For originators with exclusivity, the additional value compared to its designated comparator is vital for pricing and has resulted in an average price cut of over 50% in the past five years. For originators with generics in the market, intensified competition strongly affects pricing. Winning in a bidding model is required to be included for NRDL; a final winning price will not exceed payer’s preferred ceiling price.

The second checkpoint is contract renewal for NRDL listed products. Originator exclusivity status, changes in competitive landscape and the budget impact are payers’ key considerations for additional discounts.

Further price cuts of approximately 50% can be initiated at the third checkpoint through VBP. NRDL listed originators with two generics in market may be selected by NHSA for the process.

CONCLUSIONS:

The three pricing checkpoints can give considerable price cuts, particularly upon generic entry. However, as rules change yearly, the processes and potential pricing outcomes should be continuously researched to ensure a successful pricing management throughout originators’ lifecycle in China.