OBJECTIVES: Chinese drug pricing reform initiated on 1^stJune 2015 aims to create incentives for efficient management of drug reimbursement budget. This study aimed to assess the potential impact of the reform from the societal perspective. METHODS: We conducted a thorough research on the drug pricing reform using three Chinese databases (CNKI, Wanfang, Weipu), Chinese health authorities’ websites, relevant press releases, pharmaceutical blogs and discussion forums. This research was complemented with targeted interviews with Chinese key opinion leaders representing authorities’ and prescribers’ perspectives.  RESULTS: The reform may include introduction of internal reference pricing (IRP) for drugs with the same active ingredient and dosage form. Therapeutic interchangeability of drugs is an important issue in China. Interviewed opinion leaders consistently agree that there are discrepancies in terms of quality between imported drugs and some locally produced generics. Introduction of IRP may promote the use of cheaper generics with questionable quality. Increased use of low-quality drugs may affect patients’ safety and treatment outcomes, and in turn lead to undesired increase of expenditures in other healthcare sectors. It could also increase inequity between different income groups if, as a result of increased co-payment, only the wealthiest could afford high-quality drugs. Additionally, the reform should not be implemented in isolation. Creating effective incentives for cost-containment without affecting healthcare quality requires global, rather than ‘micro-level’ focus. With hospitals being the main distributor of out-patient drugs in China and economically depending on profit generated from drugs sales, pricing reform should be comprehensive and address restructuring of hospitals’ financing and management system. CONCLUSIONS: Before introducing the reform on a big scale, all local specificities and challenges should be properly addressed, e.g. the issue of poor-quality drugs. International reference pricing policies cannot be transferred to China without being adjusted for local context. To be successful, the reform requires a comprehensive approach.