Tuesday, 24 December 2013

Medicine prices to be cut in 2014

Nearly 2,600 Chinese patent medicine suppliers have to lower their selling prices within the next 50 days due to new government regulations, leading to concerns within the industry which has shown an annual output value of 510 billion yuan (US$83.9 billion), reports Guangzhou's 21st Century Business Herald.
The market was abuzz recently with the news that the price adjustment regulated by the government will soon be finalized in the near future. The price decline will be more than 10%-5%, said a source, adding that products that need to drop by over 25% can slowly lower their prices over a two-year period.
The National Development and Reform Commission (NDRC) has investigated price adjustments for Chinese patent medicines for almost a year. The commission hosted several meetings with medicine- and healthcare-related organizations to discuss the prices of these herbal medicines.
The investigations on cost, capacity, and market research were completed in late July this year, and the results were submitted to the related government agencies two months ago.
However, pharmaceutical companies voiced their discontent over the price adjustment as the new measure will slash their profits. A research institute estimated that the output value of Chinese patent medicine will reach 517 billion yuan (US$85.1 billion) this year, up by 21.6% year-on-year.
A market observer told the paper that Chinese patent medicine suppliers have put pressure on the NDRC due to the surging cost of Chinese herbal medicine. The suppliers noted that 200 of the most frequently used medicine had gone up in price by 27.7% over the past six years.
In addition, these companies will face obstacles in overseas markets as countries such as the United Kingdom requires Chinese patent medicines to be registered under a license before they can be offered in the market. At present, none of the 200 Chinese patent medicines sold in the United Kingdom have successfully completed registration, indicating that all these products will have to be pulled off shelves in May next year, in accordance with the country's regulations.
Source: China Economic Net

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