China launches probe into drug pricing
- 5 July 2013
- From the section Business
China has launched a wide-ranging investigation into the cost of medicines, probing as many as 60 domestic and international drugmakers.
It comes just days after it started a probe into price fixing of infant milk by foreign companies - a move which has already spurred price cuts.
Foreign firms affected by the latest investigation include GlaxoSmithKline, Merck, Astellas and Baxter Healthcare.
Analysts said authorities were keen to make healthcare more affordable.
"It's not surprising there's pressure on these two industries," said Ben Cavender of China Market Research Group in Shanghai.
He explained that the Chinese consumers' trust in domestically made products in these segments is very low, amid concerns about safety and counterfeit products.
"That's driving consumers to spend extra to buy foreign products," he added.
He said that given the higher prices of foreign products it has become "a social issue" amid concerns that those who can not afford to pay extra don't have access to safer products.
The National Development and Reform Commission (NDRC) said that it would look into the costs and pricing of the companies, so that drug prices can be adjusted in a timely manner.
China, the world's most populous nation, has become increasingly important for pharmaceutical companies seeking growth.
And as the country's population ages, demand for medicines is expected to grow further in the coming years.
According to some estimates, China is likely to overtake Japan as the world's second biggest drug market after the US in the next two to three years.