Drug price cuts
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Drug price cuts

Drug price cuts not yet felt everywhere

The Chinese government’s regulation that reduces the price of some self-developed medicines will not seriously affect international pharmaceutical companies, analysts say. Meanwhile foreign drugmakers are appealing for pricing policies that encourage research and development (R&D) instead of simply reducing prices.

On Monday, the day after the policy took effect, the price of related products in Guokangtang Pharmacy in northern Beijing had not yet fallen. “We are waiting for an announcement from the administration,” said a shop assistant.

“It will take time for the policy to reach the retail level, given our stocks,” said a supply manager at Anhua Hospital, a Beijing community clinic, under condition of anonymity.

But in the capital’s major hospitals prices dropped.

The National Development and Reform Commission (NDRC), the country’s top think tank, issued a statement at the end of last month announcing a cap on the retail prices of 174 self-developed medicines which started on Sunday. Of that total, 107 are produced by 40 foreign drugmakers, including Pfizer, Merck & Co, Eli Lilly, Novartis and Bayer.

Prices of the medicines, from antibiotics to cardiovascular products, will drop 19 percent on average. The retail price of Bristol-Myers Squibb’s Captopril, a high-blood-pressure treatment, has been slashed by 35 percent. Ceftriaxone, an injected antibiotic by Roche, has been cut by 30 percent.

The price reductions will have little effect on foreign drugmakers, given the 19 percent average rate, said Guo Fanli, a healthcare analyst with China Investment Consulting. A “self-developed” medicine is one developed by a pharmaceutical company on which the patent has expired. In China, these medicines are owned mainly by international pharmaceutical giants, and their prices were set by the producers.

“The maximum retail price policy, on the other hand, may facilitate these self-developed medicines being in the nation’s essential medicine system and help foreign pharmaceutical enterprises enter China’s grassroots market, including second- and third-tier cities as well as rural regions,” said Guo.

“The measure is to stabilize the cost of medicine,” said the NDRC, which estimated that the policy will help the public save 2 billion yuan annually.

Though analysts say the price-cutting will hardly affect international drugmakers, an industry lobby said: “These medicines (involved in price reduction) are companies’ branding products, thus the price-cutting will greatly affect the sales of these enterprises.”

The R&D-based Pharmaceutical Association Committee (RDPAC) under the China Association of Enterprises with Foreign Investment is a non-profit, non-governmental organization. It now has 38 member enterprises, all large R&D-based multinational companies.

It said that the manufacturers’ price of China’s generic drugs is about 22 percent to 30 percent of the international level, hence capping the price of self-developed medicine based on that of a generic drug in China will frustrate pharmaceutical companies’ enthusiasm for R&D and quality control. It will ultimately hinder healthy development of the industry.

Though RDPAC said it supports the NDRC’s price reform, it emphasized that price-setting should be achieved through a combination of government administration and market adjustment, and should be R&D-oriented.

“We will stick to our principle of providing safe and reliable products to our customers. Meanwhile, we believe that pairing high quality with high price is reasonable, and we guarantee safety and quality,” Stella Ling, communications director of Bristol-Myers Squibb China, told China Daily.

Research and Markets: Pharma Marketing in Latin America

Unified by geography, culture and language, Latin America nevertheless remains a marketing puzzle for the pharmaceutical industry.

Although the Internet is increasing in popularity, it is available only to the privileged few. Governments have health and drug programs in place, yet they are complicated and ineffective for remote communities. Drugs are widely prescribed, but for many, the cost is too high and they often do without. And while administrations support local industry, they typically favour generics over brands.

Amidst this backdrop, Latin America is booming. Boasting a market worth $30 billion in 2009 and a projected compound annual growth rate of more than 10 percent over the next seven years, the region is attracting big attention from leading firms.

And its not hard to see why. Shifting demographics as the over-65 population continues to explode offer ample opportunities for growth in drugs addressing age-related illness such as arthritis and Alzheimer s disease. Whats more, the booming middle-class is no longer immune to so-called lifestyle diseases like obesity, Type II diabetes and cardiovascular disease.

So how have pharmaceutical marketers learned to straddle wealth and poverty, generics and brands, government policy and regulations while still effectively targeting market segments?

Its a compelling question, and one that is effectively answered in this latest report, Pharma Marketing in Latin America. In the report, the authors analyses the size of the Latin American market and health care sectors, reviews the existing complexand sometimes contradictoryregulatory environment and examines key influences. How is medical tourism, the Internet, social media and e-marketing tools such as Medimix impacting pharmaceutical marketing? To answer these critical questions, the fast-paced dossier draws on penetrating research and interviews with the leading voices in the Latin American arena.

The report offers insights into:
The regulatory and economic realities facing Latin American-based pharma
The strategies, innovations and methods that are most effective, and which are not

Key features:
Case studies of the health care sectors in Colombia and El Salvador
An overview of the impact of medical tourism on the industry in Mexico
A breakdown of effective marketing and PR strategies by generics and brand firms
The role of social networks and the Internet
Analysis of the potential role of e-marketing tools like Medimix
Personal insights from five leaders in the Latin American and Mexican markets

Key Topics Covered:
Executive Summary
Size of the pharmaceutical market in Latin America
A Thriving Pharmaceutical Market
The Healthcare Sector in Latin America
Health sector case studies
Colombia
El Salvador
The regulatory environment in Latin America
Index

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