King & Wood Mallesons

Asia-Pacific 100 position: 3

China’s investigation into drug pricing: what you need to know

By Harry Liu, Chen Dong, Qiu Yue and Li Yi

On 2 July, the National Development and Reform Commission (NDRC) announced an investigation into the prices charged by 60 foreign and domestic drug makers.

Pharmaceutical manufacturers should be aware that the investigation process imposes certain rights and obligations on manufacturers and investigating authorities. The Chinese pharmaceutical pricing regime is primarily governed by the Price Law of the People’s Republic of China, the Pharmaceutical Administration Law of the People’s Republic of China, the Regulations for the Implementation of the Drug Administration Law of the People’s Republic of China and the Code of Conduct for Pharmaceutical Pricing.  

Authorities have the right to fix prices for drugs listed in the directory of drugs for national basic medical insurance and drugs not listed in the directory but monopolistically manufactured and distributed. There are about 2,700 kinds of drugs within these categories, which represent 23 per cent of the drugs on the market…

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