Chinese commission reviewing drug pricing

China's National Development and Reform Commission (NDRC) is reviewing drug pricing and manufacturing costs for 60 Chinese and international pharmas. The commission said the review will take place between July and October and will look at 2010-12 data, including corporate audits, sales contracts and invoices. Companies in the survey include GlaxoSmithKline plc (LSE:GSK; NYSE:GSK); Astellas Pharma Inc. (Tokyo:4503); Boehringer Ingelheim GmbH (Ingelheim, Germany); and the Sandoz generics unit of Novartis AG (NYSE:NVS; SIX:NOVN).

Citi Analyst Richard Yeh said in a note the survey will likely focus on branded generics from international pharmas, as well as drugs recently added to China's essential drug list, which comprises drugs and traditional Chinese medicines that are considered the minimum level of drug coverage and are fully reimbursable under China's Basic Medical Insurance. Yeh said the survey may not lead to price cuts on the surveyed drugs "but likely reflects NDRC's intention to build a more optimized drug pricing regulation system and to provide a basis for future price cuts on overly priced drugs." The NDRC is a government body charged with economic development in China. ...