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China Cuts Domestic Drug Prices by 21% on Average; Could This Cause Higher Prices in the U.S.?

This week in China, the National Development and Reform Commission put dramatic retail drug price cuts into effect. To lower prices, hospitals and clinics are now required to cap the costs for over 1,200 antibiotics and circulatory system drugs, according to Reuters. The 21% average decrease means $1.53 billion savings for Chinese patients – which is good news for them, but what does this mean for Americans?

While many of our drugs or drug ingredients are already manufactured in China, these price cuts won’t reduce the price of those drugs sold in the U.S. What could happen is the opposite. Lower prices in China may further drive increases in U.S. drug prices as drug companies look to the U.S. market to make up for lower margins in China. The U.S. is the only large market in which drug companies can arbitrarily increase their prices. (more…)

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