China regulator to launch drug pricing probe in June

[May 27, 2016]  SHANGHAI (Reuters) - China will carry out wide-ranging pricing inspections on drug firms, hospitals and procurement bodies from June 1, the country's top watchdog said on Friday, extending a tough cost-cutting campaign to reduce the price of healthcare.

The National Development and Reform Commission (NDRC) said in a statement it would carry out the probes from June 1 until the end of October, checking the "pricing behavior" of drug firms and related institutions.

Local media reported earlier this month that China was planning to launch "large-scale and systematic" anti-trust investigation into foreign and local drug firms.

Drug prices have become a hot-button issue for patients and politicians in China, forcing drug companies to re-think their pricing strategy in the country to keep regulators on-side. Britain's GlaxoSmithKline and AstraZenca, along with China's Betta Pharmaceuticals, recently agreed to cut prices on specific drugs by as much as 67 percent.

The NDRC said the investigations would include drug makers, medical institutions, disease prevention and control centers, blood banks, drug bidding platforms, procurement bodies and industry associations.

"The focus will be on abnormal price fluctuations of bulk medicines and various types of drugs," the NDRC said.

"In the worst, most heinous cases, we will use our utmost strength and might to protect the process of fair competition in the medicine market."

China is pursuing an ambitious program of healthcare reforms to improve the public health system and to reduce its reliance on generic and more innovative drugs from overseas.

The country's fast-growing healthcare market is a magnet for global drug makers, medical device firms and hospital operators, all looking to take a slice of a healthcare bill that is expected to hit $1 trillion by 2020, according to McKinsey & Co.

(Reporting by Adam Jourdan; Editing by Simon Cameron-Moore)

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