Government's tariff exemption policy on imported cancer medicine to improve national health
The Chinese government has vowed to exempt tariffs on imported cancer drugs from May 1 and has encouraged healthcare companies to introduce more innovative cancer drugs to the market, major steps in improving national health. Accessing cancer treatment has been met with huge barriers for Chinese families for years due to a history of expensive drug prices. But the recently unveiled tariff policy may provide new hope for those patients who are struggling to fight this awful disease.
For a resident surnamed Wang in Handan, North China's Hebei Province, the Chinese New Year holiday was a difficult time for him and his family following the death of his mother-in-law.
"She suffered from lung cancer for three years. It was really sad, but we were prepared for it," he said.
Her disease also became a huge financial burden. Wang, who is self-employed, had to pay 51,000 yuan ($8,123) every month for Tagrisso tablets, which are used to treat lung cancer, he told the Global Times.
"Other relatives also lent us money, my uncle, my aunt… as this daily pill could not be covered by social medical insurance," he said.
Lung cancer pill Tagrisso, produced by UK-based pharmaceutical company AstraZeneca, got the approval in China in March 2017, and was also the company's first medicine to be approved under the Chinese regulator's accelerated program for introducing innovative medicine, according to the company's website.
It is no secret that imported cancer drugs are expensive in China, said a doctor surnamed Liu, who currently works at a cancer hospital in Beijing.
"Although some domestically produced generics are less expensive, the prices for patented drugs, which are under a patent protection period and have no generic versions, are always very high and not always included on the National Reimbursement Drug List," he told the Global Times.
Gefitinib (Iressa), which is also used to treat lung cancer, had its generic versions approved by the China Food and Drug Administration in 2017 and has seen its average monthly dosage price drop from 20,000 yuan in 2005 to 5,000 yuan currently after negotiations with AstraZeneca.
The drug can also be reimbursed at about 50 percent through medical insurance, Liu said.
Since patients face multidimensional challenges in accessing cancer treatment, the Chinese government has been stepping up efforts to tackle the problem, as part of its vows to improve people's livelihoods.
The State Council, China's cabinet, announced on April 12 that it would exempt tariffs on imported cancer drugs and encourage firms to introduce innovative cancer drugs from May 1.
Meanwhile, the government will accelerate the introduction of much-needed innovative drugs on the reimbursement list while eliminating unreasonable drug prices currently in market circulation.
The new tariff policy aims to lower prices of imported cancer drugs, Chinese Premier Li Keqiang was quoted as saying in a government statement. Also, the country will speed up innovative drug approvals "to ease the burden on patients and their families as much as possible," Li said.
Boon for healthcare
China is a country with some of the least affordable cancer drug prices in the world, according to a report released by the London-based Economist Intelligence Unit in June 2017.
The median price for a one-month dose of generic cancer drugs is $532 in China, a staggering 48 percent of GDP per capita, the report showed.
"In spite of rapid economic growth, the country has seen the shortcomings of the healthcare system over the past years, like expensive drugs, which are mostly developed and manufactured by foreign pharmaceutical firms," Wu Bin, vice chairman of the China Association of Pharmaceutical Commerce, told the Global Times.
It usually takes many years for a drug to be created, then another several years for it to gain licensing approval, and then comes a significant amount of investment, factors which all drive up prices, Wu explained.
Premier Li has urged some foreign medicine producers, including Shanghai Roche Pharmaceutical Ltd, to lower drug prices, which would benefit more cancer patients, domestic news site china.com.cn reported on April 12.
The company, an affiliate of Swiss multinational healthcare firm Roche in China, has already lowered prices of some drugs, and successfully negotiated with Chinese authorities to ensure four targeted cancer drugs were included on the reimbursement list, the media report said.
More reasonable prices would help more patients access treatment in a more timely manner, which would mean that the company would make smaller profits but a quicker turnover, a win-win for both sides, Li noted.
However, the recent announcement of exempting tariffs on imported drugs may have a limited influence on their retail prices, as current tariffs are not that high, said Liu, the doctor. "The tariffs are less than 10 percent now, which is not a crucial factor in making imported cancer drugs so expensive."
"The input into drug research at the initial stage, which can cost millions, even billions, of dollars, also helps drive up prices," he said, noting that retail prices will drop slightly after the policy takes effect.
Gap to fill
Zero tariffs could encourage foreign drug producers to increase their exports to the Chinese market, which would make competition between foreign and domestic companies much more intense, Wu noted.
"Chinese companies will be urged to increase investment in R&D, and stronger market competition can help upgrade healthcare services," the vice chairman said.
Also, accelerating the approval procedures for innovative drugs has already had a significant impact on the sector, especially since China has been lagging behind developed countries in terms of innovative drug application, the Shanghai Securities Daily reported on Friday.
From 2001 to 2016, 433 innovative drugs in total were put on the market in developed countries, whereas only about 100 became available in China, according to the media report.
To make medicine more affordable, it is crucial that domestic companies enhance innovation capabilities to break down the monopoly of foreign pharmaceutical firms, according to a post published on the central government's website on Monday.
