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China Insight - Lifesciences

New Drugs Administration Law Paves the Way for New Reform

15/05/2015

On 24 April 2015, China revised the Drugs Administration Law for the second time following the last revision in 2013.

The main two revisions to the Drugs Administration Law in 2015 are the following:

  1. Provisions related to drugs pricing as set forth in Article 55 of the Drugs Administration Law are deleted. Article 55 sets out the current principle of drugs pricing. Drugs pricing is determined either by government or by market, depending on whether a drug falls under the catalogue of drugs which are covered and reimbursed by social insurance scheme or other special circumstances (e.g., blood products, vaccines, contraceptives). The government controls the price of drugs falling under the above scope by setting up either a cap ex-work price (domestically made drugs)/CIF price (imported drugs) or a cap retail price. The deletion of such clause implies that the price control on drugs will soon be abolished and the drugs price, in the future, will be mostly determined by the market. The detailed implementation rules are expected to come very soon.

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Source
China Insight - Lifesciences
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Authors

Nicolas Zhu
Nicolas Zhu
Partner
Shanghai
Lingyun Rao
Lingyun Rao, LL.M.