China extends squeezed-out foreign pharmaceuticals firms an olive branch

By Joe Cash

BEIJING (Reuters) -China's Commerce Minister told foreign pharmaceuticals firms they can expect "more development opportunities" during a roundtable on Wednesday, his ministry said, as drugmakers bemoan government procurement policies pricing them out of the market.

Representatives from 12 companies, including AstraZeneca, Bayer, Merck, Novo Nordisk, Pfizer, Roche, Sanofi, and Takeda, attended the meeting with Wang Wentao, the statement said.

Foreign pharmaceuticals firms have struggled to cement any inroads they have made into the world's second-largest economy, with the government maintaining a drug procurement programme that forces them to slash their prices and refusing to approve the use of any foreign COVID-19 vaccines during the pandemic.

But as China pursues home-grown modernisation it will also open up "more development opportunities for foreign-funded enterprises, including the pharmaceutical industry," Wang told the meeting.

Notably, the statement made no mention of whether Moderna had been in attendance, which on Wednesday announced it had signed a deal thought to be worth around $1 billion to research, develop and manufacture mRNA medicines in China.

Chinese Premier Li Qiang at a meeting with Chinese and foreign business leaders to the side of the World Economic Forum Summit in Tianjin last month acknowledged "that prices have been excessively suppressed in government procurement".

But in response to a question from an executive from Merck, Li added: "You should also understand that our medical and social security systems and patients cannot cope with excessively high prices for new medications."

"I can tell you frankly that my personal wisdom cannot come up with a relatively good solution, I hope we can find one as soon as possible through collective efforts," Li said at the time.

Wang told the meeting on Wednesday that his ministry will expand the channels of communication for responding to and solving concerns, with the meeting resulting in 25 specific suggestions to be taken forward.

Previously, drugmakers have had to slash their prices by as much as 95% to win contracts in China's drug procurement programme, a national scheme where global pharmaceuticals companies and Chinese generic drugmakers vie to sell their products in bulk at public hospitals.

(Reporting by Joe Cash; Additional reporting by Kevin Yao;Editing by Elaine Hardcastle)