China launches probe into drug manufacturers

CHINA’S top economic planning agency is investigating costs and prices charged by drug companies, including units of GlaxoSmithKline and Merck, as foreign firms come under pressure from Beijing over possible price-fixing.

The move follows a separate probe into instant milk powder, which has already led to price cuts.

The National Development and Reform Commission (NDRC) is surveying production costs and prices charged at multiple foreign and Chinese drug companies, according to a statement from the commission.

The NDRC will examine 27 companies on cost issues and 33 for pricing. The investigation is being done to understand the cost and pricing situation within the companies, and to adjust drug prices in a timely manner, the agency said.

In addition to GSK and Merck, other foreign companies being investigated over costs include Astellas, Novartis’s generics unit Sandoz, Boehringer Ingelheim, Baxter and Fresenius.

An investigation team from NDRC will visit the companies involved between July and October, the agency said.

China is an increasingly important market for international pharmaceutical companies, which are relying on growth in emerging markets to offset slower sales in Western markets.