China’s Ozempic injections are significantly more affordable in comparison to the United States, with prices nearly 15 times cheaper. This cost difference can be attributed to the Chinese government’s practice of negotiating prices directly with drug manufacturers. In addition, Chinese customers have the option to purchase Ozempic injections online through a simple digital consultation process. The accessibility and affordability of these drugs in China can be attributed to the government’s policy of negotiating prices with pharmaceutical companies. As part of this policy, drugmakers must negotiate directly with the government in order for their products to be covered by China’s state-funded medical insurance scheme. Consequently, Ozempic jabs in China cost 478 Chinese yuan, or $67, according to China’s National Reimbursement Drugs List (NRDL). In contrast, the cost of an Ozempic injection in the US is $995, according to the pharmaceutical website Drugs.com.
James Leong, the Asia-Pacific head of marketing at BASF Pharma Solutions, stated that the NRDL is the primary market access channel for drug manufacturers in China and provides a significant boost in sales for companies. However, gaining market access in China requires drugmakers to accept significant price cuts in exchange for their products being listed on the NRDL. In December 2021, drugmakers had to reduce prices by an average of 61.7% for 67 medicines just to be included on the NRDL, according to Reuters.
Despite the price reductions for drugmakers, the average Chinese consumer benefits from the availability and affordability of Ozempic on the NRDL. Not only is the drug significantly cheaper in China compared to other countries, but it is also readily available online at lower prices. James Leong mentioned that although Ozempic is a prescription drug, it can be easily purchased from e-commerce platforms such as JD.com, similar to Amazon. Moreover, customers in China do not need to visit hospitals to obtain their prescriptions. Community clinics and qualified online hospitals are authorized to prescribe medication, providing convenience to individuals seeking weight loss injections. The rise of digital pharmacies in China has further facilitated access to Ozempic during the COVID-19 era.
In terms of the purchasing process, a legitimate resident identification number and a health declaration are required on platforms like Taobao, the Chinese version of Amazon, when buying Ozempic jabs. However, this verification process does not deter Chinese buyers from obtaining the injections. Chinese customers have shared positive reviews of their weight loss results on Taobao, emphasizing the effectiveness of Ozempic.
While the lower prices benefit consumers, drugmakers and pharmaceutical companies face the challenge of recouping their research costs. Xi Chen, an Associate Professor of Health Policy & Economics at Yale University, believes that the NRDL enhances the Chinese government’s fiscal sustainability by balancing access to treatments with the financial feasibility of the reimbursement program. However, if negotiated prices are too low, it may create financial difficulties for companies, especially those that have invested significantly in research and development. Moreover, the NRDL undergoes regular updates and revisions, and drugs can be removed from the list, posing risks to companies that have heavily invested in drug development.
Despite the challenges, the immense size of the Chinese market entices drugmakers to participate. China is the second-largest healthcare market globally, offering opportunities for compensation of research and development costs. BASF Pharma Solutions’ James Leong expressed that although innovative pharma companies need to sell their drugs at lower prices in China compared to Western countries, the size of the Chinese market makes up for the difference.
Novo Nordisk, the manufacturer of Ozempic, emphasized that pricing of medicines varies across countries and it is challenging to make direct price comparisons. Each country has its own approach to pricing prescription medication. Ambre James-Brown, a vice president at Novo Nordisk’s media department, highlighted that the US list price for Ozempic does not reflect the patient’s out-of-pocket expenses when insurance covers the treatment. Ultimately, China and the US have different pricing strategies for prescription drugs.
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