China’s National Healthcare Security Administration recently broke off talks with Pfizer to include Paxlovid among the medications eligible for reimbursement under the country’s national health insurance system. Officials said the company was charging too much for the antiviral medicine.
Many netizens on popular Chinese social media sites WeChat and Weibo have further blamed the joint World Health Organization (WHO) and the Medicines Patent Pool for not including China amongst the upper-middle income countries eligible to receive generic COVID medications at cheap prices.
Asia Fact Check Lab (AFCL) found it misleading to blame the breakdown of talks on Pfizer’s pricing for Paxlovid. China’s own per-capita income statistics preclude it from buying Paxlovid at the same price as other upper-middle income countries, and the vast sums the country has spent on combating COVID – both inside and outside its borders – indicate that the price of a single medication is not likely a critical issue.
China’s healthcare security agency on Jan. 8 announced that Paxlovid, an oral medication “strongly recommended” by WHO in use against COVID, would not be added to the list of medications eligible for reimbursement under domestic healthcare plans due to its cost.
The decision was made in spite of findings from China’s National Health Commission that detail the drug’s usefulness in treating patients in the early and intermediate stages of infection. Skyrocketing demand for the medicine has made it almost impossible to legally obtain in China, and black market scalpers regularly fetch tens of thousands of yuan for a box.
Is Pfizer asking too high a price for Paxlovid?
Details of China’s negotiations with Pfizer were not publicly released. An article published by Chinese media conglomerate Tencent cited an insider source as saying that an offer to sell Paxlovid for 700 yuan ($104) per course was rejected. Neither side has confirmed the statement.
Pfizer CEO Albert Bourla mentioned the negotiations at the J.P. Morgan Healthcare Conference held on Jan. 9. He noted that Paxlovid prices are based on the income levels where it is sold. “They (China) want it lower than the lowest of the middle, and we didn’t agree,” Bourla said. “They are the second highest economy in the world, and I don’t think that they should pay less than El Salvador.”
Paxlovid received emergency approval from the State Food and Drug Administration on Feb. 11, 2022, with the first batch of 21,200 boxes selling for 2,300 yuan per course the following month. One course includes 30 tablets meant to be consumed over five days.
Before the latest round of negotiations began, the People’s Daily, a government-aligned newspaper, reported that the price for a course of Paxlovid under a government healthcare plan had dropped from 2,300 yuan to 1,890 yuan. If patients were able to obtain maximum reimbursement, their out-of-pocket payment would only be 189 yuan per course.
Some countries have purchased Paxlovid directly with national funds to minimize the costs for patients. The U.S. has ordered 10 million doses priced at around $530 (3,700 yuan) per course, offered free to eligible patients who test positive for COVID. The German Federal Ministry of Health purchased 1 million doses at a cost of 500 euros per course (3,640 yuan). The governments of Taiwan and Hong Kong bought Paxlovid for about $700 (4,716 yuan) per course.
All these prices are at least a thousand yuan higher than prices in China.
Is China a low or middle-income country?
Several WeChat and Weibo users have claimed that buying Paxlovid without the discounts provided by a licensing agreement signed between Pfizer and the Medicines Patent Pool (MPP) – an international public health agency that works with pharmaceutical companies to provide critical medications poorer countries at low costs to — would place undue financial stress on China’s healthcare system.
The agreement allows generic knockoffs of Paxlovid to be sold royalty-free in low, lower-middle and some upper-middle income countries. According to self-reported World Bank data, China has been listed amongst upper-middle income countries since 2010 and its current GDP per capita of $12,234 places the country near the top of upper-middle income countries. The MPP uses the same data to determine countries’ eligibility to buy their generic Paxlovid.
And the country appears to have plenty of money on hand. The National Healthcare Security Admission split a bill of over 120 billion yuan ($17 billion) on vaccines with China’s Ministry of Finance since COVID broke out, and still retained a surplus of more than 500 billion yuan ($74 billion) in 2022 alone, according to National Health Insurance Administration data. China has donated an additional $200 million to several international COVID response funds.
China promotes domestically produced medicines
In denying coverage for Paxlovid, China may be opening up market space for local drug companies.
On Jan. 6, the National Health Insurance Administration issued its Guidelines for Setting COVID Drug Treatment Prices (Trial Implementation). Hu Shanlian, a professor at Fudan University’s School of Public Health, told the People’s Daily that the guidelines will ensure the affordability of COVID medicines produced in China. “Ordinary people will be able to buy these drugs at low cost,” he said. “Domestically produced COVID medication will thus gain a larger market share than imports, due to their cost advantage and effective treatment.”
Just as negotiations with Pfizer broke off, two Chinese-made medications – Azvudine tablets and Qingfei Paidu granules – were cleared to be included as reimbursable COVID medications under national health insurance plans. Azvudine was originally a medication for HIV patients, only approved as a treatment for COVID in July 2022. Qingfei Paidu is a traditional Chinese medicine that lacks data from phase 3 clinical trials that show whether the medication might cause less common side effects in specific groups of people.
Asia Fact Check Lab (AFCL) is a new branch of RFA, established to counter disinformation in today’s complex media environment. Our journalists publish both daily and special reports that aim to sharpen and deepen our readers’ understanding of public issues.