Pricing investigation

Media reported on Tuesday that the National Development and Reform Commission has launched an investigation into 60 drugmakers, including foreign companies and more than 10 listed domestic companies.

The foreign companies include Merck Sharp & Dohme, Sandoz and Glaxo-SmithKline. The listed domestic companies include Harbin-based Gloria Pharmaceuticals, Zhejiang Hisun Pharmaceuticals Co in Taizhou, and Chongqing-based Southwest Pharmaceuticals Co.

Thirty-three of the pharmaceutical makers were investigated for their products' factory prices, while 27 others, including GlaxoSmithKline and Jiangsu Hen Rui Medicine Co, were probed for their production costs.

The NDRC said the list of enterprises was drawn randomly, and it aimed to find out the costs and pricing in medicine production and logistics so that it can adjust prices. But industry insiders worried that more measures are to follow.

The NDRC conducted an investigation on the production cost of 28 types of medicine in 2006, which was followed by lower retail prices for 67 anti-tumor drugs.

A popular opinion among insiders believes the investigation was launched because the pharmaceutical industry is an industry of exorbitant profits.

Ten listed drugmakers registered a gross profit of more than 80 percent. Among the 176 listed pharmaceutical firms, some 70 percent registered a gross profit of more than 30 percent.