Merck, Pfizer Rebuff China’s Push for Deeper Price Cuts on Covid Drugs

Top US makers of Covid drugs appear to be pushing back on China’s efforts to get them to cut their prices, underscoring the challenges the country faces in giving its vast population easy access to antivirals.

(Bloomberg) — Top US makers of Covid drugs appear to be pushing back on China’s efforts to get them to cut their prices, underscoring the challenges the country faces in giving its vast population easy access to antivirals.

Merck & Co’s molnupiravir, also known as Lagevrio, will sell in China for 1,500 yuan ($221) per bottle, local media outlet Jiemian reported on Tuesday, citing sources it didn’t identify. While that’s lower than the cost in many western countries, the price signals the US drug firm didn’t agree to a request by the Chinese authorities to cut the price further, it said.

The company didn’t respond to Bloomberg News’ emailed request for comment on the Chinese media report. 

Merck said in a statement Wednesday on its official WeChat account that it was in talks with its state-owned partner, Sinopharm, to enable local manufacturing. The two struck a deal in September to import the antiviral to China. 

The apparent rebuff coincides with a similar deadlock over Pfizer Inc.’s antiviral Paxlovid. Talks between the drugmaker and the Chinese agency that oversees the $423 billion state medical insurance program to cut the treatment cost failed over the weekend. 

Read more: China, Pfizer Hit Paxlovid Price Deadlock Amid Covid Surge

The pricing deadlock reflects China’s quandary as it’s plunged into the biggest virus outbreak in the world after dismantling curbs last month. As its vast population clamors for treatments, China’s homegrown Covid therapies face questions around efficacy and safety while access to foreign, best-in-class ones are largely on Western pharmaceutical companies’ terms. 

The lack of treatment supply has also intensified public anger that the Chinese government did not adequately prepare for its abrupt shift in virus control.

At a briefing held in Beijing on Wednesday, Huang Xinyu, an official with the National Healthcare Security Administration, which negotiates with drug companies once a year for state insurance coverage, said it is regrettable that Paxlovid didn’t get coverage due to pricing factors but provisional measures will ensure it’s reimbursed through the end of March. He also said there were several Covid antiviral candidates seeking regulatory approval, which could potentially expand treatment options.

State medical insurance provides sole coverage for an overwhelming majority of the country’s 1.4 billion people, and the program reimburses the use of approved Covid medicines including Paxlovid and Lagevrio until the end of March. While China has managed to persuade global drugmakers to lower prices to be included in the insurance list in the past, the lack of agreement on Covid pill costs throws into question whether the drugs will continued to be covered.

With fierce demand for Covid therapies across China, the companies appear to believe that sales will still be strong even if they’re booted off the state coverage list. Pfizer’s Chief Executive Officer Albert Bourla said earlier this week that if insurance coverage lapses, the company is willing to continue to sell Paxlovid in the private market. China’s demand for a lower price than what middle-income countries pay was unacceptable to the company, he said.

“They are the second-biggest economy in the world and I don’t think that they should pay less than El Salvador, which is a poor country,” he said.

Read more: Pfizer Says Chinese Partner Is Gearing Up for Paxlovid Sales

Public anger has been growing over the difficulty of access to Covid drugs in China. A shortage of antivirals has already prompted some people in China to turn to the black market, often paying much higher prices for potentially low-quality medicines.

Pfizer’s Bourla said the company’s Chinese partner will start domestic Paxlovid production soon. The drug has so far been imported from overseas by state-owned China Meheco Co. while Chinese generic drug giant Zhejiang Huahai Pharmaceutical Co. has a deal with Pfizer to make Paxlovid ingredients locally. 

–With assistance from Bhuma Shrivastava.

(Updates to add comments from Merck in the fourth paragraph.)

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