Tariffs cut to zero for many imported drugs

Move to fulfill vow to broaden access, reduce patients’ costs

China announced it will exempt import tariffs of all common drugs, including cancer drugs, starting May 1, fulfilling a pledge to broaden local market access to cut costs for patients and improve the country’s healthcare system, according to a statement from the Ministry of Finance.

The Customs Tariff Commission of the State Council said late on Monday that a list of 28 imported drugs will face no tariffs. Besides cancer drugs, cancer alkaloid-based drugs and imported traditional Chinese medicines are also on the list.

Tariff rates for the listed imported drugs now range from 3 percent to 6 percent. “After the policy adjustment, except for very few China-produced specialty drugs and some alkaloid-based kinds, most imported drugs, especially anti-cancer ones, will receive zero-tariff treatment,” the statement said.

“The tariff cut is a new measure of further opening-up that could satisfy residents’ demand for better medical treatment as well as support an open and inclusive multilateral trade system.”

A significant level of valueadded taxes will be reduced for the production and importation of cancer-treatments, it said.

In addition, the government will incorporate imported innovative drugs — especially cancer drugs — into the catalog of medical insurance reimbursements and accelerate imports of innovative drugs.

More measures, including promoting centralized government procurement and eliminating premium prices for drugs by means of cross-border e-commerce, will be undertaken to reduce the prices of cancer drugs and ease the economic burden on patients being treated for cancer, according to the Ministry of Finance.

According to the national cancer institute, the market for anti-neoplastic drugs in China exceeds 120 billion yuan ($19.1 billion).

“Once the drugs are included in the national reimbursement list of drugs that are covered by the governmentsponsored basic medical insurance, the drugs’ sales will increase sharply,” said Flora Zhu, a pharmaceutical industry analyst at Fitch Ratings, a global credit rating agency.

“Given the numerous patients and relatively high prices of anti-cancer drugs, the new policy will surely benefit the patients by reducing costs, which accounts for more than 60 percent of the overall treatment expenses,” said Chen Qiaoshan, a senior medical analyst at Beijing-based internet consultancy Analysys.

According to the National Center for Cancer, the number of new cancer patients in China each year is about 4.3 million.

“China’s ability to develop anti-cancer drugs is still relatively weak, and we lack generic drugs, so the country basically relies on imports,” she said.

The move will reduce costs in production and research and development, experts said.

“As a clinical cancer doctor, I truly welcome the latest zerotariff policy, which could help lower the expensive imported cancer therapies,” said a senior lung cancer doctor surnamed Cui at China-Japan Friendship Hospital.

The cuts to tariffs and valueadded taxes is expected to lower prices of cancer target therapies by nearly 20 percent, Cui said.

Shan Juan contributed to this story.