Reports: China investigating drug pricesBy AP News Jul 05, 2013 4:38PM UTC
BEIJING (AP) — China has launched an investigation into drug prices set by 60 foreign and domestic manufacturers, according to news reports Friday, in a possible move to lower costs.
The probe is the second major government action on consumer prices under Chinese leaders who took power last year and face pressure to contain surging living costs that threaten to fuel political tensions.
This week, at least one foreign supplier of infant formula cut prices in response to an investigation of possible price-fixing.
The Cabinet’s economic planning agency is gathering information on drug costs to support “development of drug price adjustments,” the newspaper China Business News said, citing agency officials. Similar reports appeared in other major newspapers and on the website of Hong Kong-based broadcaster Phoenix Satellite Television.
The reports gave no indication of possible wrongdoing by drug suppliers.
Phone calls to the planning agency were not answered and there was no announcement of the probe on the agency’s website.
China’s government sets maximum prices for hundreds of drugs.
Last week, police in the central city of Changsha said they detained several employees of British-based drug manufacturer GlaxoSmithKline to investigate possible unspecified “economic crimes.” The company said it did not know details of the investigation but would cooperate.
Earlier, the Cabinet planning agency, the National Development and Reform Commission, launched an investigation of possible price-fixing by foreign milk suppliers.
In response, Nestle SA announced this week it will cut infant formula prices in China by an average of 11 percent starting Monday.
Other companies including Danone Dumex, Abbott Laboratories, Mead Johnson Nutrition Co. and FrieslandCampina said they were cooperating with the investigation but did not respond to questions about whether they would also cut prices.