Pharmaceutical company lays off employees allegedly because of cheaper drug prices

A Chinese pharmaceutical company has fired a group of employees involved in pricing the country’s first drug for Alzheimer’s disease after it was covered by national medical insurance, national media Jiemian reported on Tuesday.

Shanghai Green Valley Pharmaceuticals has laid off an unknown number of employees who participated in price negotiations for the drug Sodium Oligimannate GV-971 with health authorities, just over a week after it was listed in the health insurance catalog of the country. The company’s dissatisfaction with prices agreed with government officials may have led to the termination, the outlet reported, citing staff.

This year, the National Healthcare Security Administration negotiated the price of 117 drugs with their manufacturers, 67 of which were included in the health insurance catalog. The average cost of these drugs has been reduced by 62% compared to the previous market price.

The Alzheimer’s drug now costs 296 yuan ($45) per box under the insurance plan, significantly less than the minimum price of 450 yuan offered by Green Valley last year. The GV-971 drug originally cost 895 yuan for a box of 42 capsules.

Sixth Tone could not reach Shanghai Green Valley Pharmaceuticals for comment. However, a source close to the company said the layoffs could instead be a cost-cutting measure.

“Most of the terminated employees worked in the marketing and medical science departments and were responsible for communicating with medical professionals to raise their awareness of the new drug,” said the employee, who declined to be named, at Sixth Tone. “After the drug has been included in public health insurance at a much more affordable price, the company may feel that such efforts are no longer necessary. Removing these functions can help reduce the cost of operations. »

Since its approval and sale in 2019, Green Valley’s drug GV-971 has sparked controversy, with some researchers doubting its effectiveness. Meanwhile, its makers say the drug – currently in third-stage trials in the US – can significantly improve cognitive performance in people with Alzheimer’s disease.

Publisher: Bibek Bhandari.

(Header image: People Visual)

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