Chinese negotiators tried to get Pfizer to lower the price of its antiviral Paxlovid -- a front-line treatment in the ongoing wave of COVID-19 infections sweeping the country -- to just 200 yuan per box, an industry insider told Radio Free Asia.
Negotiations between China's National Healthcare Security Administration (NHSA) and Pfizer "failed because of the drug's high price," China's state-backed media newspaper reported last week.
The nationalistic tabloid Global Times accused U.S. "capital forces" of profiteering from the current wave of COVID-19, amid an ongoing shortage of antivirals and widespread reports of pneumonia since the lifting of restrictions last month.
The financial magazine Caixin quoted unnamed sources as saying that Pfizer hadn't lowered its price significantly beyond the 1,890 yuan (U.S. $280) it currently charges Chinese hospitals, while the Global Times said the drug hadn't been included in China's national medical insurance program due to the high price.
That claim was judged to be "misleading" following an investigation by the Asia Fact Check Lab, which is affiliated with Radio Free Asia.
Healthcare industry insider Zhang Ning said Chinese negotiators had already gotten Pfizer to reduce the price of a box of Paxlovid from the original price of 1,890 yuan to just 604 yuan.
"[But] the price they wanted to get it onto the medical insurance [approved list] was 200 yuan/box," Zhang said. "[Homegrown antiviral] Azvudine was entered into the medical insurance catalog at 270 yuan/box."
She said Azvudine, a broad-spectrum antiviral agent developed in China to treat HIV/AIDS and approved for use in the national medical insurance system last August, cost far less to produce than small molecule treatments like Paxlovid.
While Radio Free Asia was unable to verify Zhang's claims independently, they are similar to recent comments from Pfizer CEO Albert Bourla, who recently said that negotiations broke down because the Chinese side wanted to sell Paxlovid at a price lower than Pfizer's price for low- and middle-income countries.
Lower than El Salvador
Bourla said on Jan. 10 that talks with China on future pricing for the treatment had broken off after China had asked for a lower price than Pfizer is charging for most lower middle income countries.
"They are the second highest economy in the world and I don't think that they should pay less than El Salvador," Bourla said in comments reported by Reuters at the time.
Zhang said it was unclear why the medical insurance bureau had insisted on such a low price for Paxlovid, given that Azvudine is still in clinical trials.
"The cost of the technology to produce small molecule drugs [like Paxlovid] is very high ... and the phase three clinical trials for Azvudine haven't even been completed yet," she said. "They have just recruited 1,000 COVID-19 patients for the trial."
Li Sha, chief pharmacist at the No. 2 Affiliated Hospital of Xi'an Jiaotong University, said Azvudine was mainly indicated for use in patients over 60 with underlying health conditions.
"[This is] because there have been a lot of adverse reactions, including damage to the nervous system and to liver and kidney function," Li said.
"It's not recommended for pregnant and lactating women, as well as patients with severe liver and kidney damage."
Zhang said the dispute comes amid a nationwide shortage of Paxlovid, which has been known to change hands on the black market for tens of thousands of yuan a box.
"There isn't any [Paxlovid] available at all, and there has been no sign even on the black market of any new supply during the past couple of days," she said. "So many people are waiting to buy them."
"Everyone is currently buying oxygen machines on the black market, snapping them up along with human serum albumin," Zhang said.
Black market
A Shanghai resident who gave only the surname Huang said human serum albumin is currently selling for several hundred yuan/dose in hospitals, and anything from 1,500-5,000 yuan on the black market.
According to Zhang, the albumin can only be sourced from human plasma, and the current shortage reflects an overall shortage of blood donors.
A recent investigation by the Asia Fact Check Lab suggested that the price of Paxlovid had little to do with the decision not to include it in the medical insurance list of approved drugs.
Paxlovid, also known as Naimatevir Tablets/Ritonavir Tablets, is a small-molecule antiviral oral drug that comes "strongly recommended" by the World Health Organization for the early and mid-term treatment of people at risk of severe illness after infection with COVID-19.
The U.S. government has already agreed to buy 10 million courses of the drug at a cost of around U.S.$530, or 3,700 yuan, compared with the 1,890 yuan/box price initially agreed for the Chinese market.
Germany has agreed to procure one million boxes at a cost of 500 Euro, or 3,640 yuan a box, the investigation found.
It found that Beijing had allocated sufficient funds to pay for Paxlovid, with the national health insurance fund currently enjoying a surplus of more than five trillion yuan, with revenues rising by 7.7% from January to November 2022, compared with the same period the year before.
It cited an economist as saying that Paxlovid wouldn't make enough money for the Chinese healthcare sector.
"It's never been about spending taxpayers’ money, and nor a question of whether [Paxlovid] is worth the money," the economist said. "The real question is who makes money."
Translated by Luisetta Mudie.