Chinese People Turn to Indian-Made Generic Drugs After Pfizer’s Paxlovid Excluded from China’s Health Insurance

China rejects Pfizer’s antiviral drug not because it is 'overpriced' as publicly stated: analysis

Pfizer's Paxlovid is displayed in Pembroke Pines, Fl., on July 7, 2022. Joe Raedle/Getty Images

News Analysis

Chinese people are searching for Indian-made generic drugs after Paxlovid, Pfizer’s COVID-19 antiviral drug, was recently excluded from China’s national health insurance scheme.

On Jan. 8, China’s National Health Insurance Administration (NHSA) failed to negotiate with Pfizer to include Paxlovid in the national health insurance scheme on the grounds that Pfizer’s quote was too high, according to Chinese state-run media.

Paxlovid, which contains two major oral antivirals: nirmatrelvir and ritonavir, can reduce the risk of hospitalization or death by 89 percent in people at risk who took the drug within three days of symptoms onset, according to a clinical trial sponsored by Pfizer.

China’s Drug Administration initially granted emergency approval to import Paxlovid on Feb. 11, 2022, and temporarily added it to medical insurance in March 2022.

Peking Union Medical College Hospital published in December 2022 a reference protocol for the use of Paxlovid in the treatment of mildly ill people at risk of developing severe and critical illnesses, according to a report in Chinese state news media.

In the same month, infection cases broke out due to the Chinese Communist Party’s (CCP) sudden move to drop the harsh zero-COVID restrictions, which triggered a skyrocketing increase in demand for Paxlovid.

In some high-end private hospitals, Paxlovid can cost as much as 8,300 yuan ($1,200) per box. An official at Oasis International Hospital in Beijing told the Financial Times in a report published on Dec. 28, 2022, that 300 boxes of stock were sold out within 24 hours.

Indian-Made Drugs

After the latest outbreak in December 2022, Chinese people went on a Paxlovid buying spree, with the drug allegedly being sold for 50,000 yuan ($7,400) a box on the black market, according to state-run Chinese media. It has become a favorite gift item among circles of elites, officials, and business owners.

Many less affluent Chinese are turning to generic Indian-made drugs, of which Primovir and Paxista—Indian “green boxes” and “blue boxes,” respectively, based on the color of their packaging—are most popular.

India produces one-fifth of the world’s generic drugs. The price of Indian generic drugs can be as low as about 1 percent of the branded ones.

However, Chinese health experts warned that many fake Indian-made Paxlovid has flooded the market and that they do not contain Nirmatrelvir, the main ingredient that blocks the replication of the virus and without which the treatment will not work.

On Jan. 5, Yin Ye, CEO of BGI Group, a Beijing-based genetics research institution, said on the Chinese social media platform WeChat that a friend had purchased Indian-made generic drugs and wanted the company to help test them. The results showed among the 150 samples, only eight samples detected Nirmatrelvir.

A man buys fever medicine at a pharmacy amid the COVID-19 pandemic in Nanjing, in China's eastern Jiangsu province, on Dec. 19, 2022. STR/AFP via Getty Images

Paxlovid Is Not Overpriced in China

NHSA claims they refused to include Paxlovid in the health insurance plan because it is overpriced, but it seems untenable as the price of Paxlovid is relatively low compared to other countries.

In February 2022, China granted emergency approval for Paxlovid to enter the Chinese market. In March 2022, the drug was temporarily added to the medical insurance, with a purchase price of 2,300 yuan ($339) in mainland China.

According to data from by Observer Research Foundation, an international think tank in Mumbai, for the world’s largest buyer, the United States, Paxlovid’s procurement price is $529 per box; for European countries, the government procurement price is $600-$700 per box, and Taiwan has a procurement price of about $700 per box.

In Australia, Paxlovid is available for A$1,159 (approximately $807).

Moreover, all these countries have already incorporated Paxlovid into their health insurance systems.

In Australia, Paxlovid is prescribed at a price of A$42.50 (approximately $30) after centralized government procurement.

On Dec.13, 2022, Pfizer reached an agreement with the U.S. government to provide an additional 3.7 million treatments for Paxlovid. This purchase complements the 20 million treatments previously contracted by the U.S. government and delivered to the U.S. government.

On Dec. 22, 2022, Pfizer agreed with the U.K. government to provide an additional 2.5 million treatments for Paxlovid. This is in addition to the 250,000 treatments previously contracted by the U.K. government, bringing the total number of treatments to 2.75 million.

China Refuses Moderna and Pfizer COVID-19 Vaccines

Price may not be the main reason CCP refuses to include Paxlovid in Medicare. The CCP has refused to introduce the U.S. Pfizer and Moderna COVID-19 vaccines.

The mRNA vaccine technology used by Moderna and Pfizer provides a longer-lasting and higher level of protection than the inactivated vaccine technology used by Chinese manufacturers. Several Chinese pharmaceutical companies are competing to develop their own mRNA vaccines, but so far, they have not been successful.

From 2020 to 2021, Moderna and the Chinese Communist government were in talks to enter the Chinese market. Last October, the Financial Times reported that Moderna’s sales talks in China broke down after it refused Beijing’s request to hand over its mRNA vaccine formula.

Beijing offers foreign vaccine makers two ways to sell in China: either a full technology transfer to a Chinese drugmaker or a joint venture with a Chinese company to set up a manufacturing plant in China.

Medical professionals feared that the government’s refusal to include Paxlovid in China’s health insurance would add to China’s peak in COVID-19 death cases.