A Chinese pharmaceutical company has fired a group of employees involved in the pricing of the country’s first drug for Alzheimer’s disease after it was covered by the national medical insurance, domestic media Jiemian reported Tuesday.
Shanghai Green Valley Pharmaceuticals let go an unspecified number of employees who participated in the price negotiations of the Sodium Oligimannate GV-971 drug with the health authorities, just over a week after it was included in the country’s medical insurance catalog. The company’s dissatisfaction over the agreed pricing with government officials may have led to the termination, the media outlet reported, citing staff.
This year, the National Healthcare Security Administration negotiated the price for 117 drugs with their manufacturers, of which 67 were included in the medical insurance catalog. The average cost of those drugs was reduced by 62% compared with the previous market price.
The Alzheimer’s drug now costs 296 yuan ($45) per box under the insurance scheme, significantly less than the minimum price of 450 yuan Green Valley offered last year. The GV-971 drug originally cost 895 yuan for a box with 42 capsules.
Sixth Tone was unable to reach Shanghai Green Valley Pharmaceuticals for comment. However, a source close to the company said the firings could be a cost-cutting measure instead.
“Most of the fired employees worked in marketing and medical science departments and were assigned to communicate with medical professionals to make them better aware of the new drug,” the employee, who declined to be named, told Sixth Tone. “After the medicine was included in the public health insurance scheme at a much more affordable price, the company may believe such efforts are no longer necessary. Cutting these functions can help save the cost of operations.”
Since its approval and sale in 2019, Green Valley’s GV-971 drug has stirred controversy, with some researchers doubting its effectiveness. Meanwhile, its manufacturers claim the drug — currently in third phase trials in the United States — can significantly improve the cognitive performance of people with Alzheimer’s.
Editor: Bibek Bhandari.
(Header image: People Visual)