Asia Fact Check Lab: Is Paxlovid too expensive for China to purchase?

In Brief

China’s National Healthcare Security Administration recently broke off talks with Pfizer to include Paxlovid among the medications eligible for reimbursement under the country’s national health insurance system. Officials said the company was charging too much for the antiviral medicine. 

Many netizens on popular Chinese social media sites WeChat and Weibo have further blamed the joint World Health Organization (WHO) and the Medicines Patent Pool for not including China amongst the upper-middle income countries eligible to receive generic COVID medications at cheap prices.

Asia Fact Check Lab (AFCL) found it misleading to blame the breakdown of talks on Pfizer’s pricing for Paxlovid. China’s own per-capita income statistics preclude it from buying Paxlovid at the same price as other upper-middle income countries, and the vast sums the country has spent on combating COVID – both inside and outside its borders – indicate that the price of a single medication is not likely a critical issue. 

In Depth

China’s healthcare security agency on Jan. 8 announced that Paxlovid, an oral medication “strongly recommended” by WHO in use against COVID, would not be added to the list of medications eligible for reimbursement under domestic healthcare plans due to its cost. 

The decision was made in spite of findings from China’s National Health Commission that detail the drug’s usefulness in treating patients in the early and intermediate stages of infection. Skyrocketing demand for the medicine has made it almost impossible to legally obtain in China, and black market scalpers regularly fetch tens of thousands of yuan for a box.

Is Pfizer asking too high a price for Paxlovid?

Details of China’s negotiations with Pfizer were not publicly released. An article published by Chinese media conglomerate Tencent cited an insider source as saying that an offer to sell Paxlovid for 700 yuan ($104) per course was rejected. Neither side has confirmed the statement.

Pfizer CEO Albert Bourla mentioned the negotiations at the J.P. Morgan Healthcare Conference held on Jan. 9. He noted that Paxlovid prices are based on the income levels where it is sold. “They (China) want it lower than the lowest of the middle, and we didn’t agree,” Bourla said. “They are the second highest economy in the world, and I don’t think that they should pay less than El Salvador.”

Paxlovid received emergency approval from the State Food and Drug Administration on Feb. 11, 2022, with the first batch of 21,200 boxes selling for 2,300 yuan per course the following month. One course includes 30 tablets meant to be consumed over five days.

Before the latest round of negotiations began, the People’s Daily, a government-aligned newspaper, reported that the price for a course of Paxlovid under a government healthcare plan had dropped from 2,300 yuan to 1,890 yuan. If patients were able to obtain maximum reimbursement, their out-of-pocket payment would only be 189 yuan per course. 

Some countries have purchased Paxlovid directly with national funds to minimize the costs for patients. The U.S. has ordered 10 million doses priced at around $530 (3,700 yuan) per course, offered free to eligible patients who test positive for COVID. The German Federal Ministry of Health purchased 1 million doses at a cost of 500 euros per course (3,640 yuan). The governments of Taiwan and Hong Kong bought Paxlovid for about $700 (4,716 yuan) per course.

All these prices are at least a thousand yuan higher than prices in China.

Is China a low or middle-income country?

Several WeChat and Weibo users have claimed that buying Paxlovid without the discounts provided by a licensing agreement signed between Pfizer and the Medicines Patent Pool (MPP) – an international public health agency that works with pharmaceutical companies to provide critical medications poorer countries at low costs to — would place undue financial stress on China’s healthcare system.

The agreement allows generic knockoffs of Paxlovid to be sold royalty-free in low, lower-middle and some upper-middle income countries. According to self-reported World Bank data, China has been listed amongst upper-middle income countries since 2010 and its current GDP per capita of $12,234 places the country near the top of upper-middle income countries. The MPP uses the same data to determine countries’ eligibility to buy their generic Paxlovid. 

And the country appears to have plenty of money on hand. The National Healthcare Security Admission split a bill of over 120 billion yuan ($17 billion) on vaccines with China’s Ministry of Finance since COVID broke out, and still retained a surplus of more than 500 billion yuan ($74 billion) in 2022 alone, according to National Health Insurance Administration data. China has donated an additional $200 million to several international COVID response funds.

China promotes domestically produced medicines

In denying coverage for Paxlovid, China may be opening up market space for local drug companies. 

On Jan. 6, the National Health Insurance Administration issued its Guidelines for Setting COVID Drug Treatment Prices (Trial Implementation). Hu Shanlian, a professor at Fudan University’s School of Public Health, told the People’s Daily that the guidelines will ensure the affordability of COVID medicines produced in China. “Ordinary people will be able to buy these drugs at low cost,” he said. “Domestically produced COVID medication will thus gain a larger market share than imports, due to their cost advantage and effective treatment.”

Just as negotiations with Pfizer broke off, two Chinese-made medications – Azvudine tablets and Qingfei Paidu granules – were cleared to be included as reimbursable COVID medications under national health insurance plans. Azvudine was originally a medication for HIV patients, only approved as a treatment for COVID in July 2022. Qingfei Paidu is a traditional Chinese medicine that lacks data from phase 3 clinical trials that show whether the medication might cause less common side effects in specific groups of people.

Asia Fact Check Lab (AFCL) is a new branch of RFA, established to counter disinformation in today’s complex media environment. Our journalists publish both daily and special reports that aim to sharpen and deepen our readers’ understanding of public issues.

US Nears New Cooperation Deals with Pacific Island Nations

WASHINGTON — The Biden administration is nearing deals with two Pacific Island nations to extend ties that are considered critical to maintaining balance in the U.S.-China rivalry for influence in a region where the Chinese are rapidly expanding their economic, diplomatic and military clout.

This week, the U.S. signed memorandums of understanding with the Marshall Islands and Palau that administration officials hope will pave the way for the quick completion of broader agreements that will govern the islands’ relations with Washington for the next two decades. Those ties grant the U.S. unique military and other security rights on the islands in return for substantial aid.

The administration believes that extending those so-called “Compacts of Free Association” agreements will be key to efforts to retain American power and blunt Chinese assertiveness throughout the Indo-Pacific.

The memorandums signed this week lay out the amounts of money that the federal government will provide to the Marshall Islands and Palau if their compacts are successfully renegotiated. Negotiations on a similar memorandum with a third compact country, Micronesia, are ongoing.

The current 20-year compacts with the Marshall Islands and Micronesia expire this year; the current compact with Palau expires in 2024 but administration officials said they believe all three can be renewed and signed by mid- to late-spring.

Officials would not discuss specifics of the amounts of money involved because the deals aren’t yet legally binding and must still be reviewed and approved by Congress as part of the budget process.

A Micronesian news outlet, Marianas Variety, reported Thursday that the Marshall Islands will receive $700 million over four years under the memorandum that it signed. But that amount would cover only one-fifth of a 20-year compact extension and does not include the amount Palau would receive.

Joe Yun, Biden’s special presidential envoy for compact negotiations, said the amounts will be far greater than what the U.S. had provided in the past.

Islanders have long complained that the previous compacts they signed did not adequately address their needs or long-term environmental and health issues caused by U.S. nuclear testing in the 1950s and ’60s. Lawmakers had expressed concern dating back to 2021 that the administration was not giving enough attention to the matter.

Yun, who signed the memorandums with representatives of the Marshalls and Palau on Tuesday and Wednesday in Los Angeles, said the Marshall Islands would be compensated for such damage and would be given control over how that money is spent.

Yun said it would pay “nuclear-affected communities’ health, welfare and development” and noted that the U.S. had committed to building a new hospital as well as a museum in the Marshalls to preserve the memory and legacy of their role, notably in the Pacific theater during WWII.

This week’s signings clear the way for individual federal agencies — including the Postal Service, the Federal Aviation Administration, the Federal Emergency Management Agency, and the National Weather Service — to negotiate their own agreements with the Marshalls and Palau, which will then become part of the broader compacts.

Along with the federal money, those agencies provide their services to the islands. In return, the U.S. is given unique military and national security basing rights and privileges in an area where China is increasingly flexing its muscles.

Yun said China did not come up specifically in the negotiations, but it was a major element in all sides’ discussions.

“The threat from China is unstated but there is no question that China is a factor,” Yun said. Not only does China have a large and growing economic presence in the region, but the Marshall Islands and Palau both recognize Taiwan diplomatically. “They are coming under Chinese pressure,” he said.

China has steadily poached allies from Taiwan in the Pacific, including Kiribati and the Solomon Islands in 2019. The U.S. announced plans last year to reopen an embassy in the Solomon Islands, which has signed a security agreement with China.

Since World War II, the U.S. has treated the Marshall Islands, along with Micronesia and Palau, much like territories. On the Marshall Islands, the U.S. has developed military, intelligence and aerospace facilities in a region where China is particularly active.

In turn, U.S. money and jobs have benefited the islands’ economy. And many islanders have taken advantage of their ability to live and work in the U.S., moving in the thousands to Arkansas, Guam, Hawaii, Oregon and Oklahoma.

Source: Voice of America

Philippines To Harness Mining As Potential Economic Driver

MANILA, The Philippines will harness the mining sector’s potential, as a driver for long-term economic expansion, as the country recovers from the COVID-19 pandemic, Philippine Finance Secretary, Benjamin Diokno, said in a statement yesterday.

“The mining industry holds the greatest potential to be a key driver in our recovery and long-term growth, especially now that the world metal prices are high,” Diokno said.

After all, he said, the Philippines is one of the world’s most richly endowed countries, in terms of mineral resources. “As such, we will harness the potential of the extractive sector to drive long-term economic expansion,” he noted.

Diokno said, the government is revisiting areas where it can enhance the policy environment and explore new opportunities, for high and broad-based growth, aligned with emerging trends in the global economy.

Aside from mining, Diokno said, the Philippines is committed to making the country competitive in the semiconductor and electronics industry, which is the top contributor to the Philippines’ manufacturing sector, and represents the country’s largest export sector. He expressed optimism that the sector’s output will expand in the next 12 months.

Diokno said, the Philippines is also pursuing an energy transition and has opened up the renewable energy sector to full foreign ownership. A more liberalised renewable energy sector will quicken the country’s transition towards a clean, affordable and desirable mix of energy sources, creating more green jobs.

In Nov last year, Philippine President, Ferdinand Romualdez Marcos, directed the Department of Environment and Natural Resources to sharpen its regulatory powers on small- and large-scale mining. Marcos said he wants to legalise the operation of small-scale mining firms.


Cambodia Recorded 1.8 Percent Rise In Rubber Export Last Year

PHNOM PENH, Cambodia exported 372,900 tonnes of dry rubber in 2022, an increase of 1.8 percent from 366,300 tonnes a year earlier, a General Directorate of Rubber reported, yesterday.

The kingdom made 527.7 million U.S. dollars in revenue from exports of the commodity last year, down 12 percent from 600.7 million dollars in the year before, the report said.

“A tonne of dry rubber averagely cost 1,415 U.S. dollars in 2022, about 225 dollars lower than that of 2021,” Him Oun, director general of the General Directorate of Rubber, said, in the report.

The country exports the commodity mainly to Malaysia, Vietnam, Singapore and China.

Cambodia has so far planted rubber trees on a total area of 404,578 hectares, in which the trees on 315,332 hectares, or 78 percent, are old enough to be tapped, the report said.


Brunei Recorded 7.1 Percent Total Trade Increase In Oct

BANDAR SERI ,Brunei recorded 2,477.5 million Brunei dollars (1,871.2 million U.S. dollars) total trade for Oct, 2022, a 7.1 percent year-on-year increase, contributed by a rise in import value.

The latest International Merchandise Trade Statistics, released yesterday by the Department of Economic Planning and Statistics, at the Ministry of Finance and Economy, showed that, Brunei’s exports in Oct, decreased by 2.5 percent yearly to 1,302.9 million Brunei dollars, which was mainly due to the decrease in mineral fuel exports.

Imports increased from 975.9 million Brunei dollars in Oct, 2021, to 1,174.6 million Brunei dollars, in Oct, 2022.

The highest share of exports in Oct, 2022, went to China (25.7 percent), followed by Australia (18.4 percent) and Japan (17.6 percent). The largest export commodity to China was chemicals, whereas to Australia and Japan were mineral fuels.

The highest share of imports was from the United Arab Emirates (37.0 percent), followed by Malaysia (23.8 percent) and Qatar (12.3 percent), with mineral fuels as the largest import commodity. (1 Brunei dollar equals about 0.76 U.S. dollars).


Cambodia Forecasts 4.6 Million Air Passengers In 2023, After China’s Reopening: Spokesman

PHNOM PENH, Cambodia is expected to attract 4.6 million air passengers in 2023, after China’s optimisation of its pandemic control policies on Jan 8, a spokesman said, today.

State Secretariat of Civil Aviation’s Undersecretary of State and Spokesman, Sin Chansereyvutha said, the nation received 28,900 flights with 2.38 million passengers last year.

“For 2023, we predict that the number of air passengers will be doubled, thanks to China’s reopening,” he said.

“Cambodia is ready to welcome the return of Chinese people, tourists, business people and investors, as they are key contributors to tourism and socio-economic development in the kingdom,” he added.

Chansereyvutha said, currently, 27 airlines, including six airlines from China, have been operating flights in and out of Cambodia.

“We expect that there will be more airlines and flights from China in the near future,” he said.

Cambodian Tourism Minister, Thong Khon, said, the kingdom is projected to attract at least one million Chinese tourists in 2023, an expected increase from merely 110,000 in 2022.

“China is the most important outbound tourism market for the world, so China’s resumption of outbound tourism is very beneficial not only to Cambodia, but also to the whole world,” he said.