China Sets Price Restrictions on Some Drugs

China set new price restrictions on some pain, fever and respiratory drugs, as leaders attempt to overhaul the country's health-care system and make medicines, including Western brands, more affordable.

Retail-price cuts of up to 20% will be implemented February on 400 drugs used for respiratory diseases, pain relief and specialized medicines, the National Development and Reform Commission, China's main economic planning agency, said on its website on Tuesday.

Cuts will include products from Pfizer Inc. (PFE), Novartis AG (NVS, NOVN.VX) and Merck & Co. (MRK), according to the planning agency's information.

The price cuts, fourth in a series since 2011, come just days after China's Health Minister Chen Zhu announced in a health-care conference that health care in the country is still too expensive.

China's leaders, aiming to address the needs of an aging population and a rise in chronic disease, have been overhauling the country's health-care system, expanding the national insurance system and mandating drug cuts in attempt to make doctor visits and pharmaceuticals more accessible.

The previous cut, affecting some cancer and blood related drugs, was implemented in October.

Chinese price restrictions in recent years have phased out premium pricing on drugs and squeezed pharmaceutical companies' profits. Many companies are looking for alternative ways to make money in China, where health-care spending in China is forecast to triple to $1 trillion by 2020 in a recent report from consulting firm McKinsey & Co.

The world's most populous country is projected to become the third-largest pharmaceutical market this year, behind the U.S. and Japan, according to McKinsey & Co.

Write to Laurie Burkitt at laurie.burkitt@wsj.com

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China Sets Price Restrictions on Some Drugs