China lowers price of 70 drugs by expanding national insurance catalogue

China has added 70 medicines to its national medical insurance catalogue, which will reduce the cost of the drugs by more than 60% on average, the National Healthcare Security Administration (NHSA) has said.

In an announcement on Friday, November 29, the NHSA said the price drop comes after “months-long” price negotiations with authorities, and will take effect on January 1.

Of the 70 agreed treatments, 22 are for the treatment of cancer.

“The administration has been actively negotiating with pharmaceutical companies to lower the prices of their products and reduce the financial burden on patients as part of the country's healthcare reform.

“In return, drugmakers will get their products onto the national insurance list, which helps increase sales volume,” the NHSA said.

Xiong Xianjun, head of the administration's medical service department, said some drugmakers had agreed to provide their drugs for the “lowest prices in the world for Chinese patients”.

Additionally, he said it was estimated that due to the major price cuts, the out-of-pocket amounts paid by patients will drop by between 80 and 95 percent," he said.

The NHSA said the country’s cancer patients are in urgent need of affordable treatment and are discouraged by prohibitive prices. As a result, some have resorted to purchasing generic, cheap versions from overseas to sustain treatment.

The newly-added cancer drugs include a foreign medication—Jakavi—that treats myelofibrosis, an acute form of bone marrow cancer, developed by Novartis.

Deng Yuexin, head of the market access department at Novartis Oncology in China, said the medication, priced at about 8,000 yuan ($1,138) for 60 tablets, will be sold at the world's cheapest price in China.

The company said it could not reveal how much of a discount it has granted to the Chinese market due to a confidentiality agreement with Chinese authorities.

"Last year, we failed to reach an agreement with the administration during the price negotiation due to shifts in our global market expansion strategy, which had saddened many of our Chinese patients," she said. "This time, they are bound to be over the moon."

Eight homegrown drugs also made it to the list, including Tyvyt, which targets lymph cancer. It was developed by Suzhou-based Innovent Biologics.

He Shiwen, an employee at Innovent, said the price of Tyvyt has been reduced by 64%.

"Even before the price cut, Tyvyt was significantly cheaper than its counterparts available on the Chinese market. The medication is now even more affordable for patients," he said.

Agreements have also been renewed for another 27 products already on the list, with an average price cut of 26.4 percent, Xianjun said.