Drugmakers agree to cut prices of new therapies on China’s list

Drugmakers from AstraZeneca PLC and GlaxoSmithKline PLC to BeiGene Ltd. agreed to cut prices on some of their newest drugs in China by an average of 51% to be covered by the country’s national insurance fund.

A total of 119 new therapies — treating ailments from pulmonary diseases and diabetes to cancers and lupus — were added for coverage by the state-run medical safety net after drawn-out negotiations, the National Healthcare Security Administration said in a notice posted on its website Monday.

The average price cut is 10 percentage points less than last year, a relief to both domestic and foreign drugmakers that have seen their profits eroded by Beijing’s push to drive down health care costs. Companies are eager to get their treatments on the list even at steep discounts to gain access to the world’s second-biggest market for pharmaceuticals.

Patients in China will need to pay for only a small fraction of the cost of these drugs out of their own pockets as the lion’s share of the bill will be footed by China’s $373 billion national medical insurance fund, which covers more than 95% of the country’s 1.4 billion people. The list of medicines covered by the fund has been updated annually with new entries since 2017, when Beijing accelerated its campaign to bring new drugs to its growing middle class as quickly and cheaply as possible.

In total, Chinese patients can now draw on state insurance to pay for 2,800 medicines. Beijing also managed to slash prices more than 40% on average for 14 drugs whose annual sales exceed $150 million each. The new version of the drug-reimbursement list will be effective from March 1.

The drugs that made it on the latest list include AstraZeneca’s cancer therapy Zoladex. Brukinsa, the first cancer drug from China to ever receive U.S. Food and Drug Administration approval, developed by Beijing-based BeiGene, was also added.

Glaxo drugs Benlysta and Volibris, which treat lupus and high blood pressure in the lungs, respectively, made the list.

(AP) The AstraZeneca building in Shanghai, China, is shown in this file photo. Drugmakers including AstraZeneca Plc have agreed to cut prices on some of their newest drugs in China by an average of 51% to be covered by the country’s national insurance fund.