BEIJING (BLOOMBERG) - Drugmakers including AstraZeneca and Roche Holding agreed to cut prices of some of their newest innovative drugs in China by an average of 61 per cent as the government expanded the number of treatments covered under national insurance.

Some 70 new therapies were added for coverage by China's state-run medical insurance fund after months-long negotiations over prices, according to a notice on the National Healthcare Security Administration's website on Thursday (Nov 28).

The drugs that made it onto the list included AstraZeneca's Roxadustat, an anaemia medicine that was approved in China ahead of the US, and Roche's lung cancer treatment Alecensa. Other Western medications added were hepatitis C treatments from Gilead Sciences Inc and Merck & Co, and AbbVie Inc's Humira injection pen for rheumatoid arthritis. There are more than 2,700 medicines on the list after the latest adjustments.

Both domestic drugmakers and multinational giants are eager to get their treatments on the list even at steep discounts in order to gain access to the US$132 billion (S$180 billion) pharmaceutical market, the world's second biggest. Beijing is on a mission to bring the best therapies to its growing middle class as quickly and cheaply as possible.

Regulators are speeding up reviews to meet consumer demand. China is home to the world's most diabetes patients, nearly four million new cancer patients and an ageing population.

The negotiated price cuts made the imported drugs "the cheapest in the world", the notice said. Three hepatitis C treatments dropped prices by an average of more than 85 per cent while tumour and diabetes therapies fell by an average of 65 per cent.

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Chinese drugmakers' shares slumped on Thursday due to the magnitude of the price cuts. CSPC Pharmaceutical Group Ltd slipped as much as 2.4 per cent and Innovent Biologics Inc fell as much as 3.2 per cent before paring losses in afternoon Hong Kong trading.

"The drugmakers are falling on the news about the national reimbursement list. It shows that they need to lower prices meaningfully to be able to join the list," said Kelvin Chen, an analyst at Bocom International.

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The 2.34 trillion yuan (S$454.67 billion) national medical insurance fund, which covers 95 per cent of 1.4 billion Chinese, is demanding deep price cuts to avoid bankrupting the safety net.

That in turn has put pressure on foreign drugmakers. New drugs are often brought to the China market at prices lower than they are sold in the West, but still face competition from a growing legion of Chinese biotech firms developing similar drugs that can be sold even cheaper.

Global pharmaceutical companies' older drugs that have gone off-patent are also facing price cuts. In a separate national campaign in which China's public hospitals bulk-buy generic medications, prices have been driven down by as much as 90 per cent.