February 23, 2017 / 5:16 AM / 5 months ago

China updates key drug list in boost for Big Pharma

4 Min Read

Shelves displaying medicines are seen at a pharmacy in Shanghai, China November 27, 2015.Aly Song/File Photo

SHANGHAI (Reuters) - China has updated list of medicines covered by basic medical insurance schemes, a long-awaited fillip for drugmakers in the world's second-largest drug market where many new drugs have been kept out of patients' reach because of high costs.

The new list of reimbursable medicines, the first update in eight years, includes blockbuster drug compounds to treat major illnesses such as cancer, hepatitis and hemophilia.

High drug costs and a lack of access to the most recent treatments is a major flashpoint in China, where patients often are forced to resort to risky gray markets to get cheaper medicines.

The list includes 2,535 Western and traditional Chinese medicines, 339 more than the most recent update of the list in 2009, the Ministry of Human Resources and Social Security said in a statement on Thursday. The number of Western-style medicines included rose by 133 to 1,297.

Reuters reported in January that China was set to add more than 300 modern and traditional drugs to the list.

Added to the list are compounds such as tenofovir disoproxil, a hepatitis B drug sold as Viread by GlaxoSmithKline PLC as well as gefitinib, a lung cancer drug sold as Iressa by AstraZeneca PLC.

"We are pleased to see the publication of the update to the NRDL which will greatly improve the access and affordability of innovative medicines," a GSK spokesman said.

"We have already seen a major increase in the uptake of our Hep B medicine (Viread) since reducing its price by 67 percent last year and inclusion in the NDRL will drive further access around the country."

Dublin-based drugmaker Shire PLC, whose hemophilia treatment ADVATE will also benefit from the list update, said it welcomed the announcement which signaled "the lifting of restrictions" for its own and similar treatments.

"This change means that both pediatric and adult patients with hemophilia in China will now be able to gain broader access to treatment with ADVATE," said Peter Fang, Shire's head of Asia Pacific in emailed comments.

FILE PHOTO: A customer shops at a pharmacy in Xuchang, Henan province, China March 8, 2014.Stringer/File Photo

AstraZeneca did not immediately respond to requests for comment.

Patient Burden

The ministry said the move would reduce the financial burden on patients and help support innovation and development in China's pharmaceutical market.

Inclusion on the NRDL means a drug is accessible via state insurance schemes, making it affordable to the mass market. Any new drug approved for sale since the last update of the list in 2009 was until now largely paid for out-of-pocket by patients.

Drugs on the list can be reimbursed up to 80 percent depending on local implementation.

"For pharma companies this is definitely a boost," said Andrew Chen, Shanghai-based partner at Parthenon EY. However, addition to the list does not come for free, he added.

"Once your drug becomes reimbursed, your volumes will go up, but your pricing will have to go down, meaning slimmer margins."

The ministry said there were also 45 "negotiable" drugs that were expensive but that had high clinical value. It added there would be further discussion about these, after which a further list would be announced.

It also called for provinces to publish regional lists by July 31, which should stick closely to the national list.

The delayed update to the NRDL, which determines which drugs are part state-sponsored, is a welcome tonic for global drug companies, most of whom saw China sales growth slow or contract last year.

Reporting by Adam Jourdan in SHANGHAI and Clara Ferreira Marques in SINGAPORE; Editing by Stephen Coates and Christopher Cushing

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