Chinese regulators approved inclusion of 17 anti-cancer drugs under the national medical insurance coverage following price negotiations with pharmaceutical companies.

The State Medical Insurance Administration said in a notice on its website that provincial regulators will come up with detailed rules regarding reimbursement of the medicines.

Inclusion in the reimbursement list is seen as key to a drug's commercial success in China as without the state reimbursement, patent-protected brand medicines become out of reach for most patients.

The additions will be implemented by the end of November and will remain valid until Nov. 30, 2020.

The regulator also said it may amend the guidance if generics of some of the drugs listed become available before November 2020 so that the cheaper options can be reimbursed.

Further negotiations will be carried out with pharmaceutical companies to include more anti-cancer drugs for reimbursement as part of efforts to ease disease burden on patients, the notice added.

The 17 reimbursed medicines include blood cancer chemotherapy azacitidine among others. The drug is sold under the brand name Vidaza and is manufactured by Summit, N.J.-based Celgene Corp.

Other notable therapies include non-small cell lung cancer treatments crizotinib, anlotinib, ceritinib, osimertinib and afatinib.

Crizotinib is sold as Xalkori by Pfizer Inc. and Novartis AG manufactures ceritinib under the trade name Zykadia.

Novartis tops list

Prices of the 17 anti-cancer drugs will be 57% lower on average following the price negotiations, deeper than the 44% average price cut in 2017 when regulators added 36 high-priced innovative drugs to the national reimbursement list, Hong Kong-based senior research analyst at ICBC, Zhang Jialin, told S&P Global Market Intelligence in an email.

Swiss drugmaker Novartis had the most cancer treatments added to the list this year at four, followed by Pfizer with three, Zhang said.

"We expect this kind of negotiation to continue in the future and as the biggest bill payer, the State Medical Insurance Administration would keep increasing oncology drugs accessibility for patients and better allocate medical insurance resources for these innovative drugs," Zhang said in the email.

Kay Mai, a Shenzhen-based analyst at Chinese securities firm Guotai Junan International, told S&P Global Market Intelligence that the government's support for innovative drugs through policy changes could harm domestic pharmaceutical companies, as they mostly make generic drugs.

"Foreign drugmakers will quickly obtain market share with support from the government’s policy changes," she said. However, the inclusion of innovative drugs under national medical insurance system will continue and is inevitable, she added.

As part of its drive to make cancer drugs easily available to the people, China in May took out a list of imported drugs to be exempted from tariff and also lowered the value-added-tax on cancer medicines to 3% from 16% earlier.