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(Bloomberg) -- China is starting to approve new medicines at an unprecedented pace this year, opening the floodgates for innovative therapies to enter the country and potentially turbo-charging growth for multinationals in the world’s second-largest pharmaceutical market.

Over the past few weeks, the China Food and Drug Administration has approved AstraZeneca Plc’s Tagrisso for lung cancer, Roche Holding AG’s melanoma drug Zelboraf and Boehringer Ingelheim GmbH’s lung cancer therapy Gilotrif.

Long criticized for being slow to approve life-saving medicines, the Asian country is speeding up its regulatory process to battle surging rates of diseases like cancer and hepatitis. The reforms have the potential to breathe new life into the growth prospects for foreign drugmakers in China, a market where they have largely relied on older products.

But even as innovative blockbusters make an entrance, their manufacturers face further hurdles as the government attempts to drive down drug prices in its public health insurance system, which provides basic coverage for more than 95 percent of its 1.4 billion people.

“Most MNCs are optimistic about getting approval for their drugs, but funding is still an issue,” said John Wong, chairman of Greater China at Boston Consulting Group. “So I don’t think it will have a big near-term impact, but could have significant impact over five years.”

The China Food and Drug Administration didn’t immediately respond to requests for comment.

Drug Lag

Foreign drugmakers have historically had to wait several years to bring treatments already approved in other countries into China. In recent years, many Chinese patients have traveled abroad to buy cancer therapies and some even purchase raw ingredients online when therapies aren’t available at home.

The number of reviewers at China’s Food and Drug Administration who scrutinize drug applications rose to 600 at the end of last year from 120 in 2015, and the volume of backlogged applications was cut by two-thirds, Bi Jingquan, minister of the CFDA, said at a press conference in late February.

AstraZeneca’s Tagrisso, estimated to become a global blockbuster next year, was among the first to benefit from the reforms. Its application process in China took only seven months, according to the company. AstraZeneca declined to comment on prices for the treatment in China, saying it will be set by the market.

Meanwhile, heptatis C patients in China still don’t have access to a class of highly effective antivirals, including Gilead Sciences Inc.’s Sovaldi and Bristol-Myers Squibb Co.’s Daklinza, which have been widely available elsewhere since 2014. Gilead didn’t immediately respond to requests for comment.

Price Pressures

Daklinza and another Bristol-Myers hepatitis drug, Sunvepra, were granted priority review status last April, according to the company. “The review is ongoing; thus far, it has been a smooth and collaborative experience,” Bristol-Myers said in an emailed statement.

The U.S. drugmaker said it hasn’t set prices for the treatments in China, and after approval will work with key stakeholders to make its medicines accessible to patients and to secure insurance reimbursement.

China, meanwhile, has waged an aggressive campaign to restrict health-care costs. The government last year announced that it had negotiated price cuts of more than 50 percent for three medicines, including GlaxoSmithKline Plc’s hepatitis drug Viread and AstraZeneca’s lung cancer treatment Iressa, which were later placed on the national insurance list for reimbursements.

“Market approval is only step one of market access,” said Franck Le Deu, senior partner at consultancy McKinsey & Co. “Pricing and reimbursement is still a major unknown, although some positive signs are emerging.”

--With assistance from Caroline Chen

To contact Bloomberg News staff for this story: Li Hui in Beijing at hli355@bloomberg.net, Naomi Kresge in Berlin at nkresge@bloomberg.net.

To contact the editors responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net, Chitra Somayaji

©2017 Bloomberg L.P.

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