As a result, companies made significant reductions, with the prices of the three drugs selected falling by more than 85 percent on average, he said.

Hu Shanlian, a professor in public health at Fudan University in Shanghai, who took part in the negotiations last year, said the National Healthcare Security Administration set up a special team of about 40 experts to assess prices of drugs in the negotiations.

Beforehand, the experts provided the health administration with prices for each drug for reference, based on a number of factors, including China's economic development, the number of patients with a certain disease, and the prices of the drugs in some other countries, he said.

After the negotiations, the price of Sintilimab, an injected drug used to treat Hodgkin's lymphoma — a lymph gland cancer — that became available on the domestic market early last year, fell by nearly 64 percent. The drug was developed by Innovent, a pharmaceutical company in Suzhou, Jiangsu province.

Xi Hao, Innovent's chief financial officer, said the company was encouraged to cut the drug's price, with an eye to profits.

Despite the reductions, including the drug in the basic healthcare insurance program will help increase its sales, which will lead to increased production and reduced manufacturing costs.

Liu Hongsheng, an official from the Jilin Provincial Social Security Administration, said negotiations in recent years have resulted in considerable price reductions for a number of drugs. This means that more patients with serious or chronic diseases can access better-quality medication at lower prices.

He said the authorities should continue to conduct negotiations to reduce prices, and measures should be taken to guide domestic pharmaceutical companies to improve innovation.

To ensure the quality of drugs, authorities should not lower prices too much, to avoid producers using substandard materials, he added.