China's National Health Care Security Administration has added 90 new drugs to the country's National Reimbursement Drug List (NRDL) in late November 2024, marking a significant expansion of coverage for innovative therapies across multiple therapeutic areas. The updated list, which takes effect January 1, 2025, demonstrates unprecedented support for cutting-edge treatments while balancing patient access with cost considerations.
Record-Breaking Innovation Focus
The 2024 NRDL update represents a watershed moment for innovative drug access in China. Among the 91 newly added drugs, 38 are classified as "global new" innovative drugs, achieving both the highest proportion and absolute quantity in the program's history. The negotiation success rate for innovative drugs exceeded 90%, which is 16 percentage points higher than the overall success ratio, demonstrating what officials describe as "strong support for true innovation."
The therapeutic focus of the new additions reflects China's commitment to addressing critical unmet medical needs. Approximately 25% of the 90 new drugs target cancer treatments, while 16% address chronic diseases like diabetes, and 14% focus on rare diseases. All newly added drugs have been marketed in China within the last five years, ensuring patients gain access to the most current therapeutic options.
Expanded Coverage and Market Impact
The NRDL now encompasses over 3,160 drugs, with about 1,770 being chemical and biological drugs, while the remainder consists of Chinese medicines with patents and traditional Chinese medicines. This expansion occurred alongside the removal of 44 drugs from the list, reflecting the administration's ongoing efforts to optimize coverage.
The inclusion process requires a delicate balance between patient access and cost management. While NRDL listing significantly increases the potential patient population eligible for reimbursement, manufacturers must typically reduce drug prices to secure inclusion. This pricing pressure has led some foreign makers of innovative drugs to opt out of NRDL listing, highlighting the complex dynamics between market access and pricing strategies.
STAR Market Companies Benefit
Several companies pursuing STAR Market listings through the 5th listing standard achieved notable success in this negotiation cycle. Dizal (Jiangsu) Pharmaceutical Co., Ltd., Shanghai Yizhong Pharmaceutical Co., Ltd., and Suzhou Zelgen Biopharmaceuticals Co., Ltd. secured their first NRDL inclusions, while Shanghai Junshi Biosciences Co., Ltd. and Frontier Biotechnologies Inc. also benefited from the negotiations.
Dizal Pharmaceutical's achievement is particularly noteworthy, having registered approval for two innovative drugs in China and successfully negotiated both into the NRDL within just over a year. This rapid progression demonstrates what officials characterize as "the strong development momentum of new quality productive forces in the pharmaceutical field on the STAR Market."
Industry Investment and Development
The pharmaceutical innovation landscape in China continues to show robust growth, with innovative drug companies on the STAR Market maintaining substantial research and development commitments. In the first three quarters of 2024, these companies invested RMB 20.141 billion in R&D expenses, representing a 5.90% increase over the same period in 2023. This investment level accounts for 43.81% of operating income, significantly exceeding the overall average for A-share companies during the same period.
The National Healthcare Security Administration, established in 2018, has positioned itself as the largest buyer in China's domestic innovative drug market. Through medical insurance negotiations, the administration promotes "quantity-price exchanges" that can increase sales volumes for innovative drugs while reducing patient financial burden.
Policy Implications
The 2024 NRDL update reflects China's strategic approach to balancing innovation support with healthcare cost management. As the administration noted, innovative drugs represent "the frontier field and innovation track of the biomedical industry featuring large R&D investment, long periods and high risks." The inclusion of numerous high-quality innovative drugs in the reimbursement catalog signals strong policy support for continued pharmaceutical innovation while ensuring broader patient access to advanced treatments.
