China's healthcare security authority announced a comprehensive framework to accelerate innovative drug development through the establishment of a commercial insurance catalog that will expand patient access to cutting-edge therapies beyond traditional coverage limits.
The National Healthcare Security Administration and National Health Commission jointly issued the notice on Tuesday, creating a dedicated list for highly innovative drugs and treatments with significant clinical value that are not covered by the nation's basic medical insurance program.
Addressing Coverage Gaps in China's Healthcare System
The initiative addresses a critical gap in China's healthcare coverage, where basic medical insurance covers 1.326 billion people with cumulative spending reaching 2.97 trillion yuan ($414.6 billion) last year. However, funding limitations have prevented coverage of advanced treatments that exceed the program's capacity.
"As a result, it is essential to uphold the program's role as a safety net for basic medical needs," said Huang Xinyu, head of the administration's medical services management department. Nearly 1 billion people have enrolled in the residents' insurance program, with an average premium of 1,070 yuan, about two-thirds of which is covered by financial subsidies.
Huang noted that advances in medical science and technology have produced highly effective and innovative treatments that exceed the coverage capacity of basic medical insurance, leaving them off the reimbursement list.
Commercial Insurance Integration Strategy
The new commercial insurance catalog will be recommended for adoption by commercial health insurance programs, medical aid programs and other healthcare insurance plans. China's commercial health insurance industry recorded 977.3 billion yuan in original premium income last year, marking year-on-year growth of 8.2 percent.
"We believe that establishing a commercial healthcare insurance list for innovative drugs will help clarify the scope of coverage under the basic plan and create more room for the development of commercial plans," Huang said. The move is expected to consolidate funds from basic and commercial insurance programs, strengthening public health protections while supporting the innovative drug sector.
Streamlined Application Process
The administration will formulate the new list with active participation from insurance industry experts who will hold substantial decision-making authority. Enterprises will be able to apply for inclusion on both the basic and commercial insurance lists simultaneously, with procedures designed to remain similar to reduce administrative burdens.
"The formulation and adjustment of the list will reflect full respect for the market entity status of commercial insurers," Huang said.
Track Record of Innovation Support
Drug innovation has been a priority in the administration's annual adjustments to its basic reimbursement list in recent years. Wang Guodong, an official with the administration, reported that 149 innovative drugs have been added to the list since 2018, representing 17 percent of all additions.
For drugs added to the list following price negotiations with manufacturers, which are often classified as innovative medicines, the national insurance fund spent 410 billion yuan on them by the end of May. Their inclusion is estimated to stimulate over 600 billion yuan in drug sales, Wang said.
International Expansion Support
To support the overseas expansion of homegrown innovative drugs, the administration plans to align with international practices and implement confidential pricing negotiations on a voluntary basis for pharmaceutical companies, particularly for drugs listed in the commercial catalog, said Wang Xiaoning, another official within the administration.
