China Local Pilots Expedite Access to Innovative Medicine

On April 7th, the Beijing Municipal Healthcare Security Bureau, a key regulatory body in the healthcare sector, announced the release of "Beijing Municipal Healthcare Security Bureau and Other 9 Departments Measures for Supporting High-Quality Development of Innovative Medicine (2024) (Draft for Soliciting Opinions)."

Simultaneously, Guangzhou and Zhuhai unveiled similar initiatives: Guangzhou's "Measures for Promoting High-Quality Development of the Bio-Pharmaceutical Industry in Guangzhou Development Zone (Huangpu District)" and Zhuhai's "Several Measures for Promoting High-Quality Development of the Bio-Pharmaceutical and Health Industries in Zhuhai (Draft for Soliciting Opinions)."

Beijing's measures aim to expedite clinical studies and expand payment options via commercial health insurance. Guangzhou and Zhuhai, on the other hand, prioritize fostering a supportive industry environment through increased financial support. All regions have implemented measures to encourage listing innovative drugs and devices in hospitals.

Supporting Clinical Research

Beijing aims to significantly reduce the timeframe to initiate clinical trials to 28 weeks and shorten the IND (Investigational New Drug application) approval process from 60 to 30 days. The city also promotes the use of healthcare data to drive R&D innovation, including extending the use of shared electronic medical records for both inpatient and outpatient services for research and development by innovative pharmaceutical companies.

Meanwhile, Guangzhou and Zhuhai persist in the country's longstanding strategy of leveraging fiscal support to bolster innovative pharmaceuticals. Specifically, Guangzhou provides substantial funding to leading biopharmaceutical projects directed by globally recognized experts and strategic scientists. These projects, known for their revolutionary technological breakthroughs and clear, expansive application potential, can receive up to 5 billion yuan in support over a maximum of five years.

Expanding Payment Channels for Innovative Drugs and Devices

Beijing's proposal is unique in its approach to expanding payment models through the use of commercial health insurance.

Insurance Product Innovation

The city urges commercial insurers to partner with medical institutions and life sciences manufacturers to create specialized health insurance products. These products are designed to cover innovative medical technologies and health management services, focusing on meeting specific healthcare needs.

Additionally, the proposal advocates for stakeholder cooperation among commercial insurers, innovative drug and device firms, healthcare providers, and designated pharmacies to streamline the claims process and enable direct settlements under commercial health insurance covering innovative medicines.

To bolster these efforts, the city is exploring methods to share medical and health data with commercial health insurers, aiming to enhance data utilization in product development and claims management.

Beijing Huiminbao

Beijing is also working to develop a dynamic adjustment mechanism for its Huiminbao specialty drug catalog. This mechanism will adjust coverage based on updates to the national reimbursement drug list and the usage of specialty drugs, ensuring the broad inclusion of qualified, innovative drugs. Insured individuals are encouraged to make optimal use of the balances of their medical insurance personal accounts to purchase "Beijing Huiminbao" for themselves and their family members.

Tax Incentives

Additionally, businesses are encouraged to set up supplementary health insurance plans, taking advantage of tax incentives by deducting these costs (up to 4% of last year's total payroll) from their expenses. They are urged to prioritize purchasing all-inclusive commercial supplementary health insurance (e.g., Huiminbao) that includes coverage for innovative medical technologies.

Tackling the "Last-Kilometer" Challenge

Beijing

• Remove the limitations on the quantity of drugs at medical institutions and implement a standardized protocol for Drug Committee meetings. These meetings are required to convene within one month following the release of the negotiated drug list, with a minimum of four meetings annually.
• Diagnosis and treatments involving negotiated drugs and innovative medical devices are exempt from the total budgetary constraints of medical institutions. They are also excluded from metrics evaluating the institution's per capita drug and medical service costs.
• Encourage secondary and higher-level designated medical institutions to secure the supply of negotiated drugs through the "dual channel" system that includes both designated medical institutions and retail pharmacies.
• Cover negotiated drugs used in the outpatient treatment of special diseases under outpatient special disease management, enhancing reimbursement rates. Include high-cost negotiated drugs in a fixed-ratio payment plan to alleviate the financial burden on insured individuals.
• To expedite the clinical use of rare disease medications, implement a "white list" system for rare disease drugs, encompassing these drugs, pilot medical institutions, and designated drug import businesses, establishing a green channel for single approval, multiple imports, and use across various medical institutions. By 2024, the goal is to fully integrate and implement the system for 10 types of RD products.
• Ongoing enhancements to the CHS-DRG payment mechanism specifically exclude qualified innovative drugs and devices from DRG payment bundles and implement separate payments.

Guangzhou (Huangpu)

To tackle the challenge of integrating innovative drugs into hospitals, Guangzhou has implemented a subsidy program for hospitals. The city plans to create and publish a catalog of innovative drugs and medical devices to incentivize healthcare facilities to purchase and use the listed products. For medical institutions above the secondary level, adding an item from this catalog to their hospital listing triggers a subsidy of 200,000 yuan; moreover, they receive an additional subsidy worth 20% of the acquisition cost of the cataloged item. Each hospital is eligible for subsidies of up to 3 million yuan annually.

Additionally, for those drugs that are included in the national medical insurance catalog, Guangzhou motivates medical institutions to organize a Drug Committee meeting within one month of the release of the updated national reimbursement drug list.

Prior to these recent pilot announcements, in July 2023, Shanghai also released "Several Measures to Further Improve the Diverse Payment Mechanism to Support the Development of Innovative Drugs and Devices."

Innovations in China often start locally. These local experiments can potentially pave the way for larger-scale payment and access experimentation for innovative medicines in China.

References:

1. "Beijing Municipal Healthcare Security Bureau and Other 9 Departments Measures for Supporting High-Quality Development of Innovative Medicine (2024) (Draft for Soliciting Opinions)," The People's Government of Beijing Municipality, 2024-4-7, https://www.beijing.gov.cn/hudong/gfxwjzj/zjxx/202404/t20240407_3610906.html
2. "Measures for Promoting High-Quality Development of the Bio-Pharmaceutical Industry in Guangzhou Development Zone (Huangpu District)," Guangzhou Huangpu Municipality, 2024-4-4, http://www.hp.gov.cn/gkmlpt/content/9/9581/mpost_9581901.html#16150
3. "Several Measures for Promoting High-Quality Development of the Bio-Pharmaceutical and Health Industries in Zhuhai (Draft for Soliciting Opinions)," Zhuhai Municipality, 2024-4-1, https://www.zhuhai.gov.cn/hdjlpt/yjzj/answer/35370
4. 三地创新药利好全解析：取消医院用药数量限制、单独支付、全年药事会至少四次……, 2024-4-9, 医药经济报, https://mp.weixin.qq.com/s/iNb3zLnYRgi8liRO5_7MFQ