NRDL+ 2024 Annual Executive Debrief: The State of Access for Innovative Medicines in China

In this inaugural annual NRDL+ debrief, we comprehensively examined pivotal developments and trends across basic medical insurance schemes, the commercial health insurance sector, and the provider sector. These developments and trends have a significant impact on pricing and access to innovative medicines in China, making this debrief a must-read for anyone interested in the Chinese market.

Section One: Three key trends based on China's Basic Medical Insurance (BMI) data and their ecosystem implications

We commence our Debrief by analyzing trends derived from China's Basic Medical Insurance (BMI) data and their implications within the ecosystem, offering crucial insights into the trajectory of healthcare reform in China.

Section Two: Innovative Medicines and Basic Medical Insurance Schemes

The National Reimbursement Drug List (NRDL) stands as a critical pathway for manufacturers aiming to reach China’s vast 1.4 billion population.

Unlike developed economies in Europe and the US, where mature healthcare systems primarily hinge on pricing and meeting local conditions for market access, China is actively implementing systemic and linkage reforms to maintain a balance among medical care, medical insurance, and medicine.

Thus, in our discussion on basic medical insurance schemes, we analyzed critical pricing trends and recent reform initiatives concerning access to innovative medicines at the system/BMI fund and product levels. We've also explored the implications of these trends for manufacturers.

At the BMI fund level:

• Trends in BMI funding for innovative medicine
• The proposed framework for adjusting drug prices based on value
• Reforms in outpatient coverage

At the product level:

• Recent updates to renewal rules for NRDL-negotiated drugs
• Product-level pricing practices and trends
• New NHSA proposal on drug launch prices

Section Three: Commercial Health Insurance Sector Innovations

With anticipated low single-digit GDP growth in the coming years, the expansion of China's basic medical insurance fund is expected to slow. Consequently, the Chinese government has heightened its emphasis on the essential role of commercial health insurance (CHI), especially in ensuring coverage for advanced health technologies.

Despite policy incentives and significant opportunities for payment innovations that could transform access to innovative medicines in the country, the growth of commercial health insurance in China remains slow. However, there are some encouraging signs of progress.

In this segment, we discussed the following:

• China's commercial health insurance landscape
• Recent policies designed to spur the growth of commercial health insurance in China
• One key factor, seldom addressed in either Chinese or Western media, that has hindered the role of commercial health insurance in financing access to innovative medicines
• Positive market dynamics introduced by Huiminbao, a city commercial health insurance positioned between basic medical insurance and pure commercial health insurance
• 3 Key challenges facing Huiminbao
• The recent policy push for long-term Huiminbao and why it is crucial for innovative medicine
• A pivotal opportunity for collaboration between innovative drug makers and commercial insurers
• A fundamental principle that both manufacturers and commercial insurers must adhere to when experimenting with payment innovations

Section Four: Provider Sector Developments Impacting Access to Innovative Medicines

The initial part addressed two connected reform efforts: DRG/DIP payment reform and the revamping of medical service pricing. The latter half covered new reforms aimed at enhancing access to public hospital formularies by NRDL-negotiated drugs.

• The progress and future stages of DRG/DIP implementation and keys to success
• Companion policy development for technology innovation under the DRG/DIP framework
• The pivotal importance of reforming medical service pricing within China's comprehensive healthcare reform endeavors
• The Dual-Channel policy for NRDL-negotiated drugs and its current implementation status
• Recent technology and policy initiatives to boost prescription outflows from hospitals to Direct-To-Patient (DTP) pharmacies for Dual-Channel drugs

Format and Length

In addition to a concise PowerPoint summary of recent key developments and their implications for manufacturers, each section in the Debrief includes an "additional reading" segment cataloging our exclusive in-depth analysis articles on relevant subjects.

In total, the inaugural annual executive debrief comprises 51 slides and 16 original deep-dive articles, providing a comprehensive understanding of the evolving landscape of innovative medicines in China.