25 mentions of "Medical," 11 mentions of "Pharmaceuticals": Exploring New Opportunities in the Medical Sector through the 2026 Government Work Report

On the morning of March 5, 2026, the opening session of the fourth meeting of the 14th National People's Congress was held in the Great Hall of the People. The State Council's official website released the "Government Work Report (Excerpts)" (hereinafter referred to as the "Government Work Report").VCBeatCombing,Among them, "medicine" was mentioned 25 times and "drug" was mentioned 11 times.

Professor Deng Yong, Professor of Health Law at Beijing University of Chinese Medicine and doctoral supervisor, told VCBeat that the 2026 government work report focuses on the pharmaceuticals and healthcare sector,"Focusing on ensuring basic services, strengthening grassroots efforts, promoting innovation, and building collaboration", deepen the "three-medical" linkage of medical treatment, medical insurance, and pharmaceuticals, covering basic security, grassroots services, drug procurement, and medical insurance payments,Commercial Health Insurance, and other aspects of the development of traditional Chinese medicine have been systematically deployed, providing direction for the deepening of healthcare reform and the high-quality development of the industry.

The full text of the government work report is approximately 20,000 words.VCBeat found that there are six key keywords particularly worth paying attention to in the pharmaceuticals field.

In 2025 and 2026, primary care and essential medical services will remain key priorities.

The government work report introduced that over the past year, China has earnestly focused on livelihood security and actively developed social programs, including the implementation of...Healthcare Foundation Strengthening Project, improve the pediatric and mental health service systems, and establish a long-term mechanism for basic medical insurance participation.

The government work report emphasized the need to make greater efforts to ensure and improve people's livelihood.Strengthen basic medical and health services,Specifically include:

Grassroots and basic levels have always been the key focus of China's healthcare policies. The "Healthy China 2030" Plan emphasizes,Focus on rural and grassroots areas, promote the equalization of basic public services in the health sector, and maintain the public welfare nature of essential medical and health services. The core is to focus on people's health.Adhere to the focus on the grassroots level.

At the same time, the scale of China's primary healthcare market continues to expand. According to data from the Zhiyan Consulting report, this market will grow to 544.5 billion yuan in 2024, increasing by 48 billion yuan compared to 2023. It is expected that the revenue scale of China's primary healthcare market will reach 652.2 billion yuan in 2025. With the叠加effect of policy benefits and market demand continuing to be released, the growth of China's primary healthcare market is set to explode in 2026.

Dr. Zhang Ziran, a pharmaceutical industry policy expert, in "Natural Medicine Theory》 pointed out that the country is vigorously promoting the下沉 of high-quality medical resources with the aim of quickly breaking the bottleneck of grassroots medical treatment.Currently, the pilot program for closely-knit urban medical groups is being advanced in 81 cities across China, with 2,199 counties and districts implementing the construction of closely-knit county-level medical consortia. The variety of medications for common and frequently-occurring diseases at the grassroots level has increased by 42 types.

Professor Deng Yong told VCBeat that basic security and primary healthcare are the top priorities of policy. Strengthening the security of primary healthcare institutions, improving family doctor contracting and hierarchical diagnosis and treatment, and addressing shortcomings in emergency and blood supply are both the baseline requirements of the Healthy China strategy and key measures to address aging and changes in disease patterns. Reinforcing the basic medical defense line can optimize resource allocation, alleviate pressure on large hospitals, and lay a foundation for diversified security and pharmaceutical innovation.

In reviewing the work of the past year and calling for strengthening basic medical and health services, the government work report emphasized"Commercial Health Insurance Innovative Drug List"And improve the multi-level medical security system,RequirementsAccelerate the Development of Commercial Health Insurance, Promote the high-quality development of innovative drugs and medical devices.

According to the analysis by Guoxin Securities Economic Research Institute, the establishment of the commercial health insurance innovative drug directoryEquivalent to opening the "second battlefield" for innovative drug payment.

On December 7, 2025, the National Healthcare Security Administration officially released the "National Basic Medical Insurance, Maternity Insurance, and Work-related Injury Insurance Drug Catalog (2025)" and the first edition of the "Commercial Health Insurance Innovative Drug Catalog (2025)", to be implemented starting January 1, 2026.

Guosen Securities Economic Research Institute believes that, from the perspective of policy positioning, the introduction of the commercial health insurance innovative drug list clearly defines the boundary between basic medical insurance and commercial health insurance in the field of innovative drug payment, entrusting commercial health insurance with the task of covering high clinical value but expensive innovative drugs.Fully leverage the supplementary role of commercial insurance in the multi-layered medical security system.

Currently, China's commercial health insurance market is developing rapidly, with premium income from commercial health insurance reaching 977.3 billion yuan in 2024, close to the scale of resident medical insurance funding for that year.

However, according to the "White Paper on Innovative Drug Payment by China's Commercial Health Insurance (2024)," the total payment for innovative drugs by commercial health insurance in 2023 was approximately 7.4 billion yuan, with a CAGR of 25% from 2019 to 2023.But in terms of scale, commercial health insurance payments account for only 5.3% of the RMB 140 billion innovative drug market.

In Professor Deng Yong's view, the development of commercial health insurance has been explicitly accelerated, becoming an important supplement to the multi-layered medical security system. Its core value lies inFill the payment gap outside of basic medical insurance, support the accessibility of high-priced innovative drugs, meeting differentiated health needs, aiding in the treatment of patients with rare diseases and cancer, and inversely driving pharmaceutical R&D.

Professor Deng Yong also pointed out that the development of commercial health insurance still faces many challenges, including:

The government work report mentioned the centralized procurement twice this time,Optimize the centralized procurement and price governance of pharmaceuticals, and deepen the reform of medical insurance payment methods.The 2025 Government Work Report also clearly states, "Optimize the policies for the centralized procurement of medicines and consumables, and strengthen quality evaluation and supervision."

Since the pilot program was launched in 2018, the centralized bulk procurement of medicines has become a breakthrough in China's medical and health system reform.

"Anti-Involution" is becoming a keyword in centralized procurement. On January 14, 2026, during the release of the results of the sixth batch of centrally organized high-value medical consumables volume-based procurement, relevant officials from the National Healthcare Security Administration stated:Continuously optimizing the centralized procurement rules, clearly opposing internal competition.

Research published by "China Medical Insurance" also shows that 2025, as the final year of the "14th Five-Year Plan," will see the centralized procurement policy in..."Stabilize Clinical Practice, Ensure Quality, Prevent Bid-rigging, Combat Internal Competition"Under the guidance of.

Professor Deng Yong analyzed to VCBeat,The centralized procurement of pharmaceuticals and the reform of medical insurance payments have entered a new stage of refined governance.Centralized procurement shifts from单纯降价to balancing quality and price, raises bidding thresholds, establishes supply保障预警, extends procurement cycles, and expands to traditional Chinese medicine (TCM) formulations and TCM decoction pieces, balancing降价, 保供, and quality improvement.

"Meanwhile, the core of medical insurance payment reform is DRG/DIP, establishing a special case negotiation mechanism for innovative drugs. Hospitals are incentivized to improve quality and efficiency through retained savings, while fraudulent activities related to insurance claims are severely cracked down on. The two major reforms work together to shift industry competition from price-based to quality and innovation-driven, achieving a balance between cost control and supporting industrial development," said Professor Deng Yong.

According to statistics, in 2025, China's national drug procurement will present a three-dimensional structure, with a total of 28 centralized procurement projects at or above the provincial level conducted. Among them, there is 1 national project, 12 inter-provincial alliance projects, and 15 provincial projects, forming a complementary pattern of national and provincial (including inter-provincial alliances) centralized procurement.

Analysis and Comparison of 177 Provincial-Level and Above Drug Centralized Procurements Conducted from 2019 to 2025: Two Major Characteristics in 2025One is the relatively high proportion of consortium procurement.In 2025, the annual share of the consortium procurement project will be 41.94%, higher than in 2022, 2023, and 2024;Second, the proportion of centralized procurement projects has increased., replacing traditional bidding procurement as an important method of centralized procurement.

The government work report shows that it is necessary to actively expand independent opening-up, focus on the service industry to expand market access and open up more areas, and further expandPilot Opening in Biotechnology, Wholly Foreign-Owned Hospitals, and Other Fields, orderly expand openness in the digital field, and reduce the negative list for cross-border trade in services.

In September 2024, the Ministry of Commerce, the National Health Commission, and the National Medical Products Administration issued a notice, clarifying the launch of pilot programs to expand openness in the medical field.In the biotechnology field, some free trade zones allow foreign-invested enterprises to engage in the development and application of human stem cell, gene diagnosis, and treatment technologies for product registration, market launch, and production. Additionally, it is proposed to permit the establishment of wholly foreign-owned hospitals in certain regions.

It is reported that currently, at least 40 foreign-funded biotechnology projects have been implemented, three newly established wholly foreign-owned hospitals have been approved, and a number of investment projects by foreign enterprises in pilot open sectors are being actively advanced.

In February 2025, the first wholly foreign-owned tertiary general hospital in TianjinPerennial HospitalThe hospital has officially opened its doors, offering access to approximately 150 types of imported and original research drugs.A "green channel" has also been opened to apply for innovative drugs and medical devices that have been marketed abroad but not yet approved domestically, with the fastest approval possible within one month by the local pharmaceutical regulatory department.. Provide patients with diversified payment options, such as a combination of medical insurance, commercial insurance, and pure self-payment.

In October 2025, according toYangtze River Investment GroupNews: Singapore's Perennial Group and Yangzi State Investment officially signed a strategic cooperation agreement to build the first wholly foreign-owned tertiary general hospital in Jiangsu Province, located in Nanjing's Jiangbei New Area. Nanjing is one of the nine pilot regions encouraging the establishment of wholly foreign-owned hospitals.

The government work report shows,ToAdvance the inheritance and innovation of traditional Chinese medicine, and promote the integration of Chinese and Western medicine.

Entering 2026, the national level further supports the development of the traditional Chinese medicine (TCM) industry. On February 5, eight departments including the Ministry of Industry and Information Technology jointly released the "Implementation Plan for High-Quality Development of the TCM Industry (2026-2030)", requiring the construction of high-standard TCM raw material production bases, improving the level of initial processing at the place of origin, and deeply empowering the research and development of new TCM drugs, etc.At the same time, it emphasizes strengthening the inheritance of traditional Chinese medicine technology.

Recently, Wu Huangang, a deputy to the National People's Congress, vice president of the China Acupuncture and Moxibustion Association, and chief professor at Yueyang Hospital of Integrated Traditional Chinese and Western Medicine affiliated with Shanghai University of Traditional Chinese Medicine, pointed out that significant progress has been made in the protection of intangible cultural heritage in traditional Chinese medicine in recent years.

“But the digital inheritance of TCM intangible cultural heritage is still in its infancy."Faced with issues such as an incomplete talent cultivation system,单一的传承模式, and the lack of technical standards, there is an urgent need to achieve a transformation from emergency protection to innovative development through systematic planning and policy guidance."

Professor Deng Yong further told VCBeat that significant achievements have been made in the inheritance and innovation of traditional Chinese medicine, with the policy system continuously improving, the qualified rate of traditional Chinese medicinal materials greatly increasing, a steady growth in the number of newly approved Chinese medicines, notable success in the clinical integration of traditional Chinese and Western medicine, and ongoing progress in internationalization and ancient book compilation work.

"But the industry still faces prominent challenges:Difficult to pass on the experience of famous doctors, and a shortage of versatile talents; The efficacy evaluation system is not well-established, with insufficient evidence-based support, affecting clinical and international recognition; there are shortcomings in the standardization of authentic medicinal materials, production processes, and innovative transformation. The collaborative mechanism between Chinese and Western medicine is not smooth, and the service capacity at the grassroots level still needs to be strengthened." Professor Deng Yong pointed out.

The government work report also emphasized the need to“Resolutely Crack Down on Deceptive Insurance Fraud”。

The medical insurance fund is the "money for medical treatment" and "life-saving money" of the people. It is not only the core support for the sustainable operation of the medical security system, but also directly related to the vital interests of the insured and the healthy development of the medical cause.

However, it is reported that illegal activities in the current medical insurance field continue to occur despite repeated prohibitions. Problems such as various medical institutions improperly using medical insurance funds and individuals obtaining medical services or drugs under false names also happen from time to time, seriously eroding the safety of medical insurance funds and harming the vital interests of the public.

In response to such issues, the regulatory efforts on China's medical insurance fund have been continuously upgraded in recent years.

The website of the Central Commission for Discipline Inspection and the National Supervisory Commission published an article promoting the crackdown on fraudulent activities related to insurance fraud and the misuse of medical insurance funds.At the same time, with the implementation of a series of policy documents such as the "Notice on Doing a Good Job in the Supervision of the Medical Security Fund in 2026" and the "Detailed Rules for the Implementation of the Regulations on the Supervision and Administration of the Use of the Medical Security Fund," entering 2026, the supervision of China's medical security fund will become stricter. Comprehensive measures will be taken to strengthen the safety line of the medical security fund, effectively safeguarding the people's "lifeline money."

In summary, in the blueprint for healthcare reform outlined in the government work report, every measure—from strengthening primary healthcare defenses and optimizing centralized procurement policies to counter internal competition, to opening new battlegrounds for commercial insurance payments for innovative drugs and steadily expanding pilot medical openness—directly targets the core of deepening the "three medical" linkage and high-quality development. In particular, the emphasis on the inheritance and innovation of traditional Chinese medicine, as well as the firm stance against fraudulent claims on healthcare funds, not only reflects the exploration of traditional wisdom but also demonstrates a strong commitment to safeguarding the basic welfare of the people.

As policy dividends and market demands continue to overlap, a more resilient, fairer, and vibrant new pattern in the pharmaceutical and healthcare industry is accelerating its formation.