2026 China Two Sessions: Tackling the "Last Mile" of Innovative Drug Implementation | 2026 Two Sessions Strategy

Recently, at the 2026 "Voice·Responsibility" symposium for representatives and committee members of the pharmaceutical and healthcare industry, Sun Piaoyang, a national representative of China and chairman of Jiangsu Hengrui Medicine Co., Ltd., called for solutions to address the challenges faced in implementing innovative drugs. He pointed out that despite the acceleration of the dynamic adjustment of the medical insurance catalog,However, "a continuously stable payment system has not been established, and the diversified supporting role of commercial health insurance has not been fully utilized."

"The number of innovative drugs launched in China has ranked second globally, but the problems of 'difficulty in entering hospitals and payment challenges' for high-value innovative drugs remain prominent," said Sun Jie, member of the National Committee of the Chinese People's Political Consultative Conference and Deputy Dean of the School of Insurance at the University of International Business and Economics, during the Two Sessions.

This judgment highlights the core pain point in the current pharmaceutical innovation field — In 2025, the National Medical Products Administration approved a record-breaking 76 innovative drugs for market launch, of which over 80% were domestically produced innovative drugs. However, the practical application of these innovative achievements faces multiple obstacles.

Wu Jianying, a representative of the 16th Shanghai Municipal People's Congress and the executive director and president of Shanghai Haohai Biotechnology Co., Ltd., also believes that the development of China's pharmaceutical industry needs to further improve the payment system to unleash domestic demand momentum.

Wu Jianying told VCBeat,Breaking away from the single public-funded medical payment system and establishing a comprehensive multi-level social medical and commercial insurance system is an important means to drive the biopharmaceutical industry and meet the needs of multi-level healthcare services.

The "last mile" of the off-hospital market is undergoing a "health management" transformation. Ruan Hongxian, member of the National Committee of the Chinese People's Political Consultative Conference and chairman of Yixintang Pharmaceutical Group Co., Ltd., told VCBeat that as economic conditions improve, people are paying more attention to their own health.This requires pharmacies to shift from单纯药品销售 to helping consumers achieve long-term health management.

Improving the multi-level payment system and supporting the development of commercial health insurance seem to be the most attention-grabbing topics during the 2026 Two Sessions.

Sun Piaoyang stated that while China's pharmaceutical industry is transitioning from being large to strong, and from quantitative to qualitative changes, it still faces many issues. Among them, the incomplete mechanism for rewarding innovation value is a significant problem. The payment system also needs further optimization. Although the dynamic adjustment of medical insurance has accelerated, a continuously stable payment system has yet to be established. The diversified supporting role of commercial health insurance has not been fully utilized, making it difficult to balance the sustainability of medical insurance with enterprises' innovation incentives.

"It is recommended to improve the payment system, vigorously develop commercial health insurance, and build a diversified payment pattern of 'basic medical insurance + commercial insurance' to inject sustainable momentum into the development of innovative drugs."Sun Piaoyang stated.

Wu Jianying further suggested that the State Administration of Taxation consider allowing the amount paid by enterprises and individuals for commercial medical insurance to be deducted from personal taxable income within a certain range, in order to enrich the funding sources for commercial medical insurance. Additionally, the National Healthcare Security Administration could relax price management and restrictions on self-paid medicines and medical consumables to a certain extent, encouraging innovation to be supported and realized through non-healthcare security systems.

"AndIt is recommended that the National Medical Products Administration (NMPA) promoteHealth Consumer Devices(Special Approval Process for Non-Clinical Use Medical Devices)"Clarify product definitions, establish an OTC medical device management model similar to those in Europe and the U.S., and have third-party professional quality certification agencies conduct quality audits and approve products for market release to activate the potential of health consumption. Especially for low-risk health management products such as rehabilitation and elderly care devices, smart home-use devices, functional beauty and maintenance products, and modern traditional Chinese medicine devices, innovate and optimize market access mechanisms to significantly shorten the product launch cycle." Wu Jianying pointed out.

Commercial health insurance has always been a key direction supported by national policies.

On March 5, the official website of the State Council released the 2026 Government Work Report, which highlighted the "Commercial Health Insurance Innovative Drug List" and the improvement of a multi-level medical security system. It called for accelerating the development of commercial health insurance and promoting the high-quality development of innovative drugs and medical devices.

Prior to this, on December 7, 2025, the National Healthcare Security Administration officially released the first edition of the "Commercial Health Insurance Innovative Drug List (2025)," which included a total of 19 drugs. This complements and aligns well with basic medical insurance, laying the foundation for promoting differentiated development between commercial insurance and basic medical insurance, as well as establishing a multi-layered healthcare security system.

The establishment of the commercial health insurance innovative drug list is equivalent to opening a "second battlefield" for the payment of innovative drugs, but there still seem to be some sticking points in implementation.

Huang Yinli, a representative of the Hunan Provincial People's Congress and the Party Secretary and General Manager of China Life Insurance Co., Ltd. Hunan Branch, pointed out that the collaborative development of "basic medical insurance + commercial health insurance" still faces key bottlenecks.Mainly reflected in the "data barriers" and "service breakpoints" between the two.

"Incomplete data supply mechanisms make it difficult for commercial health insurance to precisely address product design, risk pricing, and service coverage, affecting the efficiency of its complementarity with basic medical insurance; the lack of smooth connections in the service chain also restricts the full play of protection synergy and the enhancement of people's sense of gain," said Huang Yinli.

Zhu Hailuan, member of the Beijing Municipal Committee of the Chinese People's Political Consultative Conference and Vice President of Sanofi Greater China, further pointed out that the actual application of new drugs to achieve "hospital entry, usability, affordability, standardized use, and sustainable use" imposes higher requirements on payment system alignment, hospital operation management, evidence evaluation, and risk control.

"At present, various security methods such as basic medical insurance, commercial health insurance (including惠民保) are developing concurrently.However, there are still gaps in functional positioning, payment rules, data sharing, and evaluation mechanisms, which have to some extent affected the implementation of innovative drug standards and accessibility improvement, and increased operational and management pressures on hospitals.

"It is recommended to improve the top-level design, further strengthen the coordination and connection of policies related to healthcare, medical insurance, commercial insurance, and pharmaceuticals, clarify the functional positioning of multi-level medical security in supporting pharmaceutical innovation and ensuring fairness and accessibility, and explore the formation of a stable and predictable collaborative operation mechanism," emphasized Zhu Hailuan.

After the establishment of the commercial insurance directory, the "last mile" in the hospital admission process remains a problem.

Professor Sun Jie pointed out that although the commercial insurance directory has been established, innovative drugs still face the "last mile" problem in clinical application, specifically.Insufficient basis for doctors' prescriptions, limited risk control measures by commercial insurance companies, and weak sense of benefit for patients.

According to Professor Sun Jie, the commercial insurance directory includes 19 high-value innovative drugs, 17 of which are injectables, and patients need to be administered the drugs by medical staff in hospitals.But some hospitals refuse to allow patients to bring externally purchased injectables back to the hospital for administration according to their management protocols.Therefore, the hospital's allocation of drugs in the commercial insurance directory is a crucial step in打通创新药落地“最后一公里”.

"Professor Sun Jie emphasized: 'It is recommended to optimize the performance monitoring indicators of tertiary public hospitals, explicitly exclude commercially insured drug list from cost indicators, and add a proportion indicator for innovative drug application; allow public hospitals to accept commercial insurance funding in addition to government appropriations, medical insurance funds, and patient out-of-pocket payments, while simultaneously establishing a pharmaceutical service fee mechanism shared by medical insurance, commercial insurance, and patients; and based on DRG/DIP exclusion payment, establish an additional payment mechanism for 19 commercial insurance drug list medications.'"

In addition to the drugs in the commercial insurance catalog, drugs from medical insurance negotiations are also facing the same issue.

Sun Piaoyang suggested that relevant policies should be effectively implemented to打通国谈创新药落地“最后一公里”,It is recommended that there should be no threshold for the inclusion of drugs negotiated at the national level into hospitals, and they should be directly incorporated into the drug lists of medical institutions.Ensure the efficient hospital application of innovative drugs admitted to medical insurance, and guarantee clinical medication needs.

From the success of the negotiation to the patient receiving the drug,The success of the medical insurance negotiation is just the first step.

According to Jin Chunlin, Director of the Shanghai Health Development Research Center:

Among themIn the admission process,The frequency and rhythm of hospital pharmacy committee meetings are particularly crucial.

Industry insiders pointed out that when the medical insurance catalog is implemented, hospitals may not convene the Pharmacy Affairs Committee in sync but instead proceed at their own pace. Some hospitals might not hold a Pharmacy Affairs meeting throughout the entire year, which could result in negotiated medical insurance products not being admitted into the hospital for the whole year.

In addition, the accessibility and availability of rare disease drugs in hospitals have also been a focus of attention at this year's Two Sessions. Hu Xiaoxia, a representative of the Beijing Municipal People's Congress and General Manager of the External Affairs Department at Keyuan Xinhai (Beijing) Medical Supplies Trading Co., Ltd., suggested that for urgently needed clinical drugs temporarily imported through Beijing's Rare Disease Security Pilot Zone which have not yet been marketed domestically, they should be treated equally with already marketed rare disease drugs and subject to the same 3% simplified VAT collection policy at the import stage.

"Reducing import costs can incentivize medical institutions to broaden temporary import channels for medicines,"Enhance the capacity to treat critical illnesses and rare diseases, and further smooth the 'lifeline'." Hu Xiaoxia stated.

With the advancement of the "Healthy China 2030" strategy, the accelerating trend of prescription drugs flowing out of hospitals, and the awakening of consumers' health management awareness, the off-hospital market, centered on retail pharmacies, is becoming a vibrant growth pole in the pharmaceutical and health industry.

Currently, major chain pharmacies are actively promoting the transformation from "selling medicine" to "health management."

March 1, 2026, Yixintong Pharmaceutical Group "Health StationThe launch ceremony of the construction project was held in grand style, aiming to promote the transformation of pharmaceutical retail terminals,打通基层健康服务“最后一公里”(to打通 the "last mile" of grassroots health services), and meet the upgrading demand of people from "treating diseases" to "preventing diseases". It also aims to improve the grassroots public health service system and make professional health services easily accessible.

The Pharmacy of the Common People is also innovating the "pharmacy+" model by collaborating with well-known brand chain convenience stores to build a diversified ecosystem that integrates health management, convenient shopping, and lifestyle services, jointly creating a community "Healthy Living Station."

It is reported that the national level is actively promoting the transformation of retail pharmacies.

In January 2026, the Ministry of Commerce and eight other departments jointly issued the "Opinions on Promoting the High-Quality Development of the Pharmaceutical Retail Industry."Clearly proposed to promote the transformation of retail pharmacies from traditional "drug sales terminals" to "health service stations."Require the pharmaceutical retail industry to enrich health service functions and enhance health service experiences, encourage pharmaceutical retail enterprises to expand health management services such as medication guidance and health consultation in accordance with laws and regulations, and encourage the conduct of health education activities like weight loss, smoking cessation, and alcohol abstinence.

When discussing the construction of "Health Stations," Ruan Hongxian, a member of the National Committee of the Chinese People's Political Consultative Conference and chairman of Yixintang Pharmaceutical Group Co., Ltd., told VCBeat that the fundamental reason for Yixintang to promote this transformation lies in the change of consumer demand. With the improvement of economic conditions, people are paying more attention to their own health, and maintaining health is not something that can be achieved overnight. It requires continuous self-care from childhood to old age and cannot be delegated to others.This requires pharmacies to shift from simple drug sales to helping consumers achieve long-term health management.

"The core of the Health Station lies in guiding consumers to proactively pay attention to their health conditions and understand the impact of lifestyle habits on health. It is necessary to help consumers establish an awareness of health through various professional services and guide them in changing their lifestyle habits," Ruan Hongxian pointed out.

Xie Zilong, National People's Congress representative, Chairman and President of Laobaixing Pharmacy, further pointed out that, considering the actual situation of domestic and international industry development and consumer demand, it is recommended to ensure the safety red line of prescription drugs while...Non-pharmaceutical associated display is allowed to be voluntarily piloted by provinces and cities under the premise of compliance with laws and regulations.

"By implementing precise risk stratification and scientific correlation display, we can more conveniently meet the one-stop health service needs of the public, enhance the convenience and experience of health consumption, unleash the health service potential of pharmacies, and better play the role of 'health station'," Xie Zilong said.

It is reported that retail pharmacies in China are transitioning from traditional drug sales terminals to the forefront of public health service. Facing multiple challenges such as medical insurance payment reform, consumer segmentation, and omnichannel competition, the industry's growth logic is being reshaped. The core competitiveness of future pharmacies may depend on their ability to build a "health service ecosystem."

While transitioning and developing, Ruan Hongxian emphasized to VCBeat that pharmacies still need to anchor their core service audience, which revolves around the mass consumer groups and demands.The "natural consumption" generated by the public based on daily health management is the most long-term and persistent support.

In summary, to打通创新药落地"last mile", it requires both institutional breakthroughs in top-level design and meticulous implementation in the execution phase.

As the government work report explicitly calls for the accelerated development of commercial health insurance, the first edition of the commercial insurance directory is officially implemented, and nine departments promote the functional reshaping of retail pharmacies, the dilemma of the "last kilometer" for innovative drugs is expected to be gradually resolved.

When the "basic protection" of medical insurance and the "high-value protection" of commercial insurance form a synergy, and when hospital access and out-of-hospital services are seamlessly connected, the clinical value of China's pharmaceutical innovation can truly be transformed into patient benefits, injecting inexhaustible momentum into the construction of Healthy China.