Full text of Document no. 9 released: self-evaluation pricing for innovative drugs at initial market entry, who will be the first to benefit?

On April 15, the General Office of the State Council released the full text of the "Opinions on the Formation Mechanism of Drug Prices" (Guo Ban Fa [2026] No. 9, hereinafter referred to as the "Opinions").

Drug prices are intrinsically linked to the affordability of medicines for millions of households on one hand, and to the innovation lifeline of the biomedical industry on the other. As the industry continues to evolve, the old models face new challenges: How can innovative drugs secure an initial premium commensurate with their high risk and high investment? How should we view the long-standing price disparities between online channels, offline channels, and public medical institutions?

This "Opinions" proposes a series of reform measures from three dimensions: full cycle, full channel, and full field. For newly listed drugs, a drug launch price mechanism has been introduced. Based on the company's self-assessment of the degree of innovation and clinical value, it distinguishes between high-level innovative drugs, improved new drugs, and generic drugs, providing policy support and guidance. For medicines included in the medical insurance directory, the guiding role of the medical insurance payment standard in drug pricing should be utilized. For drugs with diverse supply sources, those that have been on the market for many years, and those included in bulk procurement, procurement rules should be optimized according to the characteristics of different types of drugs, and the price formation mechanism for bulk procurement of drugs should be improved.

The drug pricing rules, which focus on clinical value and normalize fully transparent prices across all channels, are being further refined. Among these, high-level innovative drugs with a high degree of innovation and significant clinical value will be supported in setting prices that align with their high investment and high risk during the initial market entry period, maintaining relatively stable prices for a certain period.

According to a representative from an innovative drug company, those who hold globally novel targets and dare to compete head-on in clinical value will be the first to reap the benefits. Follow-on innovation at the me-too or me-better level will only command a limited premium commensurate with the patient benefit. Companies that have made significant investments in the First-in-Class and Best-in-Class arenas, and possess high-quality real-world data, have been given particular reassurance.

In the future, pharmaceutical companies will face a major test of their pricing power after gaining the space for independent pricing of innovative drugs.

One of the most notable highlights of the "Opinions" is the introduction of a "launch price mechanism for newly listed drugs such as innovative drugs."

For high-level innovative drugs with a high degree of innovation and significant clinical value, support will be given to formulate prices that correspond to high investment and high risk in the early stage of market entry, maintaining relatively stable prices for a certain period. Implement a self-assessment system for newly listed drug companies, guiding pharmaceutical enterprises to conduct proper self-assessment and independently set reasonable prices by considering clinical value, market supply and demand, competitive landscape, and societal affordability.

At the same time, high-level innovative drugs, improved new drugs, and generic drugs form differentiated pricing flexibility. For improved new drugs, there is encouragement to guide the formulation of prices that match patient benefits; for generic drugs, reasonable pricing is referenced against drugs with the same generic name, the same mechanism of action, and the same functional indications.

Data shows, China's national medical insurance catalog negotiations have cumulatively included 199 innovative drugs in the scope of medical insurance reimbursement. As of February 2026, the medical insurance fund has spent a total of 504.8 billion RMB on negotiated drugs during their agreement period, driving sales of 740 billion RMB and benefiting 1.17 billion people. However, the previous negotiation model led to a situation where companies might face no market if they didn't enter the medical insurance system, and no profit if they did.

The "Opinions" propose that companies be allowed to set prices initially during the listing phase, and based on real-world research results and clinical effectiveness, pharmaceutical companies may appropriately adjust price levels from the initial drug pricing.

This rule design leaves reasonable room for commercial returns for true innovation, while preventing excessive pricing through peer review and social supervision.

A strong signal of "no centralized procurement for innovation, no innovation in centralized procurement" has been released.

Wang Xiaoning, Director of the Department of Medicine Pricing and Centralized Procurement of the National Healthcare Security Administration, responded to media questions at a briefing. The "Opinions" emphasize the implementation of centralized bulk procurement for drugs with diversified supply and those that have been on the market for many years, specifically clarifying that innovative drugs are not included in the centralized procurement, which is commonly referred to as "no centralized procurement for innovation, and no innovation in centralized procurement."

In the past, innovative drugs were overly reliant on the single buyer of medical insurance, leading to the dilemma that if they couldn't enter the medical insurance system, they would be difficult to sell. The "Opinions" proposed accelerating the implementation of the commercial health insurance innovative drug directory and encouraged pharmaceutical enterprises, charitable organizations, special funds, and other social forces to provide precise and effective assistance to users of innovative drugs.

At the same time, the "Opinions" clearly state that pharmaceutical enterprises should supply negotiated drugs to designated medical institutions under the medical insurance scheme at prices not exceeding the payment standard as agreed in the contract. The market price of supplying negotiated drugs to non-medical insurance designated pharmaceutical institutions is not bound by the payment standard.

This means that an innovative drug can either go through the medical insurance channel to exchange price for volume or maintain a high price in the self-paying or commercial insurance channels to obtain high profits.

The "Opinions" also proposed to establish a medical insurance value assessment system for pharmaceuticals, improve the framework, rules, and procedures for real-world studies of pharmaceuticals, and encourage and support real-world studies on innovative drugs listed in the medical insurance catalog and commercial health insurance catalog.

A relevant official from the National Healthcare Security Administration stated that they will use reliable and credible real-world data to objectively evaluate the value of drugs from multiple dimensions, including clinical efficacy, innovation, and accessibility.

In the future, companies that can demonstrate a high degree of pharmaceutical innovation and significant clinical value will gain a valuable pricing window in the early stages of going public.

The vision for the formation of drug prices encompasses the entire cycle, all channels, and all fields.

Among the three types of channels—medical institutions, retail pharmacies, and online pharmacies—all medicines used in public medical institutions should be procured through provincial pharmaceutical procurement platforms and sold at zero markup. Chinese herbal formula granules have also been included in the zero markup management. Promote medical institutions to promptly register the actual purchase prices on the provincial pharmaceutical procurement platform, and study effective ways to reasonably link the listed price with the negotiated price.

This means that the hospital's actual purchase price will be recorded by the system, and the online listing price is a dynamic indicator linked to real transactions.

At the retail pharmacy end, the implementation of public price comparison for medical insurance drugs in designated medical insurance pharmacies and the compilation of a volume-price comparison index for medical insurance drugs in these pharmacies are underway. Currently, drug price comparison mini-programs have been launched across various regions, allowing consumers to query drug prices, specifications, and distances between different pharmacies in real time.

Online pharmacies should regularly compare online and offline prices, analyze abnormal pricing, and promote fair and reasonable drug pricing across different channels.

Shi Zihai, deputy commissioner of the National Healthcare Security Administration, stated that it is necessary to both support innovative research and development and promote relative balance in the prices of similar drugs produced by different companies. For example, the "Opinions" propose the implementation of intelligent drug price monitoring and drug price risk warnings, primarily relying on the national list of publicly available drug prices to flag drugs with significantly high prices on provincial pharmaceutical procurement platforms with red and yellow labels. This does not mean that medical institutions are forcibly prohibited from purchasing these high-priced drugs. Rather, it aims to break the information asymmetry in pricing across different companies and alert medical institutions to price risks.

In the past, the issue of significant price differences for the same drug across different channels has long existed: zero markup sales in public hospitals, retail pharmacies following market trends, and online pharmacies possibly using low prices to attract traffic. However, the prices patients pay across different channels may vary several times over, and some drugs have even had their prices raised to avoid affecting negotiation-based pricing.

The current approach to channel-wide price governance is to use prices at designated pharmacies and online pharmacies as anchors to correct excessively high publicly available listing prices. Through medical insurance designation agreements, designated pharmacies are required to ensure that their prices are not significantly higher than those of other channels and shall not implement "dual pricing."

A relevant official from the National Healthcare Security Administration stated that the next step will be to adhere to the principles of stabilizing clinical practice, ensuring quality, countering internal competition, and preventing bid-rigging, further improving the price formation mechanism for drug procurement.

On one hand, procurement rules will be refined based on the characteristics of different drug types, including chemical drugs, biologics, traditional Chinese medicines, and Chinese herbal decoction pieces. This includes optimizing the selection of drug varieties, bidding qualifications, and volume reporting methods for different drug types, thereby enhancing the alignment between centralized procurement and clinical choices. On the other hand, the implementation of centralized procurement results will be strengthened by reinforcing coordinated action across medical care, medical insurance, and pharmaceuticals, consolidating departmental efforts to create a comprehensive effect. For healthcare institutions, the primary focus is to guide them to prioritize the use of selected products in accordance with regulations and reported volumes. Outside the centralized procurement agreements, healthcare institutions may use other non-selected products, including originator drugs, avoiding a one-size-fits-all approach in clinical practice.