Dual Insurance Formularies Approach: Coordinated Support Providing Economic Backing for Innovative Medicines
By Wu Yinggang, Intern Zhang Zhongen
On July 1, the National Healthcare Security Administration released the “Work Plan for Adjusting the 2025 National Drug List for Basic Medical Insurance, Maternity Insurance, and Work-Related Injury Insurance, as well as the Innovative Drug List for Commercial Health Insurance (Draft for Comment)” and related documents, and solicited public comments.
It is understood that the first edition of the Innovative Drug Catalog for Commercial Health Insurance will be formulated in 2025. This catalog will primarily include innovative drugs that exceed the scope of basic insurance coverage and cannot yet be included in the National Reimbursement Drug List, but which feature high levels of innovation, significant clinical value, and substantial patient benefits. The catalog is recommended for reference by multi-tiered medical security systems, including commercial health insurance and medical mutual aid programs.
Regarding the scope of drugs eligible for inclusion in the commercial health insurance catalog, it was stated that exclusive drugs may be submitted separately for the Commercial Health Insurance Innovative Drug Catalog, or simultaneously for both the Commercial Health Insurance Innovative Drug Catalog and the Basic Catalog, provided they are new drugs with a new generic name approved for marketing by the national drug regulatory authorities between January 1, 2020, and June 30, 2025, or drugs for the treatment of rare diseases approved for marketing by the national drug regulatory authorities on or before June 30, 2025.
Stabilize Corporate Expectations and Provide Economic Support for Innovative Drugs
On June 30, 2025, the National Healthcare Security Administration and the National Health Commission jointly issued the Several Measures to Support the High-Quality Development of Innovative Drugs (hereinafter referred to as the “Several Measures”), which explicitly encourages commercial health insurers to expand their investment scale in innovative drugs. Commercial health insurance companies are encouraged to provide stable, long-term investment for the research and development of innovative drugs through various channels, such as innovative drug investment funds, thereby cultivating patient capital that supports the innovation-driven pharmaceutical sector.
“We will ensure effective alignment between the National Reimbursement Drug List (NRDL) and the commercial insurance innovative drug catalog, thereby providing a stable market outlet for drugs included in the latter, better stabilizing corporate expectations, and further enhancing drug accessibility.” Recently, Huang Xinyu, Director of the Department of Pharmaceutical Services Management at the National Healthcare Security Administration (NHSA), made this statement at a press conference on the “Several Measures to Support the High-Quality Development of Innovative Drugs.”
Huang Xinyu pointed out that establishing a catalog of innovative drugs for commercial insurance will help further clarify the coverage boundaries of basic medical insurance, leaving more room for the development of commercial health insurance; it will help leverage the advantages of medical insurance in terms of data, expertise, management, and policy to provide public services for commercial health insurance; and it will help integrate funds from both medical insurance and commercial health insurance, forming a combined force to safeguard people's health while providing stronger financial support for the development of innovative drugs.
According to Huang Xinyu, in terms of the formulation process, the Commercial Insurance Innovative Drug Catalog is organized and developed by the National Healthcare Security Administration (NHSA). This approach will fully leverage the expertise of the experts involved in adjusting the National Reimbursement Drug List (NRDL) and alleviate the administrative burden on pharmaceutical companies arising from multiple separate submissions. The catalog is designed to be applied for and adjusted in parallel with the NRDL, following largely identical procedures. Companies may independently apply for inclusion in either the NRDL or the Commercial Insurance Innovative Drug Catalog, or they may apply for both simultaneously.
Unlike adjustments to the National Reimbursement Drug List (NRDL), the Commercial Insurance Innovative Drug List fully respects the market entity status of commercial health insurance companies. It establishes a mechanism for substantial participation by insurers and industry experts in all stages, including scheme formulation, expert review, and price negotiation. Experts in commercial health insurance hold significant decision-making authority regarding both the inclusion of drugs in the Commercial Insurance Innovative Drug List and price negotiations.
“Of course, the Commercial Health Insurance Innovative Drug Catalog is a new initiative that requires further exploration and refinement in practice. Initial considerations favor a prudent start, with dynamic adjustments to be made subsequently based on factors such as advancements in pharmaceutical technology, changes in clinical needs, and the development of commercial health insurance. Here, we also welcome commercial health insurance companies, relevant industry associations, and experts to actively participate in the formulation of the Commercial Health Insurance Innovative Drug Catalog,” said Huang Xinyu.
Assume the function of differentiated coverage
Compared to the National Reimbursement Drug List (NRDL), which focuses on providing basic coverage, commercial insurance formularies will assume a greater role in offering differentiated protection.
Based on the aforementioned press conference information, both basic medical insurance and commercial health insurance are integral components of China’s multi-tiered healthcare security system. In 2024, the number of enrollees in basic medical insurance reached 1.326 billion, with the enrollment rate stabilized at 95%. The total fund expenditure for the year amounted to RMB 2.97 trillion, providing robust support not only for public access to medical care but also for the development of healthcare institutions, advancements in pharmaceutical technologies, and the enhancement of industrial capabilities.
However, the overall funding level of basic medical insurance is not high. In particular, for the nearly 1 billion participants in the Urban and Rural Resident Basic Medical Insurance, the per capita funding amounts to only RMB 1,070, with approximately two-thirds derived from fiscal subsidies at various government levels. Therefore, it is essential to firmly adhere to the core principle of “providing basic coverage.”
With the advancement of pharmaceutical technological innovation and the improvement of medical service standards, a small number of drugs with significant clinical efficacy and high levels of innovation remain temporarily excluded from coverage due to exceeding the financial capacity of the basic medical insurance system.
Meanwhile, with socioeconomic development, China’s commercial insurance market has also exhibited rapid growth in recent years. In 2024, the gross written premiums for commercial health insurance in China reached RMB 977.3 billion, a year-on-year increase of 8.2%, with the fund scale approaching the total financing level of residents’ basic medical insurance for that year. However, compared to the over 95% fund utilization rate of urban and rural residents’ basic medical insurance, commercial health insurance still has considerable room for improvement in terms of coverage level and effectiveness.
To this end, the 2025 Government Work Report and related documents both call for improving the adjustment mechanism of the National Reimbursement Drug List (NRDL) and formulating and issuing a catalog of innovative drugs covered by commercial health insurance, so as to better meet the public’s needs for multi-tiered medication coverage. The establishment of the commercial health insurance innovative drug catalog marks the first step in coordinating the development of basic medical insurance and commercial health insurance, strengthening the multi-tiered medication security system, and better addressing the diverse medication coverage needs of the population.
Synergy Between Basic Medical Insurance and Commercial Insurance
Although their coverage functions differ, basic medical insurance and commercial health insurance must still achieve synergy.
The “Opinions on Deepening the Reform of the Medical Security System” issued by the State Council proposes that, by 2030, a medical security system will be fully established, with basic medical insurance as the mainstay, medical assistance as the safety net, and supplementary medical insurance, commercial health insurance, charitable donations, and mutual medical aid developing in concert.
Based on the aforementioned press conference information, the National Healthcare Security Administration is accelerating efforts to improve the “1+3+N” multi-tiered medical security system.
“1” refers to building a unified national healthcare security information platform and establishing healthcare security infrastructure and service capabilities centered on big data. “3” denotes improving the basic medical security system featuring a three-tiered burden-reduction mechanism comprising basic medical insurance, critical illness insurance, and medical assistance. “N” signifies guiding other protective forces—such as commercial health insurance, charitable donations, and mutual aid provided by labor unions—to play their roles, promoting differentiated development in coordination with basic medical insurance to better serve as supplementary coverage.
Building on this foundation, to address certain challenges encountered in the development of commercial health insurance, basic medical insurance and commercial health insurance will enhance coordination in four key areas to jointly support the development of innovative drugs.
First is the coordination of coverage scope. Explore measures to support the differentiated development of commercial health insurance and basic medical insurance, using the establishment of an innovative drug catalog for commercial health insurance as an entry point to further clarify the coverage boundaries of basic medical insurance. This will support closer alignment and synergy between commercial health insurance and basic medical insurance in terms of coverage capacity, thereby forming a combined protective force.
Second, data synergy. On the basis of ensuring data security and privacy protection, we will explore ways to leverage medical insurance data to empower commercial insurance, accelerate the application of medical insurance data in the field of commercial health insurance, support rapid underwriting and claims settlement by commercial insurers, and facilitate the development of more commercial health insurance products, thereby achieving a shift from “insuring healthy individuals” to “safeguarding people’s health.”
Third, coordinated settlement. We will explore and promote the simultaneous settlement of basic medical insurance and commercial health insurance. By sharing data, we aim to enable real-time, synchronized settlement for patients with corresponding commercial insurance at medical institutions, thereby allowing data to do the legwork and reducing the burden on patients. Support characterized by “three exclusions” will be provided for drugs listed in the innovative drug catalog of commercial health insurance: these drugs will be excluded from the out-of-pocket rate indicators of basic medical insurance, excluded from monitoring of volume-based procurement (VBP) winning products that have substitutable alternatives, and cases involving the use of such innovative drugs covered by commercial health insurance may be excluded from diagnosis-related group (DRG) payment schemes. This approach provides support for expanding the coverage scope and optimizing services within commercial health insurance.
Fourth, regulatory coordination. Fully share the intelligent supervision platform and capabilities of the medical insurance system to gradually achieve coordinated supervision between basic medical insurance and commercial health insurance, thereby ensuring the rational use of commercial health insurance funds and stable operations.