Hainan Launches World’s First Full-Cycle Digital Therapeutics Industry Support Policy with 21 Measures to Build Global Innovation Hub

On October 11, Hainan Province released the “Several Measures of Hainan Province for Accelerating the Development of the Digital Therapeutics Industry” (hereinafter referred to as the “Measures”), which outlined specific policy details for developing the digital therapeutics industry in Hainan. The plan aims to build Hainan into a global innovation hub, a cluster for innovative resources, and an industrial highland for digital therapeutics within two to three years. It proposes establishing digital therapeutics as a “new engine” for the high-quality development of Hainan’s health industry, thereby driving leapfrog development in the province’s healthcare sector.

This marks the first time that a policy supporting the digital therapeutics industry across its entire lifecycle has been introduced in China and globally., which is of great significance! The Measures also echo Hainan’s previous policies. In late January this year, the Hainan Provincial Health Commission included “exploring pilot trials of digital therapeutics” as one of the key tasks for digital health development during the 14th Five-Year Plan period in its Digital Health Development Plan for Hainan Province during the 14th Five-Year Plan Period. This is alsoDigital Therapeutics Included in Provincial Planning for the First Time, Drawing Widespread Industry Attention and Creating a Demonstration Effect, local governments in multiple regions have begun to pay attention to digital therapeutics.

For the digital therapeutics industry, this is another significant piece of positive news in the short term.—Just before the National Day holiday, the digital therapeutics industry welcomed a wave of favorable policies (for details, see:"Digital Therapeutics Achieve Major Breakthrough! NMPA Classification Guidelines and IEEE Standard Development Work Launched"）。

“The Measures” highlight targeted initiatives across key areas of the digital therapeutics industry, including product R&D, registration and approval, clinical application, reimbursement, industrial clustering, data security, talent support, and capital financing.. Previously, some regions had explored targeted policies for individual aspects, but the Measures are the first to propose a comprehensive, systematic, and actionable full-cycle industrial support policy for digital therapeutics.

Zhang Yuhui, Deputy Director of the Hainan Provincial Health Commission, stated that the Measures closely align with the central government’s directives for Hainan to deepen supply-side structural reform and actively develop the digital economy. Leveraging Hainan’s resource endowments and advantages in integrated institutional innovation, the Measures provide comprehensive support and empowerment for the development of the digital therapeutics industry from a full-lifecycle perspective. The Measures offer clear policy directions for encouragement and support across key stages of the entire lifecycle, including scientific research and clinical translation, registration and approval, promotion and application, innovative payment models, as well as standardization and safeguards, aiming to genuinely address the practical challenges faced by digital therapeutics enterprises in their development.

“Hainan Province has proposed increasing the average life expectancy by two years during the 14th Five-Year Plan period, which is a highly challenging goal. Digital therapeutics can provide innovative treatment pathways for various diseases; they can be combined with pharmaceuticals and medical devices to improve medication adherence and therapeutic rehabilitation outcomes; and they can play roles in disease screening and prevention. By offering innovative digital solutions to address key challenges in healthcare reform and development—such as accessibility, affordability, and service standardization—they will help make health management in Hainan Province more scientific, operations more intelligent, and benefits more accessible to residents. This is what we value most,” he explained.

“During the formulation of the Measures, we conducted extensive and in-depth research to understand the pain points and needs of digital health innovation enterprises. During the ‘Hainan Digital Therapeutics Innovation Week’ alone, we held six conferences, bringing together digital therapeutics innovators in Hainan for in-depth discussions on key issues in the development of digital therapeutics. We aim to accelerate the establishment and growth of digital therapeutics companies in Hainan through these 21 measures, and strive to build Hainan into a global island for digital therapeutics innovation, a hub for innovative resources, and an industrial highland within two to three years. We believe that digital therapeutics hold great promise; by centering on disease treatment and health management, we can achieve dual-core drive through ‘Internet healthcare + digital therapeutics,’ spurring the aggregation and restructuring of a trillion-yuan digital healthcare industry,” added Zhang Yuhui.

As active promoters of digital therapeutics in China, VCBeat and VBInsight have played a significant role as industry think tanks in advancing this field. VCBeat was the first to identify and has continuously tracked Hainan’s innovative explorations in developing digital therapeutics. Serving as a think tank, VBInsight undertook research projects on digital therapeutics commissioned by the Hainan Provincial Health Commission and provided crucial consulting and decision-making support during the formulation of the current Measures.

Jiang Tianjiao, Dean of VCBeat, stated that digital therapeutics represent the most important innovative track in the healthcare industry, alongside pharmaceuticals and medical devices. Since the beginning of 2021, the global and Chinese digital therapeutics industries have experienced rapid growth, with several overseas companies completing initial public offerings (IPOs). The development of China’s digital therapeutics industry is largely in sync with global leading standards, but it also faces numerous challenges, particularly in clinical trials and business models.

“The introduction of Hainan’s Measures is highly timely, directly addressing the current pain points in the development of the digital therapeutics industry, particularly by providing clear support and encouragement in areas such as scientific research, clinical application, promotion, and payment. To our knowledge, this is the world’s first full-lifecycle policy supporting the digital therapeutics industry. We believe and anticipate that, following the implementation of the Measures, Hainan will become a global hub for the digital therapeutics industry and serve as the core engine driving the development of China’s digital therapeutics sector.” He expressed strong optimism about the future development of digital therapeutics.

As Jiang Tianjiao stated, since 2021, digital therapeutics have garnered widespread attention within the industry, with many local governments in China beginning to explore and introduce industrial promotion policies for digital therapeutics.

In July 2021, the General Office of the Hangzhou Municipal People’s Government issued the “Several Opinions on Accelerating the High-Quality Development of the Biopharmaceutical Industry.” Article 18 stated: “Encourage the application of medical artificial intelligence and new digital health services, and support local medical institutions in participating in pilot programs for the procurement of digital therapeutics products.” This marks the first policy in China to explicitly encourage the procurement of digital therapeutics.

Hunan Province has distinguished itself in the regulatory approval process. In December 2021, Hunan issued the "Announcement of the Hunan Provincial Medical Products Administration on Publishing the Registration Process for Class II Medical Devices and In Vitro Diagnostic Reagents," taking the lead in significantly reducing the statutory timeframe for obtaining Class II certification—from application submission to final certificate issuance—from the original 80 working days to just 40 working days, thereby accelerating the approval speed by 50%. The impact of this policy was quickly evident: currently, among digital therapeutics that have received approval from the National Medical Products Administration (NMPA), those with "Xiang Xie Zhu Zhun" (Hunan medical device registration approval) account for approximately 40%.

On January 25, 2022, the Hainan Provincial Health Commission released the "Hainan Province Digital Health '14th Five-Year' Development Plan," marking the first time digital therapeutics were included in a provincial-level plan in China, signifying recognition and promotion at the provincial level.

Article 22 states, “Explore pilot trials of digital therapeutics. Intensify promotional efforts for digital therapeutics, actively introduce domestically and internationally approved digital therapeutic products, and promote their application among eligible institutions and populations across the province to further meet residents’ needs for disease treatment and health management. Leveraging the policy advantages and industrial foundation of the Hainan Free Trade Port, we will advance the demonstration of digital therapeutic applications throughout Hainan in a stepwise manner and explore the establishment of a supportive policy framework for digital therapeutics. Through multiple measures to strengthen investment attraction, we aim to cultivate hubs of innovation and industrial clusters in digital therapeutics, build Hainan into a global island of innovation for digital therapeutics, promote the aggregation and restructuring of ‘digital therapeutics + internet healthcare,’ and create a new engine for the high-quality development of Hainan’s health industry.”

In June 2022, a sub-forum of the Digital Therapeutics Innovation Practice Forum at the 2022·6th Future Healthcare Top 100 Conference was held at the Binzhou High-Tech Zone Digital Medical Health Industrial Park. Attendees participated in the Roundtable on the Development of the Digital Medical Health Industry in Binzhou High-Tech Zone, discussing how to accelerate innovation in Binzhou’s digital therapeutics industry and speed up the development of the digital medical health sector. Binzhou aims to leverage the park’s focus on sleep disorders, chronic diseases, and rehabilitation, applying digital therapeutics thinking to drive the rapid development of the “medical-care-wellness” and “research-education-industry” value chains. This strategy seeks to enhance the park’s medical specialization and height of digital technological innovation, with the goal of establishing Binzhou as a benchmark city for the application and integrated innovation of digital therapeutics in China within three to five years.

The “Measures” issued by Hainan Province this month provide concrete implementation steps aligned with the direction set forth in the “Hainan Provincial 14th Five-Year Plan for Digital Health” released at the beginning of the year, specifying responsible executing departments and completion deadlines. This represents the most comprehensive policy to date supporting digital therapeutics.Notably, the timelines for implementing each measure are set extremely tight.The vast majority of measures will be implemented by the end of this year, with a few scheduled for completion by the end of October. This fully demonstrates Hainan Province’s determination to promote the development of the digital therapeutics industry and showcases the unique acceleration of development in the Hainan Free Trade Port!

The Measures consist of 21 articles, which can be categorized into six aspects: establishing a nationally leading clinical research demonstration base for digital therapeutics; accelerating the registration and approval of digital therapeutics products; actively promoting the application of digital therapeutics products; encouraging the exploration of diverse payment models; strengthening publicity for digital therapeutics and fostering industrial cluster development; and standardizing development alongside other supporting measures.

The first stage is the R&D phase.To establish a nationally leading demonstration base for clinical research on digital therapeutics, the Measures plan to set up digital therapeutic clinical trial centers in tertiary hospitals with advantageous disciplines in Hainan Province. This will be achieved by providing preferential support to clinical researchers from universities and hospitals in areas such as project applications and performance evaluation, and by strengthening the development of public service and management platforms, including digital therapeutic CDMOs and unified clinical platforms, thereby facilitating the integration of digital therapeutic enterprises with clinical practice and scientific research.。

As a representative of digital therapeutics CDMOs, SLANHEALTH is one of the earliest companies in China to strategically position itself in the digital therapeutics sector, having established a mature DTx-CDMO and full-process incubation system. Its person in charge told VCBeat that Hainan’s series of measures, including supporting the construction of digital therapeutics CDMO platforms and fostering high-quality digital therapeutics industry clusters, have effectively addressed the current pain points in the digital therapeutics industry chain.

Building a digital therapeutics (DTx) industry cluster requires the introduction or incubation of a large number of DTx products. Developing DTx products necessitates establishing a complete value chain from scratch. Currently, most domestic enterprises lack mature experience and resources in key areas such as mechanism discovery, design and development, efficacy validation, clinical trials, regulatory review and approval, and commercialization. CDMO’s end-to-end services can help these companies rapidly achieve product development and market launch.

During the preliminary phase of formulating relevant policies, Hainan conducted intensive surveys among companies involved in digital therapeutics. SLANHEALTH participated in these efforts and gained firsthand insight into Hainan’s determination and confidence in developing its digital therapeutics industry. Guided by comprehensive, full-cycle policies, the development of digital therapeutics is set to embark on a new chapter.

One of the most closely watched aspects of the “Measures” is the proposal to accelerate the registration and approval of digital therapeutics products.Hainan Province plans to accelerate the approval process for digital therapeutics through a series of measures, including issuing guidance documents on classified regulation and registration approval for digital therapeutic products, establishing a dedicated channel for registration counseling of Class II medical device digital therapeutics, creating a green approval channel for specific digital therapeutics, exploring a filing-based system for low-risk public health digital therapeutics, and encouraging the application of real-world data.。

A major highlight of this section is the proposal, for the first time in China, to implement a filing-based regulatory framework for digital therapeutics. This initiative will facilitate the rapid market entry of low-risk digital therapeutic products and significantly promote the application of real-world data in the approval process for medical devices.

In particular, regarding key aspects of digital therapeutics regulation, the Measures draw on international experience and, for the first time, propose to provide categorized explanations of the regulatory policies, regulatory documents, and operational guidelines required for each stage of the regulatory process. This will significantly reduce confusion among digital therapeutics companies during registration.

Furthermore, the Measures propose establishing a green approval channel for specific digital therapeutics and specify a time limit of completing the review and approval within three months after submission of the registration application. This timeframe is comparable to that required by Germany’s DiGA fast-track approval process, currently the only implemented green channel for digital therapeutics worldwide.

As for which digital therapeutics can enter the green channel, the Measures clearly specify that they must meet the requirements of “solid evidence-based support, high technological maturity, urgent clinical need in Hainan, and broad development prospects.” This is particularly relevant to the clinical trial centers mentioned in Article 1 of the Measures, which highlights digital therapeutics for conditions such as mental disorders, attention-deficit/hyperactivity disorder (ADHD) and autism in children, cancer, ophthalmic diseases, and sleep disorders.

Hainan holds advantages in institutional integrated innovation for the application of real-world data (RWD). As early as 2019, the Implementation Plan for the Pilot Program on Clinical Real-World Data Application in the Boao Lecheng International Medical Tourism Pilot Zone was released, initiating clinical RWD research focused on urgently needed imported drugs and medical devices within the Boao Lecheng Pilot Zone.

Due to their inherent characteristics, digital therapeutics products are generally considered to possess unique advantages in the collection of real-world data. Consequently, Hainan’s policy advantages in real-world studies undoubtedly hold considerable appeal for the digital therapeutics industry.

Regarding the application of digital therapeutics, the Measures propose promoting product adoption by establishing promotion bases and facilitating their integrated development with internet hospitals.Hainan Province is a leading hub for the development of internet hospitals in China, having achieved a certain level of industrial agglomeration. Integrating digital therapeutics into this ecosystem will foster mutual promotion between internet healthcare and digital therapeutics.

It is worth noting that the Measures also mention advancing the informatization of regional healthcare, integrating digital therapeutics with regional electronic medical record (EMR) databases and electronic health record (EHR) databases, and encouraging relevant departments and public welfare organizations to procure digital therapeutics products, thereby facilitating the local adoption of digital therapeutics.

Yang Leigang, General Manager of the Whole-Course Disease Management and Digital Therapeutics Center at Weimai, believes that the development of China’s digital therapeutics industry has entered a new stage, with many enterprises encountering practical core issues during their growth. The introduction of the “Measures” provides clear directional guidance and pragmatic supporting policies for implementation.

Among other provisions, the Measures encourage medical institutions to integrate digital therapeutics with internet hospital platforms and, for the first time, propose granting physicians the authority to prescribe digital therapeutics via internet hospitals. The introduction of this policy is undoubtedly of great significance to companies engaged in the research and application of digital therapeutics, as it will accelerate the translation of scientific and technological achievements into areas such as physicians’ out-of-hospital patient management and patients’ rehabilitative treatment.

“This empowers internet hospitals to meet the public’s multi-level and diverse healthcare needs. We are confident that, under the leadership and guidance of the Hainan Provincial Committee of the Communist Party of China, the Hainan Provincial People’s Government, and the Hainan Provincial Health Commission, digital therapeutics companies will surely achieve rapid development by leveraging the opportunities presented by these newly issued policy measures,” Yang Leigang told VCBeat.

Encouraging the exploration of diverse payment models is another major highlight of the Measures. Payment has long been considered a significant challenge in the development of digital therapeutics. Both startups and established industry giants have encountered certain difficulties in this area.

Leveraging policy-driven pilot initiatives, Hainan has consistently remained at the forefront of payment innovation exploration across China. For instance, the Boao Lecheng Global Special Drug Insurance, launched under the guidance of the Hainan Provincial Development and Reform Commission, the Hainan Provincial Healthcare Security Administration, the Hainan Bureau of the China Banking and Insurance Regulatory Commission, the Hainan Provincial Health Commission, and the Administrative Bureau of the Boao Lecheng International Medical Tourism Pilot Zone, represents a significant innovation in health insurance, offering novel approaches to insurance payment mechanisms in the pharmaceutical sector.

This innovative approach holds significant implications for digital therapeutics. Digital therapeutics greatly enhance the actuarial science of commercial insurance products. They enable commercial insurers to achieve cost containment through health management and facilitate precise pricing through customer segmentation.The Measures also continue these innovative approaches, proposing to explore product innovations in “digital therapeutics + commercial insurance,” including pilot initiatives in the Boao Lecheng International Medical Tourism Pilot Zone to incorporate digital therapeutics as health management services for special drug insurance, as well as specific measures such as developing an upgraded version of Hainan’s Huiminbao.

Meanwhile,“The Measures” also encourage the inclusion of digital therapeutics in the technical specifications and pricing scope of medical service items, and explore mechanisms for price formation and health insurance payment models for digital therapeutics.Digital therapeutics products or medical services with high clinical value, favorable economic evaluations, and affordability for both the medical insurance fund and insured individuals will benefit from this. Furthermore, Hainan plans to further explore the application of digital therapeutics in medical cost control and health management, as well as effective models for integrating digital therapeutics with the diagnosis-related group (DRG) payment system.

As a pioneer in integrating digital therapeutics with insurance in China, Bosstern Technology not only launched the country’s first dementia prevention insurance but also achieved the inaugural collaboration between digital therapeutics and city-specific supplemental health insurance (Hui Min Bao). Regarding the payment explorations outlined in the “Measures,” Qiu Yan, Partner at Bosstern Technology, believes that the “Measures” establish a three-tiered payment framework encompassing commercial insurance, out-of-pocket payments, and basic medical insurance. Each tier serves to legitimize and guide digital therapeutics enterprises, thereby addressing their revenue generation challenges.

He stated that the Measures not only incorporate global best practices but also highlight several innovative directions—such as special drug insurance, Huiminbao (inclusive commercial health insurance), hospital charge catalogs, and integration with DRGs—tailored to China’s medical insurance landscape and Hainan’s unique characteristics. These highly targeted provisions are expected to be well received by the digital therapeutics industry.

“Guided by this policy, we anticipate that digital therapeutics will empower healthcare institutions and primary care physicians through their core of rigorous medical science and user-friendly interactive formats, while also empowering patients themselves. We hope to achieve full coverage of digital therapeutics across Hainan Island as soon as possible, supporting the development of the ‘Hainan Model’ for digital health and establishing a national benchmark,” said Qiu Yan.

The “Measures” also propose to foster industrial clustering, strengthen promotion through conferences, research reports, and exhibition halls, and attract domestic and international digital therapeutics companies to establish operations by leveraging policy incentives.In particular, in introducing overseas digital therapeutics products, Hainan Province can leverage the advantages of the pilot program for real-world data research and application at the Boao Lecheng International Medical Tourism Pilot Zone to enable the initial trial of overseas products in China, and support the use of their real-world study data for product approval.

According to VCBeat, multiple digital therapeutics companies have already established or are about to establish their presence in the region, with an initial industrial cluster beginning to take shape. More than twenty leading digital therapeutics enterprises, including Viatris Pharmaceuticals (a Fortune 500 company), SLANHEALTH, Luming Health Technology (a digital therapeutics company incubated by Takeda China), Weimai, Good Doctor Hui, and Zhiyun Health, have proactively deployed and set up operations in Hainan.

In terms of supporting industry development, the Measures provide detailed supporting measures from aspects such as association alliances, industry standards, data security supervision, talent assurance, and capital support to bolster the growth of the local digital therapeutics industry.

The Hainan Free Trade Port holds policy advantages, particularly in the area of data security regulation, which is a major concern for the digital therapeutics industry. Currently, Hainan is implementing pilot programs for data security assessments. Enterprises with needs for cross-border data transfers can apply in accordance with the issued standards and procedures; upon approval, data can be transferred overseas in compliance with regulations, significantly reducing corporate risk. The relevant assessment standards, methods, and procedures are already being implemented.

Meanwhile, the Hainan Free Trade Port facilitates access to the overseas internet for Hainan-based enterprises engaged in business communications. This represents a significant advantage for attracting global digital therapeutics companies, as well as those with internationalization ambitions.

Notably, the “Measures” also specify the implementing entities and completion deadlines for each specific measure, offering a glimpse into the step-by-step approach to policy implementation.

Among the 21 policies, four measures are required to be completed by October 31: establishing a number of clinical trial centers for digital therapeutics; accelerating the development of public service and management platforms for digital therapeutics; creating a specialized guidance channel for the registration of Class II medical device digital therapeutic products; and issuing a catalog to encourage the development of digital therapeutics while establishing a green approval channel for specific types of digital therapeutics.

In addition, 14 policies are required to be completed by December 31; one policy is to be completed by the end of 2023; one policy is to be completed by the end of 2025; only the initiative to “explore a filing system for digital therapeutics and encourage the application of real-world data in product registration, approval, and post-market clinical validation” is designated as a “long-term undertaking.”

This means that the majority of the Measures must be fully implemented within a little over two months. The challenge is undoubtedly significant, yet Hainan Province’s sincere commitment to advancing the digital therapeutics industry is self-evident.

VCBeat believes that the release of the Measures holds significant importance for advancing digital therapeutics. As the first policy to provide full-cycle industrial support for digital therapeutics, the Measures were preceded by intensive industry research during the drafting phase, extensively gathering insights from stakeholders in the digital therapeutics sector. The document demonstrates a strong global perspective, with clear positioning and well-defined objectives. Highly targeted and practical, the Measures are expected to serve as a reference for other local governments, thereby promoting the development of digital therapeutics nationwide and contributing to the strengthening, optimization, and expansion of China’s digital economy. From another perspective, however, Hainan Province must accelerate the implementation of the Measures to maintain its leading position in regional competition within the digital therapeutics industry.

Buoyed by a recent string of favorable policies, digital therapeutics are poised to gain greater momentum and usher in a new phase of development. VCBeat will continue to closely monitor industry developments; stay tuned.