Nine Goals and Six Directions: How China's 2021 Two Sessions Will Transform Healthcare

March 4–5, 2021: The 2021 “Two Sessions”—the Fourth Session of the 13th National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and the Fourth Session of the 13th National People’s Congress (NPC)—convened as scheduled in Beijing.

The current “Two Sessions” are being held in the opening year of the 14th Five-Year Plan, which also marks the first year of China’s entry into a new stage of development. As outlined in the plan, the 14th Five-Year Plan period will be the first five years of embarking on a new journey to comprehensively build a modern socialist country and advance toward the second centenary goal, building on the momentum gained from having achieved a moderately prosperous society in all respects and realized the first centenary goal. In the long run, the significance of this year’s “Two Sessions” is substantial.

Regarding the 14th Five-Year Plan for healthcare, what specific motions, suggestions, and proposals will the attending deputies and committee members put forward? Which niche sectors within healthcare will entrepreneurs focus on? VCBeat (WeChat ID: Vcbeat) has screened and compiled the motions, suggestions, and proposals from the attending deputies and committee members, summarizing several key directions. These also represent the future development trends of the healthcare industry.

During the 13th Five-Year Plan period, China issued and implemented the Outline of the “Healthy China 2030” Plan, while the National People’s Congress promulgated and enforced laws and regulations such as the Basic Healthcare and Health Promotion Law and the Traditional Chinese Medicine Law. The National Health Commission has made every effort to advance the Healthy China initiative and promote a shift from a disease-centered approach to a health-centered one.

From 2015 to the end of 2019, the average life expectancy of residents in China increased from 76.3 years to 77.3 years. The maternal mortality ratio, infant mortality rate, and under-5 child mortality rate decreased from 20.1 per 100,000 live births, 8.1 per 1,000 live births, and 10.7 per 1,000 live births to 17.8 per 100,000 live births, 5.6 per 1,000 live births, and 7.8 per 1,000 live births, respectively. Major health indicators were generally better than the average levels of upper-middle-income countries, and the share of out-of-pocket health expenditure in total health expenditure dropped to 28.4%.

Overall, China’s healthcare sector made significant progress during the 13th Five-Year Plan period. So, what are the goals for the health sector under the 14th Five-Year Plan?

In the “Proposal of the Central Committee of the Communist Party of China on Formulating the Fourteenth Five-Year Plan for National Economic and Social Development and the Long-Range Objectives Through the Year 2035,” released at the end of last year, the Proposal put forward, with regard to the medical and health sector,“Improve the multi-tiered social security system,” “Comprehensively advance the construction of a Healthy China,” and “Implement the national strategy for actively responding to population aging”a key strategic plan. This also represents the goals that China’s healthcare sector needs to achieve over the next five years.

The Government Work Report, submitted for deliberation at the Fourth Session of the 13th National People’s Congress on March 5, outlined the Draft Outline of the 14th Five-Year Plan (2021–2025) and the Long-Range Objectives Through the Year 2035, providing more detailed and specific health goals for the 14th Five-Year Plan period.

which mentions“Comprehensively advance the construction of a Healthy China, increasing average life expectancy by another year; implement the national strategy for actively responding to population aging, promote the achievement of an appropriate fertility level, and gradually delay the statutory retirement age; improve the multi-tiered social security system, raising the participation rate in basic old-age insurance to 95%.”objective.

These targets are broken down into nine specific goals for 2021, namely the nine goals mentioned in the Government Work Report delivered by Premier Li Keqiang on March 5 at the Fourth Session of the 13th National People’s Congress.

1. Advance the development of the healthcare system.

2. Continuously advance the Healthy China Initiative, conduct in-depth patriotic health campaigns, deepen the reform of the disease prevention and control system, innovate mechanisms for medical-prevention collaboration, improve the public health emergency response and material supply guarantee systems, and establish a stable funding mechanism for public health undertakings.

3. Deepen the comprehensive reform of public hospitals, expand pilot programs for the establishment of National Medical Centers and Regional Medical Centers, strengthen the workforce of general practitioners and village doctors, enhance the service capacity of county-level medical institutions, and accelerate the development of a tiered diagnosis and treatment system.

4. Uphold equal emphasis on traditional Chinese and Western medicine, and implement major projects to revitalize and develop traditional Chinese medicine.

5. Support private medical institutions and promote the standardized development of “Internet + Medical Health.”

6. Strengthen the regulation of food, drugs, and vaccines.

7. Optimize convenient measures such as appointment-based diagnosis and treatment, striving to ensure that patients with serious, acute, or critical conditions receive timely care.

8. The per capita fiscal subsidy standards for resident basic medical insurance and basic public health services will be increased by RMB 30 and RMB 5, respectively, to promote provincial-level pooling of basic medical insurance and direct cross-provincial settlement of outpatient expenses.

9. Establish and improve the outpatient mutual aid guarantee mechanism, gradually include outpatient expenses in the reimbursement scope of the pooled fund, improve the supply guarantee and price stabilization mechanism for scarce drugs, and adopt measures such as including more medications for chronic and common diseases as well as high-value medical consumables in centralized volume-based procurement, thereby significantly reducing the medical and pharmaceutical burden on patients.

These objectives also represent the future development priorities of the healthcare industry and will be implemented within the year. As per convention, detailed implementation rules will be rolled out in quick succession thereafter.

We have compiled selected motions, recommendations, and proposals submitted by conference delegates and committee members in the field of healthcare (as of March 5). Overall, they can be categorized intoInheritance and Development of Traditional Chinese Medicine、Bridging the “Digital Divide” for the Elderly、Strengthening Medical Insurance Coverage and Supplemental Commercial Insurance、Encourage and Support "Domestic Substitution" of Medical Devices、Digital Health ApplicationsandStrengthening Primary HealthcareSix Major Directions.

During the 13th Five-Year Plan period, China’s traditional Chinese medicine (TCM) industry experienced rapid development. Particularly during the COVID-19 pandemic, the outstanding performance of TCM in treating COVID-19 demonstrated that TCM can be significantly more effective than Western medicine in managing certain conditions, holding immense potential after digital transformation. Meanwhile, given the pronounced trends of population aging and sub-optimal health status in China, there is substantial demand for digital TCM solutions in healthcare services.

It is precisely for this reason that how to better inherit and develop Traditional Chinese Medicine (TCM) has become a key focus for deputies to the National People’s Congress and members of the Chinese People’s Political Consultative Conference from relevant industries. In general, centralized procurement of TCM products and digital empowerment are the two areas receiving the most attention.

First is the centralized procurement of traditional Chinese medicine (TCM). Judging from the current state of the TCM industry in China, the situation is far from optimistic. There are over 5,000 TCM manufacturers and more than 10,000 TCM approval numbers across China, with annual pharmaceutical revenues reaching approximately RMB 800 billion. The TCM production sector is widely characterized by fragmentation, dispersion, and disorder, which not only wastes social resources but also increases the workload and difficulty of government regulation.

Lu Qingguo, Chairman of Chenguang Biotech and a Deputy to the National People’s Congress, has proposed accelerating the inclusion of traditional Chinese medicine (TCM) and TCM formula granules in centralized volume-based procurement. In recent years, China’s implementation of drug centralized procurement has achieved remarkable results, significantly reducing medical insurance expenditures and addressing inflated drug prices. Meanwhile, it has substantially curbed the prevalent misconduct of kickbacks in drug purchasing and sales, while guiding pharmaceutical manufacturers to de-emphasize marketing and strengthen management.

He suggested that conditions should be created to implement centralized drug procurement for proprietary Chinese medicines as soon as possible, allowing more traditional Chinese medicine (TCM) manufacturers to compete fairly; meanwhile, the standard system should be improved by incorporating TCM formula granules into the centralized volume-based procurement and bidding system, thereby promoting the better development of TCM formula granules.

Xiao Wei, Chairman of Jiangsu Kanion Pharmaceutical Group and a deputy to the National People’s Congress, also recommended that China establish a centralized volume-based procurement (VBP) management model tailored to the complex characteristics and unique attributes of traditional Chinese medicine (TCM), and formulate VBP policies based on a “classification + generic name” approach. He further suggested developing a scientific drug cost and price assessment system during the centralized procurement process, setting reasonable price floors for price comparisons in VBP, thereby ensuring the product quality of proprietary Chinese medicines.

Beyond centralized procurement, another major topic is how to empower traditional Chinese medicine (TCM) through digital technologies, particularly the Internet of Things (IoT). Currently, China’s IoT sector is developing robustly, significantly enhancing industrial integration and innovation while driving high-quality development in the real economy. Meanwhile, the COVID-19 pandemic has accelerated public acceptance of digital technologies such as the IoT.

Lin Fanru, a member of the National Committee of the Chinese People’s Political Consultative Conference and Chairman of Xiangyu Group, has proposed accelerating the integration of the traditional Chinese medicine (TCM) industry with the Internet of Things (IoT). By seizing the momentum of IoT development, he aims to promote the inheritance and innovation of TCM, thereby capturing the opportunity to achieve leapfrog development and even assume a global leadership position.

Lin Fanru suggests accelerating the integration of the traditional Chinese medicine (TCM) industry with the Internet of Things (IoT) to promote the inheritance, innovation, and development of the TCM sector. Specifically, this can be approached from three aspects: First, leverage IoT to drive the digital transformation of the TCM industry by introducing digital technologies to empower the stages of TCM herbal cultivation, production, and distribution.

Secondly, an information platform for the traditional Chinese medicine (TCM) industry should be established to integrate the primary, secondary, and tertiary sectors of TCM. This platform would consolidate information ranging from upstream cultivation of Chinese herbal medicines and TCM manufacturing to downstream customer demand, thereby fostering the healthy and sustainable development of the TCM industry.

Finally, the inheritance and innovative development of the traditional Chinese medicine (TCM) industry should be promoted through Internet of Things (IoT) technology. This can be primarily achieved from two aspects: leveraging digital technologies to facilitate the inheritance of the TCM industry, and vigorously developing “Internet + TCM” to drive its innovative development.

Li Zhenguo, Chairman of Jiuzhitang and a Deputy to the National People’s Congress, submitted proposals and recommendations on promoting the high-quality development of traditional Chinese medicine (TCM). He believes that advancing the TCM sector should focus on five key areas.

These five aspects include improving the construction of primary healthcare institutions to establish the frontline of the public health system; strengthening the training of traditional Chinese medicine (TCM) personnel to lay the foundation for the inheritance and development of TCM; fostering cultural confidence and establishing a development model that aligns with the inherent laws of TCM development; leveraging technology to promote the modernization of TCM; and enhancing public awareness and understanding of TCM to better serve the people.

Currently, China is witnessing the convergence of accelerating population aging and the Fourth Industrial Revolution, which has brought the "digital divide" facing the elderly into sharp focus. The sudden outbreak of the COVID-19 pandemic in 2020 made health codes a mandatory requirement for travel, and healthcare institutions have increasingly shifted their service resources online. However, many older adults encounter significant difficulties in utilizing digital technologies.

As of December 2020, internet users aged 60 and above accounted for only 11.2% of the total online population, significantly lower than their proportion in the general population. Meanwhile, among China’s approximately 274 million elderly mobile phone users, only about 134 million seniors used smartphones to access the internet. The “digital divide” affecting the elderly has increasingly become a hot topic.

Lei Jun, a deputy to the National People's Congress and Chairman and CEO of Xiaomi Group, has proposed measures to help the elderly integrate into digital life. He advocates for the swift inclusion of digital services for the elderly in the construction of national information infrastructure, the formulation of medium- to long-term goals for age-appropriate technology adaptation, the clarification of key development directions and phases, and the strengthening of data security and privacy protection for the elderly through sound laws and regulations.

Meanwhile, Lei Jun suggested that relevant authorities should establish standards for age-appropriate smart technologies; promote the integrated development of age-appropriate smart technology scenarios with emerging business models; and guide and encourage societal participation in the promotion and dissemination of age-appropriate smart technologies. Currently, the Ministry of Industry and Information Technology has launched a one-year special campaign since January 2021 to promote age-appropriate and accessibility modifications for websites and mobile applications.

One of the proposals submitted by Robin Li, Chairman and CEO of Baidu and a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), also addresses “population aging.” He recommends accelerating the integration of smart elderly care services into communities, leveraging technology to make seniors’ lives simpler and happier. Currently, population aging is intensifying in China; while 90% of older adults rely on community-based home care, very few communities are equipped to systematically deliver such elderly care services.

CPPCC Member Li Yanhong recommends that relevant authorities strengthen policy guidance to encourage the integration of more smart devices into communities, thereby expanding and deepening smart elderly care services. Given the current shortage of human resources for community-based elderly care, the introduction of smart devices such as smart speakers can not only facilitate the daily lives of older adults but also help communities achieve intelligent management of elderly care, better meeting their needs.

The government can achieve its objectives through a three-step approach. The first step is to accelerate the intelligent transformation of medical services and health management devices for the elderly, leveraging smart devices such as smart speakers and wearables to facilitate the collection and tracking of health and medical data, thereby enabling better health management.

Meanwhile, it is also necessary to accelerate the development of an age-friendly integrated management information service platform embedded in smart devices, integrating community service resources with healthcare and medical resources to provide comprehensive services for the elderly, including family doctor services, chronic disease management, and emergency call assistance.

The second step is to guide enterprises in expanding the supply of age-friendly smart devices, comprehensively popularizing AI assistants centered on voice and integrated with multimodal interactions such as eye gaze and gestures, and embedding them into devices commonly used by older adults, thereby enabling the elderly population to enjoy the convenience brought by technological advancements in various scenarios of daily life.

Finally, leveraging AI products and technologies, pilot smart elderly care initiatives will be launched in communities with larger elderly populations and higher demand for caregiving support in cities that meet the necessary conditions.

Wang Xiaochuan, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and CEO of Sogou, proposed in his submission to strengthen digital economy industry planning from three aspects to meet the needs of an aging society.

First, the age-friendly adaptation of internet applications is not the sole consideration; greater emphasis should be placed on ensuring the comprehensiveness and balance of digital economy industrial policies under the fundamental premise of an aging society. Leveraging technologies such as artificial intelligence and 5G to drive industrial upgrading and address labor shortages will further enhance the international competitive advantage of China’s manufacturing sector.

Secondly, mobilize the enthusiasm of enterprises as market entities by adopting a dual approach of encouragement and support alongside comprehensive regulation, thereby establishing recommended industry standards for age-friendly adaptations. Products and services that actively engage in age-friendly renovations should be included in a demonstration application catalog and granted incentive policies such as expanded promotional channels and preferential fiscal and tax treatments, thus stimulating market vitality in age-friendly adaptations.

Finally, we should aggregate social forces to foster synergy within and across industries, fully leveraging the respective roles of research institutions, public welfare organizations, industry associations, and news media.

Overall, how digital technology can better serve the elderly will be a major focal point in the near future.

Strengthening health insurance coverage has always been a hot topic at the "Two Sessions," and this year is no exception. As the centralized procurement policy continues to deepen, healthcare insurance funds are being utilized more effectively, making how to better expand coverage a significant focus of attention.

Wang Weidong, Chairman of RemeGen and a Deputy to the National People’s Congress, proposed eliminating the time restriction for newly approved innovative biologics to participate in national medical insurance negotiations, thereby ensuring seamless alignment between drug approval and insurance coverage. He emphasized that, given the long development cycles, substantial R&D investments, and high risks associated with biologic drugs, reasonable profit margins for enterprises should be taken into account when determining negotiation prices. This approach aims to fully stimulate corporate innovation and promote the healthy development of the biopharmaceutical industry.

Li Xiaoqin, a deputy to the National People's Congress and Vice President of Guangzhou University, has proposed including depression and psychological counseling in the list of chronic diseases covered by outpatient medical insurance. Depression has a high incidence rate and a long disease course, making it the single most prevalent mental disorder. However, public awareness of depression remains insufficient, and access to intervention and treatment is limited. Currently, depression is not included in the list of chronic diseases covered by outpatient medical insurance.

Addressing the existing issues in the current prevention and treatment of depression, Li Xiaoqin recommends strengthening public education and awareness campaigns on common knowledge about mood disorders such as depression, enhancing residents’ mental health literacy, and eliminating the stigma and prejudice associated with depression. Meanwhile, regular epidemiological surveys on depression should be conducted to establish a stepped-care service system for depression screening. Furthermore, social security measures should be refined by including depression and psychological counseling in the list of chronic diseases covered by outpatient medical insurance.

In addition to depression, chronic skin diseases have also drawn the attention of NPC deputies and CPPCC members. Chronic skin diseases, including psoriasis, vitiligo, and atopic dermatitis, are immune-mediated, chronic, relapsing, inflammatory systemic conditions that affect the entire body. The etiologies and pathogenic mechanisms of many such diseases remain unclear. Most diagnosed patients present with complex etiologies, require long-term or even lifelong treatment, face persistently high medical costs, and suffer from significantly compromised quality of life.

Lu Chuanjian, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), Vice Chairperson of the Guangdong Provincial Committee of the China Democratic League, and Vice President of Guangdong Provincial Hospital of Traditional Chinese Medicine, has proposed the introduction of relevant medical insurance policies to include chronic skin diseases in the scope of outpatient chronic disease coverage. This includes fully incorporating integrated traditional Chinese and Western medicine treatment regimens and standard treatment costs into the medical insurance reimbursement system to guide patients toward receiving standardized care. Additionally, measures such as dynamically including relevant innovative drugs and biologics in the medical insurance reimbursement list should be implemented to enhance the level of medical security for chronic skin diseases.

Zhou Yanfang, Deputy General Manager of the Shanghai Branch of CPIC Life Insurance and a Deputy to the National People’s Congress, proposed in her legislative proposal to clarify the business positioning of “Huiminbao” (inclusive commercial health insurance) and incorporate it into the regulatory framework for commercial health insurance.

As a supplement to the basic medical security system, “Huiminbao” (city-specific supplemental medical insurance) experienced rapid growth in 2020. By early December 2020, it had expanded to more than 50 cities across China, covering over 25 million participants enrolled in basic medical insurance. However, its inclusive nature necessitates operation on a break-even basis with minimal profits. Coupled with high promotional and operational costs and low premium rates, sustaining long-term operations poses significant challenges.

Zhou Yanfang believes that the long-term, healthy development of “Huiminbao” (city-specific supplementary medical insurance) should adhere to the principle of sustainability in inclusive finance, establish a mechanism for reconciling public and private interests, and foster an interactive pattern of co-construction, co-governance, and shared benefits. Efforts should be made to avoid the risks posed to ongoing operations by blind project launches in certain regions, which have led to elevated sales costs and inadequate coverage performance.

Therefore, the government needs to clarify the business positioning of “Huiminbao,” shifting from government-customized models to market-oriented operations. Furthermore, by issuing relevant documents to regulate the development of “Huiminbao” businesses, promoting data sharing between basic medical insurance and commercial health insurance, and exploring regional city-customized commercial medical insurance, a systematic support framework for the sustainable development of “Huiminbao” can be established.

Feng Danlong, a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and Senior Advisor to Pfizer China, has proposed accelerating the establishment of a national-level commercial health insurance information-sharing and support platform, while strengthening guidance and standardized management. Meanwhile, the government should provide institutional and policy incentives to streamline commercial insurance regulation (“subtraction”) and enhance supportive services (“addition”), thereby fully mobilizing and leveraging the roles of enterprises and the market.

Wang Bin, Chairman of China Life Insurance (Group) Company and a member of the National Committee of the Chinese People's Political Consultative Conference, submitted a proposal outlining four recommendations. The proposal aims to better leverage the advantages of financial insurance to promote the development of a “three-pillar” old-age security system, which is based on basic old-age insurance, supplemented by enterprise (occupational) annuities, and coordinated with personal savings-based old-age insurance and commercial old-age insurance.

These four recommendations include increasing tax incentives, strengthening the connectivity and conversion mechanisms among the three pillars, guiding pension financial products to develop distinctive competitive advantages, and advancing reforms of the three-pillar system through pilot programs.

As a key industry for future development in China, the pharmaceutical and medical device sector has consistently drawn significant attention. Centered on this topic, deputies to the National People’s Congress and members of the Chinese People’s Political Consultative Conference have pooled their wisdom and efforts, putting forward numerous motions, recommendations, and proposals.

Yu Xubo, Deputy to the National People’s Congress and Chairman and Party Secretary of China General Technology Group, proposed innovating state-owned enterprise-run healthcare services and expanding the big health industry by fully leveraging China General Technology Group’s core strengths in medical care to build a world-class pharmaceutical and healthcare group.

As one of the three central state-owned enterprises (SOEs) approved by the State-owned Assets Supervision and Administration Commission (SASAC) to focus primarily on healthcare, China General Technology Group holds significant advantages in hospital operations managed by SOEs, with medical services constituting one of its core business segments. Currently, as a central SOE specializing in pharmaceuticals and healthcare, the Group has undertaken the restructuring and integration of medical institutions from 17 central and local SOEs. It now oversees 154 medical institutions across 21 provinces and municipalities nationwide, with a total of 32,000 hospital beds and an annual outpatient and emergency visit volume of 16 million. These facilities provide healthcare services to nearly 5 million employees of central SOEs as well as the general public.

He suggested that, going forward, China General Technology Group should fully leverage its core strengths in the healthcare sector to build a world-class pharmaceutical and healthcare industry group.

Dai Lizhong, Chairman of Sansure Biotech and a deputy to the National People’s Congress, also recommended that during the 14th Five-Year Plan period, the government should actively support leading biopharmaceutical enterprises with strong innovation capabilities to develop flagship products and industry leaders with international competitiveness. He called for vigorous development of a multi-tiered capital market to support technological innovation, suggesting that the STAR Market further strengthen its technology-oriented attributes in serving the real economy and facilitate the listing of more hard-tech enterprises.

Li Yan, a deputy to the National People’s Congress and President of Qilu Pharmaceutical Group, has recommended that China promptly introduce top-level policies specifically designed to support the development of the biopharmaceutical industry, providing policy support in areas such as review and approval processes and domestic substitution. Specifically, efforts should focus on four aspects: First, promote industrial upgrading by enhancing the systematic, holistic, and coordinated nature of policies; second, accelerate review and approval processes to further stimulate corporate innovation enthusiasm; third, drive the innovative development of key technologies; and fourth, strengthen the stability and competitiveness of the biopharmaceutical industry’s supply and value chains.

Zhou Yunjie, President of Haier Group and a Deputy to the National People’s Congress, proposed in his motion to further expand the application scenarios for domestically produced medical devices, thereby mitigating security risks associated with imported medical devices concerning China’s medical diagnostic and therapeutic data, as well as patient records.

Currently, imported medical devices account for the majority of the market share in core hospital departments due to their consistent quality and strong reputation. In particular, the domestic market for high-end medical devices, such as radiotherapy and chemotherapy equipment and imaging systems, has long been monopolized by multinational corporations. This has resulted in a substantial outflow of procurement funds to these global giants and has raised concerns regarding information security.

Therefore, as a crucial foundation of the national healthcare security system and a high-tech industry prioritized for development by the state, whether the high-end medical device sector can achieve “domestic substitution” is vital to the development of China’s medical device industry. In fact, domestically produced medical equipment has already achieved key breakthroughs in the high-end medical device segment, which has long been dominated by foreign brands.

Representative Zhou Yunjie proposed that, starting from the perspective of national public health security, the strategic importance of domesticating medical devices should be elevated; continued support should be provided for the R&D and technological upgrading of domestically produced medical devices to master core technologies.

Specifically, efforts should be made in two areas: first, accelerating the implementation of relevant special plans to expand the application and promotion of domestically produced medical devices. Second, it is recommended that the state continue to strongly support the research and development and technological upgrading of domestically produced medical devices, increasing financial investment focused on high-end medical devices with high technical content.

Sun Piaoyang, Chairman of Hengrui Medicine and a Deputy to the National People's Congress, proposed addressing the issue of excessive duplication in innovative drugs through top-level policy guidance, including measures related to medical insurance and market access. He further advocated for accelerating drug review and approval processes to gradually narrow the gap with international standards; establishing a value assessment system for innovative drugs that classifies them based on clinical needs and applies differentiated policies; and promoting the simplification of access procedures for innovative drugs covered by medical insurance negotiations to facilitate their availability in hospitals and pharmacies.

In recent years, the market environment for innovative drugs in China has continued to improve. However, excessive duplication of certain drug candidates has raised concerns within the industry. This is particularly evident with PD-1 inhibitors: currently, there are eight PD-1 drugs on the market in China, with dozens more under development. Sun Piaoyang suggests that China should draw lessons from U.S. policies by adjusting its new drug approval and review processes as well as medical insurance reimbursement mechanisms. By differentiating between first-in-class entrants and subsequent followers, these measures would encourage innovation and help minimize homogeneous competition.

In his proposal, Chen Baohua, a deputy to the National People's Congress and President of Huahai Pharmaceutical, recommended establishing and improving China’s pharmaceutical patent linkage system. The pharmaceutical patent linkage system refers to a framework that integrates the drug marketing approval process with procedures for resolving pharmaceutical patent disputes, thereby aligning the functions of drug regulatory authorities with those of patent administration departments.

This system encompasses or is associated with a series of mechanisms, including patent term extension, abbreviated new drug applications (ANDA), patent challenges, and first-generic exclusivity. It serves as a foundational and critical framework directly impacting the protection of the patented drug industry, the high-quality development of the generic drug sector, and the substitution of generic drugs for brand-name counterparts. Many developed countries have long established patent linkage systems and implemented related policies to promote the substitution of generic drugs and foster industrial growth.

Chen Baohua believes that the construction of China’s drug patent linkage system is seriously lagging, with unreasonable and incomplete provisions that dampen the incentive for generic drug manufacturers to challenge patents and strive for first-to-file generic approval, thereby hindering the development of China’s generic drug industry and the substitution of originator drugs by generics. Therefore, it is essential to deepen reforms in related systems and accelerate the establishment and improvement of China’s “patent linkage” system for pharmaceuticals.

He proposed establishing and improving China’s pharmaceutical patent linkage system by focusing on seven aspects: accelerating the revision and improvement of the “Catalogue of Marketed Drugs in China”; refining the patent term extension system; enhancing the market exclusivity period for first generic drugs; establishing an abbreviated new drug application (ANDA) system; clearly defining the scope of “first generic approval date” and “first generic applicant”; establishing mechanisms related to patent linkage to ensure its effective implementation; and leveraging the “pull” effect in the utilization phase and the “safeguard” role in the regulatory phase.

Shen Nanpeng, a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and Founding and Managing Partner of Sequoia Capital China, proposed in one of his submissions to optimize the fifth set of listing criteria for the STAR Market to make them more operational, thereby supporting R&D and innovation in medical device companies.

The fifth set of standards under the Listing Rules for Stocks on the STAR Market requires that “the projected market capitalization be no less than RMB 4 billion; main businesses or products must be approved by relevant national authorities, with substantial market potential and phased achievements already attained. Pharmaceutical companies must have at least one core product approved to commence Phase II clinical trials, while other enterprises aligned with the positioning of the STAR Market must demonstrate clear technological advantages and meet corresponding conditions.”

However, an awkward fact remains: although more than 40% of the companies that chose Listing Standard No. 5 in 2020 were pharmaceutical firms, the only medical device company that attempted to apply under Standard No. 5 had its applicable standard changed from No. 5 to No. 2 during the review process. As a result, no medical device company has yet gone public under Listing Standard No. 5.

This is because the detailed implementation rules for medical device companies applying under the fifth set of listing standards remain unclear, thereby increasing the difficulty for both corporate filings and substantive regulatory review. To enhance the practical applicability of the fifth set of standards, Shen Nanpeng proposed two recommendations: first, to define the classification criteria for medical device company filings and clarify the benchmarks for “achieving phased results”; second, to appropriately and dynamically adjust the guidelines for evaluating sci-tech innovation attributes, introducing customized assessment criteria tailored to the specific characteristics of medical devices.

He believes that the further clarification of review priorities and the refinement of listing operational guidelines under the fifth set of criteria for the STAR Market will help more R&D-driven medical device companies with strong scientific and technological innovation credentials stand out, thereby accelerating their R&D and the commercialization of their achievements.

Overall, during the 14th Five-Year Plan period, the pace of “domestic substitution” for pharmaceuticals and medical devices will further accelerate. This is also critical to building China’s future competitive industries.

During the 2021 “Two Sessions,” numerous motions, recommendations, and proposals focused on the field of digital healthcare. These submissions offered valuable insights ranging from macro-level policies to micro-level implementation, generating high expectations for the future of digital health.

Ma Huateng, a deputy to the National People’s Congress and Chairman and CEO of Tencent, proposed in his legislative suggestions that pilot innovation programs should be launched in specific sectors of the digital economy. He noted that China has developed a digital economy model distinct from those of both the United States and Europe, establishing relative advantages in many areas and aspects. He recommended initiating government-guided, market-participated innovation pilots in specific fields such as internet-based education, internet healthcare, and fintech.

He believes that attention should be paid to the digital transformation and upgrading of traditional industries, so as to reduce the impact on practitioners in the original business formats caused by uncontrolled digital upgrades. Internet companies, especially platform-based enterprises, should prioritize safety over development, strengthen business ethics rules, and place innovation under effective supervision.

Furthermore, we should further promote synergy among the government, market, society, and enterprises, actively explore innovative regulatory and governance models, strengthen corporate social responsibility and compliance-driven development, ensure that the benefits of the digital economy are shared across society, forge a new path for digital economy governance with Chinese characteristics, build competitive advantages for future development, and contribute Chinese solutions and wisdom to global digital economy governance.

Lei Jun, CEO of Xiaomi Group and a deputy to the National People’s Congress, put forward proposals on how digital healthcare can empower the county-level medical service system. He argued that the level of digitalization in county-level primary healthcare systems still needs to be strengthened, the efficiency of early warning and resource allocation can be further improved, and there is an urgent need for a more balanced distribution of medical resources. Therefore, China should promote the interconnectivity and sharing of medical and preventive care data at the county level, striving to achieve comprehensive coverage.

Meanwhile, he also recommended encouraging the use of cutting-edge digital technologies to strengthen the analysis and application of medical data. He stated that the government could promote the effective implementation of relevant policy guidelines, leveraging digital technologies such as big data, artificial intelligence, and cloud computing to achieve rapid processing and accurate interpretation of medical data, while robustly safeguarding personal privacy.

During the pandemic, digital technologies represented by health codes were widely adopted; however, the lack of unified data standards and information across different regions has led to numerous issues. As a typical example, this underscores the urgent need for interoperability of medical data.

Huo Yong, a member of the National Committee of the Chinese People’s Political Consultative Conference and Director of the Department of Cardiology at Peking University First Hospital, proposed in his submission that medical data standards should be unified across all regions. He stated that due to the lack of an interconnected public service big data platform, information software systems in different regions were incompatible during the COVID-19 pandemic, leading to a situation where health codes issued by various localities were not mutually recognized, resulting in the chaotic phenomenon of myriad non-interoperable health codes.

To address this issue, localities can explore using the national ID number as the unique identifier and replacing healthcare facility visit cards with residents’ electronic health codes. By accelerating the standardized adoption of these electronic health codes, it will be possible to enable the cross-institutional sharing and access of medical health information—including electronic medical records, laboratory and diagnostic test results, and medical imaging data—thereby resolving the problem of “one card per hospital with no interoperability.”

Furthermore, he recommended strengthening the informatization infrastructure across hospitals at all levels, improving the development of internal and external information platforms, and enhancing hospital data quality and data application capabilities. Leveraging high-quality patient data, this approach aims to optimize the tracking and management of patients with chronic diseases, as well as enable rapid response and handling for critically ill patients. Additionally, by promoting the construction and adoption of 5G and the Internet of Things (IoT), it seeks to foster the development of smart cities and smart healthcare service systems.

To mitigate the risk of data privacy breaches, Huo Yong further recommended establishing and refining a closed-loop management process for personal data protection in medical informatization initiatives. This includes disseminating relevant laws and regulations, developing and promoting implementation guidelines, and instituting corresponding review and management systems, thereby ensuring continuous safeguarding of personal data security throughout the development and application of medical information systems.

Hu Yu, a member of the National Committee of the Chinese People’s Political Consultative Conference and President of Union Hospital affiliated with Huazhong University of Science and Technology, also pointed out that China’s smart healthcare industry, initially modeled after internet hospitals, has begun to take shape. However, it still faces challenges such as low service quality, limited interoperability, and an imperfect legal and regulatory framework.

He recommended that China should further expand smart healthcare services covering the entire life cycle. It is necessary to improve “smart + elderly care” services and increase the usage rate of health and medical apps among the elderly through training; promote “smart + medical prevention” services, combine with the construction of grid-based medical consortiums, and carry out continuous health monitoring and standardized treatment for residents.

Insufficient technical capabilities and personnel quality at primary healthcare institutions have long been a major challenge hindering the implementation of tiered diagnosis and treatment in China. This issue was starkly exposed during the COVID-19 pandemic, underscoring the urgent need for resolution. Enhancing primary healthcare and disease prevention and control capacities will be a key determinant in whether China can achieve its “Healthy China” goals in the future.

Yu Xubo, a deputy to the National People’s Congress and Chairman and Party Secretary of China General Technology Group, presented his views on the transformation and development of secondary hospitals in his proposals. He recommended integrating hospitals affiliated with central state-owned enterprises into local public health development plans to promptly strengthen the national healthcare system.

Among them, some secondary hospitals should transition toward functions that better serve communities and elderly care. By establishing a strong presence at the grassroots level, they can effectively meet the public’s demand for high-quality, diversified primary healthcare services.

Geng Funeng, a deputy to the National People’s Congress and Chairman of Haoyishen Pharmaceutical Group, proposed that tiered diagnosis and treatment be effectively implemented by encouraging and supporting physicians from secondary-and-above medical institutions to establish private clinics, and by promoting “Internet + Healthcare” models in primary care facilities. These measures aim to strengthen the foundational layer of the healthcare system and alleviate the public’s difficulties in accessing medical services.

Currently, village doctors face multiple challenges in their practice, including insufficient professional competence and a lack of basic medical facilities. Due to limited attractiveness of rural areas, the proportion of new entrants among village doctors has been extremely low in recent years. The majority of village doctors are aging, with 20%–30% of them continuing to work beyond the statutory retirement age. Furthermore, the village doctor workforce is generally characterized by low educational attainment and limited professional knowledge and skills, resulting in a skill mix that fails to meet clinical needs.

In addition to the insufficient professional competence of village doctors, the hardware support for village clinics also needs improvement. Although rural medical and health resources saw some enhancement during the poverty alleviation campaign, the lack of basic medical facilities remains particularly evident in financially constrained areas.

Geng Funeng hopes to help village doctors, or provide preventive and control services to villagers in areas without village doctors, through models such as medical alliances, medical consortia, or the integrated management of township health centers.

He also noted that private clinics, as an important component of primary healthcare institutions, have made significant contributions to managing common, frequently occurring, and chronic diseases among local populations, yet they lack adequate policy and resource support. Therefore, while strengthening the standardized management of private clinics, China should ensure equal treatment in terms of relevant policies and resources for both public and non-public primary healthcare institutions. This approach will consolidate the role and position of private clinics in delivering primary healthcare services, encourage greater inflow of social capital and medical resources into the clinic sector, and thereby reinforce the foundational layer of the primary healthcare service network.

Feng Danlong, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and Senior Advisor to Pfizer China, has recommended that relevant national authorities promptly conduct investigations and strengthen China’s grassroots vaccination workforce through comprehensive measures, including appropriately increasing the authorized headcount and number of vaccination personnel, enhancing their professional competencies, and improving compensation and benefits.