Nine A-Share Listed Companies Involved in China's 2017 National Healthcare Insurance Negotiation List of 44 Drug Products

Recently, the Ministry of Human Resources and Social Security (MOHRSS) issued a notice stating that, in accordance with the requirements of the previously released National Reimbursement Drug List (NRDL), it had determined 44 drug varieties for inclusion in the negotiation scope of the 2017 National Basic Medical Insurance, Work-Related Injury Insurance, and Maternity Insurance Drug List. This decision followed communications with manufacturers regarding their negotiation intentions for the drugs proposed by expert reviewers.

VCBeat (WeChat: vcbeat) has obtained the list of drugs included in the negotiation scope, which shows that the therapeutic areas of these drugs are primarily focused on oncology, cardiovascular and cerebrovascular diseases, hematology, and other fields. Among them, 26 varieties are imported, and 18 varieties are domestically produced, involving multiple manufacturers.

The lead negotiating departments, including the Ministry of Human Resources and Social Security (MOHRSS), adhere to the principle of “clinical necessity and proven efficacy” in adjusting the National Reimbursement Drug List (NRDL). In this regard, the MOHRSS has been continuously refining the drug negotiation and market access mechanism to ensure that new drugs enter clinical practice promptly at reasonable prices, thereby meeting medical needs. Meanwhile, in compliance with healthcare expenditure control requirements, the MOHRSS engages in negotiations with pharmaceutical companies to determine the final reimbursement prices, striking a balance between cost containment objectives and corporate interests.

However, generally speaking, inclusion in the National Reimbursement Drug List (NRDL) entails a significant price reduction. Taking the drugs included in the first batch of negotiated lists last year as an example, the price reductions for the three negotiated medicines—tenofovir disoproxil fumarate, icotinib, and gefitinib—were 67%, 54%, and 55%, respectively.

However, given the substantial market base following inclusion in national medical insurance reimbursement, new specialty drugs and exclusive products will have significant room for volume expansion.

Trading price for volume requires relevant companies to carefully balance pricing against long-term market size. Certain exclusive products, facing limited short-term competition and benefiting from protection periods, demonstrate a stronger willingness to be included in the National Reimbursement Drug List (NRDL) and possess greater room for negotiation concessions.

Overall, the continuous advancement of healthcare reforms in recent years, the stimulation of new drug R&D by the Marketing Authorization Holder (MAH) system, the prioritized review and approval for clinically essential innovative drugs during the drug evaluation process, along with the national treatment accorded to imported new drugs, have significantly altered the competitive landscape and protective mechanisms for new drugs in the Chinese market compared to previous years. These changes will also influence companies’ attitudes during national medical insurance reimbursement negotiations.

Specifically, among Chinese companies, nine A-share listed firms and one company listed on the National Equities Exchange and Quotations (NEEQ) are involved. These include Tibet Rhodiola Pharmaceutical Holding Co., Ltd. (Xinhuosu), Chengdu Kanghong Pharmaceutical Group Co., Ltd. (Conbercept Ophthalmic Injection), Jiangsu Hengrui Medicine Co., Ltd. (Apatinib), Jiangsu Kanion Pharmaceutical Co., Ltd. (Ginkgo Terpene Lactone Injection), Tasly Pharmaceutical Group Co., Ltd. (Recombinant Human Pro-Urokinase and Yiqi Fumai Lyophilized Powder for Injection), Shenzhen Salubris Pharmaceuticals Co., Ltd. (Allisartan), Chase Sun Pharmaceutical Co., Ltd. (Xuebijing), Yifan Biopharma Co., Ltd. (Compound Huangdai Tablets), and China Yatai Group Co., Ltd. (Shenyi Capsules).

Attachment:

Scope of Drug Reimbursement Negotiations for the 2017 National Basic Medical Insurance, Work-Related Injury Insurance, and Maternity Insurance Drug Catalog