Eli Lilly (LLY.US), Johnson & Johnson (JNJ.US), and Pfizer (PFE.US) Expand in China: Innovative Therapies Included in First-Ever Commercial Insurance Drug List

Intelligent Finance APP learned that Eli Lilly (LLY.US), Pfizer (PFE.US), and Johnson & Johnson (JNJ.US) have secured a place in China's first innovative drug catalog, opening new market channels and enhancing the sales prospects of expensive cutting-edge therapies. At the 2025 High-Quality Development Conference for Innovative Drugs held in Baiyun District, Guangzhou, a total of 19 innovative drugs were included in the medical insurance reimbursement list. These drugs are too expensive to fall within the scope of national medical insurance but are recommended for inclusion in commercial medical insurance. The drugs cover a variety of diseases, including cancer, Alzheimer's disease, and rare genetic disorders.

As China's population ages, the growing demand for treatments for diseases such as cancer, diabetes, and dementia could be alleviated by incorporating these drugs into the national health insurance system. A gradual shift to a commercial health insurance reimbursement model is also expected to allow both domestic and international pharmaceutical companies to sell their products at higher prices, thereby increasing profit margins. For a long time, the profit margins of pharmaceutical companies have been suppressed due to significant price cuts required by the national health insurance system.

To qualify, pharmaceutical manufacturers negotiated discounted prices with government officials, which will be offered to all private insurers. The list aims to expand the role of private insurance, which currently holds a small share in China's innovative drug market.

The analysis pointed out that this list "is a good start for international pharmaceutical companies that cannot provide the substantial discounts required by the national health insurance drug list but want to improve the accessibility of medicines for Chinese patients. Confidential price negotiations also help Chinese companies maintain their international pricing."

In addition to Eli Lilly's Kisunla and Eisai's Leqembi (both used for treating Alzheimer’s disease), the list also includes anti-cancer drugs from Pfizer, Johnson & Johnson, and Bristol-Myers Squibb. Many China-based pharmaceutical companies are also featured on the list, including five that produce CAR-T cell therapies for cancer treatment. BeOne Medicines (ONC.US) is the only company with two drugs on the list.

The government did not immediately disclose the average discount rate. Previous media reports indicated that the discount rate ranged between 15% and 50% — lower than the typical 60% discount required for inclusion in the National Reimbursement Drug List (NRDL).

According to Wilfred Yuen, an analyst at Daiwa Capital Markets, the success rate of the final selected drugs – chosen from 24 drugs that entered the final negotiations – is not high, indicating that regulators are taking a cautious approach in the first year of implementation. The analyst stated, "The final impact will vary by product and company, as the products on the list target different populations (children versus the elderly) and diseases (adult cancers versus rare diseases)."

China's national insurance system covers 95% of its 1.4 billion population and has long held strong bargaining power, leveraging the NRDL to secure significant discounts. Since the introduction of the NRDL negotiation mechanism in 2016, its influence has steadily grown – although currently, only three companies have agreed to lower prices. Multinational companies like AstraZeneca (AZN.US) and Novartis (NVS.US) actively adopt NRDL strategies, while others avoid them, focusing instead on out-of-pocket or privately insured customers – a segment with limited market share.

The new catalog aims to expand the role of commercial insurance in funding innovative drugs, but its impact on pharmaceutical manufacturers' revenue and profitability remains to be seen.

Capital Securities analyst Wang Ruizhe said: "The sales growth of commercial insurance may not be as fast as national insurance, and commercial insurance companies may still need to communicate with hospitals. Which hospitals will use commercial insurance, how to apply for reimbursement, and to what extent insurance companies will adopt this directory – all these are still unclear at present."

Of the 121 drugs initially included in the drug directory, there are products from both foreign pharmaceutical companies and Chinese domestic manufacturers. However, after screening, a final list was determined. Although this year's final list may be too small to significantly impact the market structure, the analyst team at Macquarie Securities (led by Tony Ren) predicts that the number of drugs listed in the directory will increase to 300 by 2027.