The Insurance Association of China (IAC) is fast-tracking the proposal for a standardized Commercial Insurance Drug Catalog, which marks a major change in routes of funding for innovative medicines. The IAC, which is an important organization in the self-regulation of the industry, has set this agenda based on past studies. Now, major insurers, including Ping An Health, PICC Health, and Taikang Life, have come into alignment on a common commercial formulary. A preliminary commercial insurance catalog is expected in the first half of this year, with unified policy terms aimed to be completed by the end of 2025.
China’s commercial health insurance sector, which includes critical illness (disease) insurance and medical reimbursement plans, is changing fast. Commercial insurers have historically faced a great deal of challenges due to fragmented drug coverage, which made claims disputable and inefficient. The new catalog will aspire to harmonize drug lists, establish a tiered coverage structure, and give insurers a greater negotiating ability when it comes to pharmaceuticals. The newly amended insurance formulary for commercial insurance is expected to have multi-tier coverage, filling the voids left by China’s public medical insurance.
In addition to the planned commercial insurance program, China is also implementing a Class C list for reimbursed drug products. Currently, there are two categories of drugs on the National Reimbursement Drug List (NRDL). Class A drugs are fully reimbursed, while class B drugs are partially reimbursed because they generally cost more. The proposed Class C list will be an additional list to the NRDL and is designed to include expensive but highly innovative therapies, such as CAR-T treatments, advanced cancer drugs, and rare disease medications
Both the Category C Drug List and the Commercial Insurance Drug catalog want to increase access to innovative drugs but for distinctly different reasons. The Category C Drug List, which is driven by the National Healthcare Security Administration (NHSA), is expected to encapsulate clinically essential high-cost drugs that fall outside of China’s NRDL’s existing A and B lists. On the other hand, the Commercial Insurance Drug Catalog, which the IAC and leading insurers are pushing through, aims to build structured coverage across multiple insurance tiers, thus responding to broader market demand and affordability, apart from clinically essential medicines.
Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.