New Chinese Drugs to be Covered by National Insurance Plans, Nudging out Foreign Competitors

Twenty-nine new drugs produced by Chinese pharmaceutical companies were added to the new National Drug Reimbursement List (NRDL) in January, squeezing out foreign competitors, whose offerings were deemed by review panels to be exorbitantly priced.

The success of such a relatively large number of Chinese pharmaceuticals in making the list, almost equaling the 37 new drugs produced by foreign firms added to the compendium, marks a significant turn in the race by domestic pharmaceutical companies to gain traction in the Chinese drug market. Updated every year, the list,  which determines what pharmaceuticals are eligible for reimbursement under the country’s national health insurance plans, puts a premium on affordability. If similar drug products produced by a range of competitors are all deemed safe and effective, the review panel of NRDL regulators is likely to choose the pharmaceutical that is the least expensive to produce and is offered for sale at a reasonable price.

Altogether, the National Healthcare Security Administration added 119 medicines to the NRDL last month. To be included in the list, drug makers agreed to cut prices on the medicines by around 50 percent. Drugs added to the list generally see a major boost in sales, because patients in China seek out medicines that they receive reimbursement for buying.