New Low-Cost Supplemental Insurance Plans In China Offer Access To Innovative Pharmaceuticals

Multinational pharmaceutical firms are taking advantage of fledgling low-cost commercial insurance initiatives in China to more readily access the country’s vast and rapidly growing market for their products—and to price them more competitively.

Under strict eligibility rules on pharmaceuticals and medical devices covered by China’s primary national health insurance plans, pharmaceutical firms must submit to price negotiations that cut their profits and make treatments much more affordable to Chinese consumers. Also, volume-based procurement is reducing drug prices too.  

But new supplemental medical insurance plans, offered by commercial insurance agents in concert with the Chinese government, cover newly-approved innovative drugs that are not yet covered by primary insurance plans. Known as Urban Customized Supplementary Medical Insurance, or huiminbao, the insurance is offered to Chinese consumers at relatively low cost over and above their basic insurance. But huiminbao is not subject to the same strict controls limiting treatment options as the basic plans.

Huiminbo is still in its infancy. Fewer than 130 million people in a country of more than 1.4 billion have the coverage. But the new insurance plans are already offering premium pharmaceuticals to fight cancer and other ailments that are not available under the government’s regular plans. And the plans are looking to expand.