China launches new drug reimbursement list, 148 drugs added

On 20 August 2019, China's National Healthcare Security Administration (NHSA) and Ministry of Human Resources and Social Security (MOHRSS) jointly issued the Circular on the National Drug Catalogue for Basic Medical Insurance, Work-related Injury Insurance and Maternity Insurance, which removed 150 drugs from and added 148 drugs to circulation in China.

This Catalogue, which comes into effect on 1 January 2020 and replaces the previous version issued in 2017, contains the following sections:

• General Notices: providing clarifications on the content of the Catalogue, classification of drugs, interpretation rules and guidelines on how the drugs can be reimbursed.
• Western Medicine: including 1279 chemical and biological products.
• Chinese Patent Medicine: covering 1316 Chinese patent drugs and ethnic medicines.
• Negotiated Drugs within contracted Period: including 48 drugs currently within the validity period of the negotiation agreement reached between drug manufacturers and Chinese authorities. Also, 128 additional drugs, highly priced and exclusive with great clinical value, are to be negotiated and added to the Catalogue.
• Traditional Chinese Medicines – Part Processed: listing 892 Traditional Chinese Medicines – Part Processed that can be reimbursed and other products to be excluded from reimbursement.

Compared to the previous 2017 version, the Catalogue removes 150 drugs and adds 148 new drugs. The National Medical Products Administration (NMPA) revoked half of the removed drugs. The remaining removed drugs were deemed to have low clinical value, to have been abused in medical practice, or were replaced with better candidates.

The circular accompanying the Catalogue also highlighted policies for the industry that were in need of attention, such as:

• Unified reimbursing standard for both original drugs and generics: where a uniform reimbursement standard based on the generic drug price level will be created for the original drug and the generic drug (in those cases where the negotiation agreement period for the original drug has expired, but a generic is available or where the original drug is newly added into the Catalogue, but the generic drug has passed the quality consistency evaluation.)
• Provincial catalogues: given that previously a provincial medical insurance authority could add drugs to the national catalogue and establish a provincial catalogue, the current policy prohibits provincially designed catalogues. All provinces must strictly implement the Catalogue. Provinces cannot make their own catalogues, use alternative methods to increase the number of drugs or adjust the reimbursement scope for drugs in the Catalogue.
• Centralised procurement: given that all provincial medical insurance authorities should promptly incorporate drugs into the scope of the local centralised procurement system.
• National drug database: the Chinese authority will create a national unified drug database that will cover the usage of drug products in all medical institutions and retail pharmacies across China.

The Catalogue and the policies mentioned above could significantly influence drug prices, and the operation of the prescription and reimbursement regimes in the country. Pharmaceutical companies distributing products in China should check to ensure that their drug products are included in the Catalogue and should adjust their marketing strategy accordingly.

For more information on this eAlert and the Chinese pharmaceutical industry, contact your usual CMS source or one of the following local CMS experts: Nick Beckett and Daisy He.