On the evening of February 19, a document titled "Opinions on Improving the Drug Price Formation Mechanism (Draft for Comments)" was circulated in the industry.

The draft contains many practical details, such as the pricing of innovative drugs, the document proposes the method of "price stratification + initial price + price protection", and the first new drugs enjoy higher pricing power and longer term price protection. We will study the establishment of a commercial health insurance drug catalogue (Category C catalogue), which will be jointly formulated by the medical insurance department and commercial insurance companies, and determine reasonable prices through negotiation and dynamic adjustment. Allow employees' medical insurance personal accounts to purchase insurance products that cover high-level innovative drugs, allow public institutions to use financial funds to purchase commercial insurance, etc., and implement policies such as multiple payments for innovative drugs mentioned in the past.

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The Overall Objective

By 2027, it is necessary to improve the drug price formation mechanism that is "market-oriented, clinical value-oriented and based on effective competition", aiming to create a fairer and more dynamic market environment.

innovate the drug pricing mechanism

1. Price stratification and initial price protection of innovative drug pricing

The mechanism of "price stratification + initial price + price protection" will be adopted. The first new drug and the follow-through innovative drug will be differentiated in pricing and price stability, and the first new drug will enjoy higher pricing power and longer term price protection.

A self-evaluation system based on pharmaceutical and clinical value will be piloted for newly launched drugs to support innovative drugs to obtain returns consistent with high investment and high risk at the initial stage of listing, and to keep prices relatively stable within a certain period of time.

2. Innovative drug industry Investment Fund

The draft proposes to set up an investment fund for the innovative drug industry, allowing commercial insurance companies to take the lead in setting up or clarifying the existing investment funds for key investments in the innovative drug industry.

For commercial insurance companies whose investment scale in the equity category of innovative drugs reaches 5% of the total assets at the end of the previous quarter, they will be regarded as innovation-supported commercial insurance companies, and can obtain support policies such as tax incentives, serious illness insurance undertaking rights, and urban customized commercial health insurance cooperation.

Key breakthroughs at the payment end

1. Optimization of medical insurance negotiation

The medical insurance negotiation will consider the fairness of the initial price, patient benefits and other factors, and negotiate with enterprises on an equal footing to form a payment standard that reasonably reflects the clinical value of drugs.

2. Class C directory linkage

With regard to the category C list, the establishment of a commercial health insurance drug list (Category C list) will be studied, which will be jointly formulated by the medical insurance department and commercial insurance companies, and the reasonable price will be determined through negotiation and dynamically adjusted. Establish a coordination mechanism between the Category C list and the medical insurance list, and support the inclusion of drugs in the Category C list in the medical insurance list at an appropriate agreed price.

3. Diversified payment system

Allow employee medical insurance individual accounts to purchase insurance products that cover high-level innovative drugs. Enterprises are encouraged to purchase commercial health insurance for their employees, and public institutions that meet the requirements can use financial funds to purchase supplementary medical insurance. Explore innovative payment models such as payment for curative effect and installment payment.

Industry impact and evaluation

1. Encourage source innovation

Through price stratification and stable period protection, the problem of "high level of duplication" in the current field of innovative drugs is solved, and enterprises are encouraged to engage in the research and development of new targets and new mechanisms.

2. Enhance confidence in internal circulation

In the past, innovative drug companies faced the dilemma of "not going to sea or out", and this policy adjustment released the signal of "relying on the Chinese market can also live well", showing the determination of the country to leverage the internal circulation and support the development of the domestic innovative drug market.

3. Upgrade the role of commercial insurance

Commercial insurance companies have transformed from simple payers to industrial investors, deeply participating in the full life cycle of innovative drugs (investment + payment), and promoting the combination of market and clinical needs.

Potential disputes

1. Financial fund purchase risk

The use of financial funds by public institutions to purchase commercial insurance may lead to the fairness discussion of "marketization of public medical care".

2. Price protection period risk

If enterprises abuse the price protection period to maintain high prices, it may increase the burden of patients, and a supporting regulatory mechanism is needed.

The policy is pending official release. This is regarded by the industry as a major positive for innovative pharmaceutical companies, especially the incentive for source innovation is equivalent to "nuclear bomb level", which is expected to change the excessive dependence of innovative pharmaceutical companies on overseas markets.

Overall, through a series of policy innovations, the draft aims to optimize the drug price formation mechanism, support the development of innovative drugs, and solve the problem of innovative drug payment through diversified payment schemes, providing a new direction for the healthy development of the domestic pharmaceutical market.