China Opens New Insurance Path for High-Cost Drugs

China recently introduced a new pathway to provide insurance coverage for expensive and innovative medicines, potentially transforming the market for global pharmaceutical firms. However, the initiative faces major implementation challenges [para. 1]. On December 7, Chinese regulators added 19 drugs from 18 companies to the newly created Commercial Health Insurance Innovative Drug List as part of the 2025 national drug-pricing negotiations. These drugs are primarily treatments considered too costly to be included in the basic state-run medical insurance program [para. 2]. This new development has fostered optimism among drugmakers, especially those with high-value therapies that have struggled for market entry in China. Yet, since these drugs will rely on a still-maturing commercial insurance sector, and not on the national health insurance fund, uncertainty remains over whether this move will significantly alleviate payment obstacles for pharmaceutical companies [para. 3].

The selection process for the lists involves several phases, such as applications, expert reviews, and price negotiations. This year, a record 534 drugs applied for the basic list, while 121 applied for the new commercial list; 79 applied to both. For the commercial list, 24 medicines—mainly in oncology, immunology, and rare diseases—entered price negotiations, and 19 were successfully included, marking an approval rate of around 80% [para. 4]. Notably, CAR-T cell therapies—a cutting-edge form of cancer treatment—were added to a national list for the first time, with all five approved domestic products included [para. 5]. Specific products like Heyuan Biologics’ natciloleucel injection and CBMG’s zevorcabtagene autoleucel will first attempt negotiation for the basic insurance list, then the commercial if unsuccessful. Fosun Kite’s axicabtagene ciloleucel and JW Therapeutics’ relmacabtagene autoleucel only applied for the commercial list [para. 6]. The list also features prominent oncology drugs (Pfizer’s Elrexfio, BeiGene’s zanidatamab, J&J’s Tecvayli), new Alzheimer’s drugs from Eli Lilly and Eisai, and six rare disease therapies, such as Bristol Myers Squibb’s Yervoy and Takeda’s Gattex [para. 7][para. 8].

Unlike previous years, China's National Healthcare Security Administration did not disclose the average price cut from negotiations. Historically, basic insurance list drugs have seen average price reductions of roughly 60%. Because commercial insurance lacks the basic plan’s purchasing power, cuts for the new list were predicted at 20–30%, but industry executives indicated reductions ranged from 10–50% [para. 9].

Implementation is now a prime concern. The drug list will first be used for city-level supplemental health plans (“Hui Min Bao”), with plans to expand into broader commercial products. Some regions, like Shantou and Anhui, are already modifying reimbursement rates for these innovative drugs, but many 2025 plans have started premium collections, so most changes may be postponed for a year [para. 10][para. 11][para. 12]. Group insurance measures in places like Shanghai allow individuals to use personal medical insurance accounts for group plans covering drugs on the commercial list [para. 13]. Over time, real-world clinical data may support moving drugs from the commercial list to the basic state plan [para. 14].

Ensuring access also involves overcoming barriers to hospital adoption, though commercial list drugs will not count against certain hospital metrics, potentially improving availability [para. 15]. Overall, coordination between state and commercial insurers remains insufficient, partly evidenced by a lack of central “national team” involvement in negotiations, hinting at unresolved regulatory issues [para. 16].

CAR-T therapies represent a major breakthrough, with their high prices reflecting individualized manufacturing and complex production. Some products cost 999,000–1,290,000 yuan ($138,000–$178,000) per treatment, and manufacturing per patient can run 600,000–700,000 yuan ($83,000–$97,000) [para. 17][para. 18][para. 19]. State insurance's stringent price caps had previously barred these therapies, necessitating a shift to commercial insurance or performance-based payments [para. 20]. Inclusion on the new list is expected to boost access and credibility for companies in future insurance negotiations, though patient affordability continues to be a significant challenge despite possible 50% price reductions and capped reimbursement [para. 21][para. 22][para. 23].