China Opens New Insurance Path for High-Cost Drugs

By Zhou Xinda

China has created a new pathway for some of the world’s most expensive and innovative medicines to gain insurance coverage, a move that could reshape the market for global pharmaceutical companies but faces significant hurdles to implementation.

On Dec. 7, regulators announced that 19 drugs from 18 companies were added to the first-ever Commercial Health Insurance Innovative Drug List. The decision, part of the country’s 2025 national drug-pricing negotiations, is designed to cover cutting-edge treatments that are too expensive for the country’s state-run basic medical insurance program.

The new list has ignited hopes among drugmakers, particularly those with high-value therapies that have struggled to gain market access in China. However, since the drugs won’t be paid for by the national health insurance fund, their coverage depends on a still-developing commercial insurance market, where providers are wary of rising payout rates. This creates uncertainty about how much the new policy will relieve the payment challenges facing pharmaceutical firms.

The annual revision of China’s National Reimbursement Drug List involves several stages, including application, expert review, and price negotiation. This year, a record 534 drugs applied for the basic list and 121 for the new commercial list, with 79 applying for both. About 24 medicines ultimately entered price negotiations for the commercial list, concentrated in advanced cancer treatments such as CAR-T therapies and antibody-drug conjugates, as well as immunology and rare-disease drugs. Nineteen were successfully included, an approval rate of nearly 80%.

After a four-year pursuit, CAR-T therapies — a revolutionary type of cancer treatment — have finally made it onto a national list. All five eligible domestically approved CAR-T products were included.

Among them are Heyuan Biologics’ natciloleucel injection, CARsgen Therapeutics’ zevor-cel, and CBMG’s zevorcabtagene autoleucel. These three will first attempt to negotiate for inclusion in the basic insurance list; if unsuccessful, they will proceed with price talks for the commercial list. Fosun Kite’s axicabtagene ciloleucel and JW Therapeutics’ relmacabtagene autoleucel, which have previously been shut out from the state plan, applied only for the commercial list.

Oncology drugs dominate the new commercial list, including Pfizer’s Elrexfio, BeiGene’s zanidatamab, and Johnson & Johnson’s Tecvayli. Two new drugs for Alzheimer’s disease—Eli Lilly’s donanemab and Eisai’s lecanemab—were also included.

For rare diseases, six drugs made the list, including Bristol Myers Squibb’s Yervoy for treating malignant pleural mesothelioma and Takeda’s Gattex for short bowel syndrome.

For the first time in recent years, China’s National Healthcare Security Administration didn’t announce the average price reduction for the talks. In the past five years, average cuts for the basic insurance list were around 60%. Because commercial insurance plans lack the massive purchasing power of the state, industry insiders had predicted price cuts for the new list would be in the 20% to 30% range. Executives at the negotiation site said the reductions for the commercial list were roughly between 10% and 50%.

Implementation is key

The new list is seen as a critical step in coordinating state and commercial insurance, but its rollout faces challenges. The plan is to first apply the list to city-level supplementary health plans, known as “Hui Min Bao,” before expanding to other commercial products.

Some regions are already moving. A 2026 Hui Min Bao plan in the city of Shantou will increase its reimbursement ratio for drugs on the new list by 10 percentage points. In November, Anhui province proposed measures to raise reimbursement rates for these innovative drugs.

However, an insurance executive told Caixin that most 2025 Hui Min Bao plans have already begun collecting premiums, making immediate changes unrealistic. “It’s highly likely we’ll have to wait another year,” the person said.

Group health insurance plans are also under consideration. Shanghai this year allowed individuals to use funds from their personal medical insurance accounts to purchase group plans that cover innovative drugs outside the state formulary.

Further down the line, the commercial list may serve as a transitional step. An industry analyst suggested that after three to five years of collecting real-world clinical data, drugs on the commercial list could eventually be considered for the main state insurance plan.

Even after navigating price negotiations, drugmakers face the “last mile” problem of getting their products into hospitals. The national insurance authority stated that it will not reimburse for drugs on the commercial list and that they won’t be counted against certain hospital performance metrics, potentially easing their entry into medical facilities.

Still, cooperation between state and commercial insurance bodies requires clearer roles and consensus. One insurance executive noted that during the negotiations, the commercial insurance experts facing the drug companies were mostly from regional branches, not corporate headquarters. “The fact that the ‘national team’ wasn’t at the table suggests that the financial-regulatory and national-insurance departments haven’t reached an agreement on this negotiation,” the executive said.

CAR-T’s breakthrough

CAR-T therapies work by genetically engineering a patient’s own immune cells to recognize and attack cancer. For many patients with blood cancers, they can offer a clinical cure, with survival times exceeding five years.

But the therapies are highly personalized and expensive. JW Therapeutics’ relmacabtagene autoleucel is priced as high as 1.29 million yuan ($178,000) per infusion, while Heyuan Biologics’ natciloleucel is priced at 999,000 yuan ($138,000).

Companies defend the prices by pointing to the complex, bespoke manufacturing process. Chen Qiyu, executive director and co-CEO of Fosun International, previously told Caixin that training a single technician on the production line can cost 300,000 yuan ($41,400). Industry estimates place the manufacturing cost per patient at 600,000 to 700,000 yuan ($83,000 to $97,000).

With China’s state insurance having an unofficial price ceiling for negotiations — often described as “no talk above 500,000 yuan, no entry above 300,000 yuan” — these therapies were consistently excluded. Companies instead turned to commercial insurance and pay-for-performance models.

Inclusion in the new commercial list provides a significant boost. “If you’re on the list, it’s like getting a label of endorsement from the National Healthcare Security Administration, which gives you an advantage in next year’s Hui Min Bao and group insurance access,” a multinational pharma executive said.

Patient affordability remains the biggest challenge. In the best-case scenario, a 50% price cut combined with a typical Hui Min Bao reimbursement cap of 500,000 yuan ($69,000) could potentially eliminate out-of-pocket costs for a patient.

caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.

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