Exclusive: Beijing Drafts Rules to Link Private Insurance With Pricey Innovative Medicines
By Zhou Xinda
China’s financial regulator is preparing to release policies aimed at integrating expensive innovative drugs into commercial insurance plans, a move designed to divert costs away from the country’s strained state-run health fund.
The National Financial Regulatory Administration plans to issue guidelines in January 2026 to facilitate the adoption of a recently unveiled commercial insurance innovative drug catalog, Caixin has learned. The policies will focus on adjusting the coverage lists of mass-market medical insurance plans, particularly for drugs where insurers currently lack sufficient data on disease incidence and treatment progression. The draft rules are currently circulating for limited feedback.
The initiative comes nearly a month after the release of the specialized drug catalog, which aims to broaden commercialization channels for pharmaceutical companies while relieving payment pressure on basic medical insurance. Unlike China’s intense annual negotiations for the state medical insurance list, which demand steep price cuts, the commercial catalog offers insurers discounts ranging from 15% to 50%.
Under the new mechanism, a drug listed at 1 million yuan ($138,500), for example, might be offered to commercial insurers at a 30% discount, or 700,000 yuan ($96,950). The savings are intended to be shared among patients, insurers and pharmaceutical firms. A figure within the medical insurance system said the discount should not merely pad insurer profits but be used to lower premiums or expand coverage.
Provincial authorities have already begun registering the drugs for online procurement. Cities including Shenzhen and Ningbo, as well as Huangshi and Yichang in Hubei province, have integrated the drugs into their 2026 “Huiminbao” plans—budget supplemental medical insurance backed by local governments.
However, expanding coverage to strictly commercial health insurance products depends on the willingness of insurers, many of whom remain skeptical. One executive in charge of health insurance at a life insurer expressed concern that without the strict payment controls applied by state medical insurance, drug usage rates could surge. The executive noted that a 10% to 20% cost saving might not offset the risk of increased claims.
Some insurers believe the market should dictate coverage rather than a centralized list. “We have some mass-market plans with broader coverage responsibilities,” said a representative from a large property and casualty insurer. “Which drugs to reimburse can be left to natural market selection.”
The complexity of implementation was highlighted by a recent reversal at Fosun United Health Insurance. On Dec. 16, the company announced that nine of its medical insurance products would cover the new commercial drug catalog starting Jan. 1, 2026. Two days later, the announcement was deleted. Industry observers suggested the retraction may have been due to potential disputes over coverage details or a decision to await unified regulatory guidance.
Even when listed, coverage is subject to contract terms. For instance, Fosun’s policy excludes congenital diseases, meaning a patient prescribed a drug for such a condition would not be reimbursed even if the drug appears in the innovative catalog.
The NFRA’s move to facilitate the catalog marks a shift in tone. The regulator had previously been cautious, leading to a bureaucratic tug-of-war with the National Healthcare Security Administration, which oversees the state medical fund. While the healthcare administration pushed for the catalog to offload costs, the financial regulator focused on the solvency and risk management of insurance companies.
Caixin has learned that the NFRA has long planned to issue model clauses for the industry to standardize commercial health insurance products, aimed at curbing excessive competition and product fragmentation. The upcoming guidelines are expected to define coverage standards for drugs and medical devices, providing a clearer framework for insurers navigating the new landscape.
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.
Image: Viktor – stock.adobe.com