China’s new drug insurance: lifeline for patients or squeeze on big pharmaceutical firms?

Mainland China’s 17 million Alzheimer’s patients can, for the first time, pay less out of pocket for a costly drug touted as “historic” and “the beginning of the end” for the memory-robbing disease after Beijing launched a commercial insurance innovative drug list in an effort to make medicines more accessible and affordable.

The commercial insurance formulary covered some medicines that were not yet eligible for reimbursement under the country’s National Reimbursement Drug List (NRDL), state-run news agency Xinhua said on December 8.

Progress, however, comes at a price. Macquarie Capital, citing an industry expert, estimated that list prices for included drugs were being trimmed by about 15 to 50 per cent. The final out-of-pocket share for each drug would likely hinge on case-by-case pricing talks between drug developers and Chinese insurance companies.

For years, some innovative drugs have struggled to enter China’s vast market as makers have been unwilling or unable to slash their prices deep enough to meet NRDL requirements. Average NRDL discounts agreed between the government and drug makers in November are expected to exceed 60 per cent, following cuts of about 63 per cent in last year’s round.