The emergence of commercial health insurance as a route to the Chinese market


Commercial health insurance can provide more market access opportunities in China.

China has always been a difficult market for foreign healthcare manufacturers to achieve successful market access and pricing (MA&P) results for their medicines. The recent elimination of provincial Reimbursable Drug Lists (PRDLs) has made the National Reimbursed Drug List (NRDL) the only route to public funding in China. Yet, while NRDL inclusion remains the only route to national public reimbursement, the path to NRDL inclusion has become more difficult. Drugs must pass a series of formal reviews before NRDL negotiations, and if manufacturers are successful in passing these steps, they are then expected to offer deep discounts off their pre-NRDL price during negotiations. [see figure 1]. In addition, domestic products have increased in number and are undercutting the prices of multinational players.

In this context, alongside growing government support, commercial health insurance (CHI) has become a key pathway to provide access before obtaining national public reimbursement or even before regulatory approval.

In this article, we explore market access opportunities in China through private payers, and how CHI can deliver value before, during, and after NRDL inclusion. We are particularly focused on formulary-based health plans that require active engagement with stakeholders (i.e. private payers and third party administrators (TPAs)) to gain access, including million-dollar health and specialty drug plans. Other types of CHI plans are not included in the scope of this article.1

Definition and Types of Form-Based CHI

CHI plans have been working in China for decades1 to increase access to healthcare and innovative medicines, improving overall affordability, while simultaneously decreasing the pressure on government to ensure access. CHI plans can be defined as voluntary insurance offered by private payers that provides health care coverage in addition to statutory basic medical insurance (BMI). To date, several types of form-based CHI exist [see figure 2] which can be leveraged by manufacturers looking to launch a drug in China:

  • city-based CHI | The city-based CHI, or “Hui Min Bao”, has seen strong growth in recent years. City-based CHI are local low-premium plans that provide additional coverage for basic medical insurance (BMI). (OOP) expenses and specialty drugs
  • million dollar CHI | Million Dollar Medicare is a type of national plan that has similar positioning to the city, but offers broader and better coverage at a higher premium
  • Specialty Drug Plans | Specialty drug plans are another type of national plan that provides coverage for a designated list of low-premium specialty drugs.

CHI plans also take different forms. City-based CHIs are typically public-private partnerships (PPPs) between insurance companies, TPAs, local governments, and/or local branches of the National Healthcare Security Administration (NHSA); while others are operated solely by private payers.

Recent city-based CHIs have continued to build on the PPP model, leveraging close collaborations between major commercial insurance companies, local government agencies, and TPAs ​​that act as intermediaries between private payers and manufacturers by actively participating in design and management. drug formularies. In this, the collaboration with TPA can help guarantee the inclusion of a drug in several health insurance plans.

Benefits of Form-Based CHI

The benefits of formulary-based CHI can be realized before, during, and after the inclusion of the NRDL.

Prior to the NDRL, and given affordability constraints in China, formulary-based health insurance offered a way to improve access to medicines for patients who otherwise could not pay out of pocket. . Considering that the median annual disposable income is around $4,300 per capita, most specialty drugs, if self-paid, are out of reach for the masses.3 Although health insurance penetration remains low, it represents a large population: in 2021, city-based health insurance plans covered 140 million citizens, while city-based health insurance plans one million dollars covered 100 million citizens.4.5

During the NRDL registration process, formulary-based CHI plans can facilitate NRDL inclusion by allowing manufacturers to engage with physicians and patients, as well as collect RWD to support the registration application. NRDL. Indeed, while pricing is a key element of NRDL negotiations, less than 50% of the medicines that have applied go through to the negotiations stage: before these, the medicines must be selected for negotiations, and the selection is based on clinical and economic evaluations.6 As such, securing the support of key opinion leaders and patient advocacy groups can help secure a place at the negotiating table. As for RWD, these can become instrumental in understanding local epidemiology, treatment regimens, and duration of clinical practice. This allows manufacturers to paint a more accurate picture of real-life effectiveness, expected adoption, and possibly expected budget impact that will be paramount for NRDL negotiations. Additionally, this presents an opportunity for manufacturers to gauge market reaction before committing to the NRDL listing at a significant price discount.

After NRDL listing, health insurance plans may offer additional relief on heavy OOP expenses that remain after public reimbursement. For example, it is estimated that statutory health insurance accounts for only about 35-45% of overall payments for specialty oncology drugs,seven leaving patients to cover most of the outstanding costs. CHI can play an important role in ensuring wide access after inclusion of NRDL.


As formulary-based CHIs become an integral part of the Chinese market access landscape and open a new window for planning innovative therapy launches in China, their proliferation and expansion may also add complexity for drug manufacturers. Indeed, several diets exist so that no diet is suitable for all. In this context, it is essential that pharmaceutical manufacturers assess their ability to use CHI, either as an interim solution before proceeding with an NRDL listing strategy, or as a long-term approach in the absence of an NRDL listing.

About the authors

Anaïs Frappé is a director at Windrose Consulting Group in London. She has over a decade of experience in healthcare consulting in the areas of pricing and access, trading, private equity and organizing. strategy. Amy Morgan is Head of International Markets at Windrose. She has over 20 years of experience in strategy consulting and P&MA in emerging and non-traditional markets. The article also leveraged the support and insight of Crystal Leung (Senior Analyst at Windrose Consulting Group).


  1. Single-condition plans cover multiple medications indicated for a specific illness and associated medical expenses such as hospital stays, while mid/high-end plans provide unlimited coverage for reasonably prescribed medications, as well as coverage for inpatients and outpatients in addition to BMI
  2. CHI, as part of the general insurance industry, was officially recognized by the Chinese government with related regulations and policy in 1998


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