“Science and Technology Innovation Board Daily”, Feb. 6 (Reporter Xu Hong) On the eve of the Lunar New Year, the pharmaceutical industry once again ushered in a major favorable policy.

According to reports, the National Health Insurance Administration's “Notice on Establishing a Initial Price Formation Mechanism for Newly Launched Chemical Drugs to Encourage High Quality Innovation” (hereinafter referred to as the “Draft for Comments”) solicited comments through relevant industry associations. At the same time, in an interview with the media, the relevant person in charge of the Price Procurement Department of the National Health Insurance Administration also gave a detailed explanation of the considerations behind formulating the “Draft for Solicitation of Comments.”

According to the “Draft for Solicitation of Comments”, the National Health Insurance Administration comprehensively summarized the experience of operating the initial price formation mechanism for COVID-19 treatment drugs, and after thorough research, multiple arguments, and extensive listening to opinions, the National Health Insurance Administration explored and implemented a first-run price formation mechanism for newly launched chemicals based on independent quantitative evaluation.

Among them, protective measures such as “the higher the self-evaluation score, the higher the value content of drug innovation, the higher the degree of freedom in the initial price of newly launched drugs”, “the number of self-ratings is high and high, giving the initial price a stable period of 1-5 years, not included in collection during the stabilization period, and in principle not interfering with the online price” are regarded by the industry as support for “true innovation.”

Affected by this, the Hong Kong Stock Pharmaceuticals and Biotechnology Index continued to rise intraday on the 6th, closing up nearly 5% on the same day. Meanwhile, the A-share pharmaceutical sector also continued to rise. Pharma Ming and Kangde surged 7% in the intraday period, Hengrui Pharmaceutical rose more than 9%, and the science and technology innovation boards Rongchang Biotech and Maiwei Biotech rose and stopped 20CM.

▌“ One province connected to the Internet and the whole country was accessible”

The new drug initial price regulations were first introduced during the pandemic to promote the marketing and sale of COVID-19 treatment drugs as soon as possible.

At the beginning of January 2023, the National Health Security Administration issued the “Guidelines on Price Formation of COVID-19 Therapeutics (Trial)” (hereinafter referred to as the “Guidelines”). The “Guidelines” include a total of 13 requirements. The specific measures can be summarized into 6 aspects, including:

Change the original model of separate acceptance by each province and repeated submission of data by enterprises. Initial quotations for COVID-19 treatment drugs are accepted centrally and distributed nationwide; it is clear that the reporting enterprise should make special explanations on the raw material costs, R&D expenses, period expenses, innovation and economy of the initial quotation, with the aim of opening up price components and encouraging enterprises to set prices based on factors such as production and operation costs and market supply and demand conditions.

Since then, including Junshi Biotech, Xiansheng Pharmaceutical, and MSD, etc., the COVID-19 treatments developed by these domestic and foreign pharmaceutical companies have all gone online through the new initial pricing regulations after being approved for marketing.

“Once a new drug is on the market, there will be a process of connecting to the Internet. According to the previous requirement to connect to the Internet from province to province, the rules for connecting to the Internet are not the same in each province, so the intermediate experience will be quite long, because drugs can only be sold once each province is connected to the Internet.”

“However, during the pandemic, we implemented a special online procurement policy to ensure that COVID-19 medicines can be used as soon as possible. We first agreed on an initial price with the price collection department of the Health Insurance Administration, then the price collection department issued documents to each province, and then each province centrally connected to the Internet according to the determined price. This greatly shortened the time it took for drugs to be connected to the network and entered the terminal.” An industry insider who has participated in the marketing of COVID-19 treatment drugs told the “Science and Technology Innovation Board Daily” reporter.

Therefore, if newly launched chemicals are implemented once the initial price formation mechanism is implemented, in the eyes of enterprises, the most intuitive advantage is to improve the efficiency of connecting drugs to the Internet: “This province is connected to the Internet, implemented nationwide, and provincial enterprises are running everywhere; province by province is being sold.” Some business people said this.

Also, according to the relevant person in charge of the Price Procurement Department of the National Health Insurance Administration, the online service model with the initial price is a new channel in parallel with the previous online connection model. Enterprises can choose to connect to the Internet according to the initial price mechanism and enjoy the convenience of services such as centralized launch and green channels while assuming certain information disclosure obligations and receiving peer review and social supervision; they can also choose to still connect to the Internet according to the old mechanism and abandon the convenience of various related services.

▌“ Differential treatment of true and false innovation”

Another highlight of this “Draft for Solicitation of Comments” is that it is proposed that the initial price will test a classification and processing model based on quantitative evaluation, stratify newly marketed chemical drugs, and gradually provide policy support.

Specifically, the National Health Insurance Administration uniformly formulates the initial price classification and processing enterprise self-assessment scale (hereinafter referred to as the “self-assessment scale”) to guide enterprises in evaluating the innovative quality of newly launched drugs in terms of pharmaceutical material basis, clinical value, and strength of evidence-based evidence.

First-time price reporting companies self-evaluate the drug against the scale. The maximum number of points that can be obtained from the company's self-evaluation (pharmacy points+clinical value points+evidence-based evidence points) is 150 points (60+60+30), and the score is divided into three levels: high [90-150], medium [50-90], and low [0-50].

The higher the self-assessment score, the higher the value of drug innovation, which will receive stronger policy support, including:

1. For newly marketed drugs with high self-evaluation points, the specific composition of the initial price does not require data in principle;

2. For newly marketed drugs with high self-evaluation points, the applicant company can grasp the initial price economy on its own without specific data requirements;

3. For newly marketed drugs with high and medium self-evaluation points, companies can declare the initial price from the date of receipt of the “Notice of Acceptance” of the marketing license application officially issued by the Drug Evaluation Center of the State Drug Administration, but for newly marketed drugs with low self-evaluation points, the initial price must be approved for marketing by the State Drug Administration before it can be declared, etc.

In addition, newly marketed drugs with high and moderate self-evaluation points can obtain a stable initial price period of 1 to 5 years depending on the approval status (formal approval, conditional approval). During the stabilization period, it can not be included in collection for the time being, and in principle, it will not face price restrictions.

In response, a pharmaceutical company person who has been following the policy for a long time told the “Science and Technology Innovation Board Daily” reporter that this is a “differential treatment of true and fake innovation,” while it is a huge benefit for “real innovation.”

According to Debon Pharmaceutical Review, the “Draft for Solicitation of Comments” is another innovative initiative to enhance the high-quality development of innovative drugs. It evaluates the innovation and clinical value of drugs in multiple dimensions, supports high-quality innovation with clinical value. Policy resources such as price, networking, and procurement are skewed towards true innovation and high-level innovation, avoiding false innovation and low-level “innovation”, and crowding out the space for high-quality innovation.

However, for newly marketed drugs, especially high-quality innovative drugs with clinical value, it will become easier and faster for products to be marketed under the new initial price regulations.

However, at the same time, some industry insiders told the “Science and Technology Innovation Board Daily” reporter that in order to actually achieve rapid sales of innovative drugs after they are marketed, other aspects need to be cleared up, including admission to hospitals and medical insurance.

“Being connected to the Internet for pharmaceuticals is not equal to entering the hospital market, because access to the hospital market is actually one of the biggest problems currently plaguing innovative pharmaceutical companies.”

“Furthermore, when a drug is first released online, it is not equal to medical insurance admission, and if it is not included in the medical insurance catalogue, it will also greatly affect access to the hospital market.” The other party said.