According to the Star Daily on November 28 (Reporter Xu Hong, Zheng Bingxun, Special Correspondent Gao Qing), today (November 28), with the National Medical Insurance Administration holding a press conference to officially announce and interpret, the results of the latest round of national medical insurance directory adjustments have finally been revealed.

According to the National Medical Insurance Administration, in this year's adjustment, 91 types of drugs have been newly added to the national medical insurance drug directory. Among them, there are 26 oncology drugs (including 4 for rare tumors), 15 diabetes and other chronic disease drugs (including 2 for rare chronic diseases), 13 rare disease drugs, 7 anti-infection drugs, 11 traditional chinese medicine, 4 mental illness drugs, and 21 other fields of medicines. At the same time, 43 types of drugs that have been replaced clinically or have not been produced for a long time have been removed.

After this adjustment, the total number of drugs in the directory will increase to 3,159, including 1,765 western medicines, 1,394 traditional chinese medicine, and further improvement in the level of drug security in the fields of oncology, chronic diseases, rare diseases, and pediatric medications.

In this year's negotiation and bidding process, a total of 117 drugs participated, of which 89 were successful in negotiation and bidding, with an overall success rate of 76% and an average reduction of 63%, comparable to previous years.

With the combined factors of negotiation price reductions and medical insurance reimbursements, the National Medical Insurance Administration expects that next year these newly added drugs to the directory will reduce the burden on patients by over 50 billion yuan.

Directory adjustments are more scientific and standardized.

"The amount of information is a bit overwhelming!" Just after the press conference ended, an investor who watched the live broadcast expressed this to the reporter from the Star Daily.

From the signals released at today's press conference, this year's catalog adjustments place greater emphasis on actual clinical needs and patients' real medication use, highlighting strong support for true innovation. In practical terms, the adjustment procedures and related rules are becoming more standardized, while the review and measurement work is increasingly scientific and transparent.

For example, during the review stage, we organized experts to strictly assess some pharmaceutical products that have low clinical value and whose inclusion in the catalog is not strongly necessary. For some products already included in the catalog, but whose costs or prices are too high, with substantial fund expenditure, and significant market changes, we conducted renegotiations to further reduce prices and costs.

In the negotiation and measurement phase, we study and determine a reasonable fund expenditure budget and consider it a hard constraint for catalog adjustments. For products with high costs and significant fund expenditures, a more substantial reduction can be applied to reflect a price reduction in exchange for volume." At today's press conference, Huang Xinyu, Director of the Drug Administration Department of the National Medical Insurance Administration, mentioned this first.

At the same time, according to Wang Guodong, Deputy Director of the Medical Insurance Center of the National Medical Insurance Administration, this year's catalog adjustment mechanism has also been further optimized, 'standardizing some material requirements, improving work efficiency, and ensuring the transparency and scientific norms of catalog negotiations.'

Specifically, the requirements for evaluation evidence will be clearer, making it easier for companies to provide more explicit evidence support. 'For example, in the application materials, we will emphasize clinical value more; in the negotiation material requirements, we will focus more on measurement, cost-effectiveness of drugs, and the impact on the medical insurance fund,' Wang Guodong stated.

There is also an emphasis on communication with companies, establishing a two-way communication mechanism to ensure the successful advancement of negotiations. Wang Guodong introduced that to familiarize companies with negotiation rules and the calculation methods of the medical insurance side, this year the Medical Insurance Bureau organized discussions for all companies participating in on-site negotiations or bidding, with the medical insurance side introducing relevant rule designs. In the review phase, expert group leaders were also organized to have face-to-face communications with companies one-on-one.

Since its establishment, the National Medical Insurance Administration has adjusted the medical insurance drug catalog for seven consecutive years, cumulatively adding 835 new good drugs, with 530 of them included through negotiation, playing a very positive and important role in enhancing public medication security and supporting the construction of health china.

However, in annual work, we still insist on continuous improvement, committed to making catalog adjustments more scientific, standardized, fair, and just,' Huang Xinyu stated.

The bottom price estimation focuses on innovative value.

The negotiation of medical pharmaceutical products mainly revolves around a negotiation bottom price, commonly referred to as the 'envelope price', and a successful negotiation occurs when the company's final quote does not exceed the 'envelope price'.

At today's press conference, Chen Wen, the head of the expert group for the 2024 adjustment of the national medical insurance drug catalog's pharmacoeconomic calculation, elaborated for the first time on how this crucial 'envelope price' is formed.

Chen Wen stated that after 7 years of continuous updates and improvements, the adjustment of the national medical insurance catalog has preliminarily established a set of systematic and scientific negotiation bottom price calculation techniques and methods in line with China's national conditions and in connection with international standards.

The pharmacoeconomic group of experts provides a comprehensive calculation to determine the benchmark payment standard through various methods, including pharmacoeconomic evaluation and evidence, domestic listed prices, international prices, and comparative prices of similar competing products.

This year's fund calculation will pay more attention to the impact on fund expenditures, while also enhancing the comprehensiveness and scientific nature of the calculation work.

For example, special consideration is given to the characteristics and advantages of traditional chinese medicine, optimizing the evaluation dimensions and calculation indicators accordingly; during the calculation, a higher economic threshold will be set for pharmaceuticals with a high degree of innovation and significant patient benefits; throughout the calculation process, there will be an increased emphasis on fairness considerations regarding prices among contemporaneous and similar category pharmaceuticals, as well as the rationality of prices between different generational drugs.

It is worth mentioning that in this year's calculation work, the expert group will also be more proactive in absorbing and adopting evidence materials provided by enterprises.

Chen Wen stated that given the lack of head-to-head evidence comparing the efficacy of some pharmaceuticals with reference drugs, this year experts will comprehensively evaluate the indirect comparison evidence submitted by companies, which has been scientifically designed and methodologically rigorous. Those that meet the criteria will be accepted, providing better support for calculations, further strengthening the correlation between calculation results and innovative ratings, and emphasizing the consistency between premiums and additional innovation value.

"This year's optimization and improvement of our calculation techniques and methods further explains the organic combination of innovative value with rigid and rational pricing. By establishing a multidimensional value assessment system centered on patient health benefits, we aim to guide the pharmaceutical industry to focus on true innovation, striving to create higher clinical value and establishing a clear orientation in support of innovation," Chen Wen stated.

The direction of innovation support remains unchanged.

Support for the development of innovative drugs in the secondary market has remained unwavering, and the same goes for medical insurance funds.

Huang Xinyu stated that since the establishment of the National Medical Insurance Administration, it has continuously deepened the management of the medical insurance drug catalog, and while maintaining basic guarantees, it is supporting the development of pharmaceutical innovation with unprecedented intensity.

Statistics show that after seven rounds of adjustments, a total of 149 innovative drugs (including class 1 chemical drugs, class 1 therapeutic biological products, class 1 and class 3 chinese patent medicine, and those supported by the national major new drug creation special fund) have been included in the medical insurance drug catalog. As of October 2024, the medical insurance fund has cumulatively paid over 350 billion yuan for negotiated drugs within the agreement period, driving related sales of over 510 billion yuan.

This year's catalog adjustment still focuses on new drugs. Among the 91 new drugs added, 90 are varieties that have been approved and launched in the last five years.

"We focus on class 1 chemical drugs, class 1 therapeutic biological products, class 1 and class 3 chinese patent medicine as key support objects, ensuring that good steel is used where it is most needed," Huang Xinyu stated.

Specifically, among the 91 new pharmaceutical products, 38 are global innovative drugs, setting a new high in both absolute numbers and proportions. During the negotiation phase, the success rate for innovative drugs reached over 90%, which is 16 percentage points higher than the overall success rate.

In addition, among the 91 newly added drugs, 65 are varieties from domestic companies, accounting for over 70%, and this percentage has shown a consistent upward trend in recent years.

Huang Xinyu stated that the adjustment of the medical insurance catalog began to shift to a declaration system in 2020, focusing primarily on drugs newly launched within the past five years. The medical insurance department has increased the weight of innovation during the review phase, fully considering the value of innovation during negotiations, and implemented some price reduction protection measures during the renewal phase, establishing a comprehensive support mechanism for the development of innovative drugs.

Our data monitoring indicates that among the 105 new drugs negotiated last year, the sales volume in October of this year has increased sixfold compared to January of this year, which can be said to be a significant increase, said Huang Xinyu.

However, he also emphasized that the innovations supported by the medical insurance fund should be 'true innovations.' Accordingly, the medical insurance department is exploring a scientific method to identify genuinely innovative and valuable drugs.

We have based our approach on the actual situation in china while also drawing on international experience, and with the technical support of relevant experts, we have improved the technical methods of drug evaluation. This assessment considers clinical value from aspects of safety, effectiveness, fairness, and innovation, focusing on the health benefits of patients. We quantify and grade the innovative value, achieving a shift in drug assessment from subjective to objective and from qualitative to quantitative.

With the preliminary establishment of a drug value assessment system covering the entire life cycle of drugs, we now have a basis for identifying, quantifying, and comparing the innovative value of drugs, which helps us achieve the policy goal of truly supporting innovation in the adjustment of the medical insurance fund or catalog.

Prices are too high and may require renegotiation.

"Clearly meeting the simple renewal rules, yet it was pulled out for renegotiation. This year's medical insurance negotiations seem to have tightened due to fund pressures." There are indeed some doubts in the market regarding this year's directory adjustment.

In 2022, the National Medical Insurance Administration introduced two new regulations: "non-exclusive pharmaceutical bidding" and "negotiated pharmaceutical renewals," forming different access channels for negotiated pharmaceuticals including "simple renewals," "renegotiated renewals," "negotiated additions," and "bidding additions."

"For simple renewals, as long as the fund spending budget declared by the enterprise in the previous round and the actual medical insurance fund spending during the agreement period are calculated to get a ratio, and compared with relevant rules, it can be straightforwardly determined how much to reduce without even negotiating." This was explained to reporters by a negotiating company regarding the operational process of "simple renewals."

"The varieties eligible for 'simple renewals' usually have a milder reduction. For example, in 2023, among the 100 renewed pharmaceuticals, 70% achieved renewal at their original price."

However, for a pharmaceutical to enter the "simple renewal" process, it must satisfy multiple conditions, including being an exclusive product, actual fund expenditures during the agreement period not exceeding 200% of the budgeted fund expenditure (enterprise estimated value), reasonable budget increase for fund expenditures in the next two years, and no significant changes in the market environment.

Chart | Rules for Simple Renewals of Negotiated Pharmaceuticals

According to various sources from the "Star" Daily, there are indeed varieties in this year’s national negotiations that did not exceed budget but were transitioned into the "negotiated renewal" process. Experts analyzing the reasons behind this suggest that it was due to changes in the "market environment."

Generally speaking, if an imported drug is already on the market both domestically and internationally during the agreement period, but the price abroad drops below the domestic price, then after the agreement period expires, it will definitely require a renegotiation of the price, regardless of whether it exceeded the budget.

There is also a situation where, during the agreement period, similar pharmaceuticals drop to a lower price, which means this drug will definitely need to be renegotiated upon renewal.

In addition, there is a situation where the pharmaceutical price is obviously too high, hence even if the negotiation conditions are not triggered, it may still be required to renegotiate the price. The other party stated that the uniqueness of this situation lies in the fact that "the company believes the market environment has not changed, but the medical insurance side may have a different determination."

Reporters from the Star noted that there were rumors in the industry previously stating that the products in the medical insurance directory of Jiangsu Huaneng——Pegloticase injection, were originally supposed to undergo a simplified renewal this year, but later changed to a negotiation renewal.

Pegloticase injection (Fleming) is a Class I new drug independently developed by Huaneng, and it is the first domestically produced long-acting GLP-1RA, requiring only one injection per week, used to improve blood sugar control in adults with type 2 diabetes.

Its similar drugs include$Novo-Nordisk A/S (NVO.US)$semaglutide,$Eli Lilly and Co (LLY.US)$Including dulaglutide and others. According to the latest national medical insurance catalog released today, these drugs are included, but the medical insurance prices have not been announced.

However, based on publicly available information, the reporter from the STAR Daily found that before the adjustment of this year's catalog, the daily treatment cost of lixisenatide was higher than that of similar drugs such as semaglutide and dulaglutide, so the negotiation for renewal is also somewhat reasonable.

Several star drugs have been included.

"A medication for treating severe mental illnesses, one injection can be effective for half a year, compared to the original monthly injection drugs within the catalog, it greatly enhances patient compliance and reduces the burden on the medical system. The cost of treatment after this year's negotiation is more than 30% lower than the original monthly dosage, achieving 'quality improvement without price increase.'"

It can be seen that the admission of medical insurance drugs has another trend worth noting, which is to insist on including more and more cost-effective drugs. In this way, without significantly increasing fund expenditure, the level of protection can also be improved.

The reporter from the STAR Daily speculated after checking publicly available information that the above-mentioned long-acting medication for mental illnesses should be Johnson & Johnson's Invega (paliperidone palmitate injection, 6M). This drug was just approved in China in June this year, for adults with schizophrenia who have received at least three months of adequate treatment with paliperidone palmitate injection (3M).

As a new member of Johnson & Johnson's long-acting injection family, Invega is also currently the first and only long-acting injectable antipsychotic drug in China that requires only two injections a year.

"For families of schizophrenia patients, medication compliance is particularly important. Many schizophrenia patients cannot take their medication regularly due to their condition, but if they can use a long-acting injection that lasts half a year with just one shot, it can significantly reduce the care burden on the patient's family and even on the whole society, which is highly significant." An expert expressed this to the reporter.

According to public information, the price of the long-acting antipsychotic injection administered once a month is currently between 1,000 and 2,000 yuan per injection. Therefore, the annual treatment cost of the paliperidone palmitate injection (6M) after the price reduction is expected to be around tens of thousands of yuan, significantly alleviating the treatment burden for patients. Additionally, according to johnson & johnson, two of its products, the paliperidone palmitate injection (3M) and the tofacitinib injection, have also successfully renewed their contracts this year.

In this year's medical insurance negotiations, some previously highly anticipated yet difficult to reduce in price blockbuster products have made breakthroughs.$Daiichi Sankyo (4568.JP)$/$AstraZeneca (AZN.US)$The miracle drug for breast cancer, the injectable trastuzumab deruxtecan (DS-8201), is one of them.

Although before this medical insurance negotiation, the price of trastuzumab deruxtecan had dropped from 8,860 yuan per vial to 6,912 yuan per vial, its annual treatment cost is still over 0.3 million yuan. This year, the product successfully negotiated, and it is expected that its treatment cost will further converge with similar drugs listed in the catalog, potentially dropping to over 100,000 yuan annually.

A patient’s family member, Mr. Li, told the Star Daily reporter that since the end of October this year, he has been closely monitoring the medical insurance negotiation trends for DS-8201.

My mother is a triple-negative breast cancer patient and has been controlling it through chemotherapy since her surgery in 2022. Triple-negative breast cancer is the most dangerous type of breast cancer, with fewer treatment options and a high chance of recurrence. In August of this year, my mother's condition further progressed, causing her great suffering.

Through the doctor's introduction, I learned about the drug DS-8201. After searching for related reports and understanding the experiences of other patients, I placed great hope on it for future treatment. However, besides worrying whether the drug will be effective, the biggest concern is still its high cost. Mr. Li stated that although the drug had a price reduction this June, the cost for a treatment cycle still reaches around 20,000 to 30,000 yuan, which is undoubtedly a huge burden for ordinary families.

Today I learned that the negotiation for DS-8201 was successful, and Mr. Li expressed that his excitement and joy are truly hard to put into words. 'Seeing in the patient group that everyone is also very excitedly sharing this good news. As a family member of a patient, it feels like seeing a ray of new light in the gloom, which further increases confidence to continue moving forward on the road of fighting cancer,' he said.

Editor/Rocky