Core Insights - The National Healthcare Security Administration (NHSA) announced that the medical insurance fund expenditure for negotiated drugs will exceed 100 billion yuan during the 2024 agreement period [1] - The number of approved innovative Class 1 drugs in China has significantly increased, reaching 48 in 2024, which is more than five times the number in 2018; nearly 40 have been approved in the first half of this year, indicating a surge in approvals [1] - The "Several Measures to Support the High-Quality Development of Innovative Drugs" outlines 16 initiatives across five areas to enhance support for innovative drug research and development, inclusion in medical insurance, clinical application, payment capabilities, and organizational guarantees [1] Industry Developments - The NHSA emphasizes the need to support true innovation and differentiated innovation in the biopharmaceutical industry to avoid excessive competition and homogenization of products [1] - There is a focus on providing necessary medical insurance data services to support innovative drug research while ensuring data security and compliance [1] Medical Insurance Access - The NHSA is negotiating with innovative drug companies to establish medical insurance payment standards, creating a multi-dimensional value assessment system centered on patient health benefits [2] - For cases involving the reasonable use of innovative drugs within the medical insurance directory, medical institutions are supported in independently reporting special cases when standard disease-based payments are not suitable [2] - Innovative drugs listed in commercial health insurance directories will not be included in the basic medical insurance self-payment rate indicators, allowing for more flexible payment arrangements [2]

Investment Rating - The industry investment rating is positive, with expectations of overall returns exceeding the CSI 300 index by more than 5% in the next six months [11]. Core Insights - The introduction of the "Measures to Support the High-Quality Development of Innovative Drugs" marks a significant opportunity for the innovative drug sector, addressing key challenges in research, payment, and clinical application [4][8]. - The report emphasizes a comprehensive support system for innovative drug development, including the use of national health insurance data to guide research directions and enhance innovation efficiency [5]. - The measures aim to optimize the inclusion of innovative drugs in the basic medical insurance catalog and commercial health insurance, ensuring that they meet clinical value and market conditions [6][9]. - The report highlights the potential for innovative drugs to expand their market reach, both domestically and internationally, under the Belt and Road Initiative, enhancing accessibility for patients [9]. Summary by Sections Industry Ratings - Sub-industry ratings for chemical pharmaceuticals, traditional Chinese medicine, and biopharmaceuticals are currently not rated [3]. Recommended Companies and Ratings - Companies such as Kelun-Botai, Kangfang Biotech, Lepu Biotech, Maiwei Biotech, and Ailis are expected to experience a new round of high-quality development opportunities, maintaining a "buy" rating [9].

Group 1 - The core viewpoint of the articles is the support for the development of innovative drugs in China, as outlined in the measures released by the National Healthcare Security Administration and the National Health Commission, which include 16 specific initiatives to enhance the entire chain of innovative drug research and development, access, hospital use, and multi-payment systems [1] - The innovative drug sector has shown strong performance, with the Sci-Tech Innovation Pharmaceutical ETF (588860) achieving a trading volume of 33.04 million yuan on average over the past six months, ranking first among comparable funds [1] - The Sci-Tech Innovation Pharmaceutical ETF closely tracks the Shanghai Stock Exchange Sci-Tech Innovation Board Biopharmaceutical Index, which consists of 50 large-cap companies in the biopharmaceutical and related sectors, reflecting the overall performance of representative companies in the innovative pharmaceutical industry [1] Group 2 - The Sci-Tech Innovation Pharmaceutical ETF (588860) is characterized by high elasticity, with potential index fluctuations of up to 20%, focusing on medical innovation devices and innovative drugs, and has the lowest management and custody fees among similar ETFs at 0.45% and 0.07% respectively [2] - Domestic innovative drug companies are entering a harvest phase after years of R&D investment, with recent favorable policies and increasing overseas licensing amounts contributing to performance growth [2] - The market outlook remains positive for innovative drug companies with true innovation capabilities, as they are expected to have greater valuation elasticity, while cyclical recovery presents opportunities in upstream sectors like CXO and scientific services [2] Group 3 - The Hong Kong Stock Connect Innovative Drug ETF (ICBC, 159217) closely tracks the National Index of Hong Kong Stock Connect Innovative Drugs, with a management fee of 0.40% and a custody fee of 0.07%, both among the lowest in its category [3] - The tracking error of the Hong Kong Stock Connect Innovative Drug ETF over the past two months is 0.8395%, indicating a strong alignment with its benchmark index [3]

Investment Rating - The report maintains an "Overweight" rating for the pharmaceutical industry [1] Core Insights - The report discusses the issuance of 16 supportive policies by the National Healthcare Security Administration and the National Health Commission aimed at enhancing the high-quality development of innovative drugs [3] - It emphasizes a comprehensive support system that includes research and development, market access, payment mechanisms, and clinical application to transition China from a "generic drug powerhouse" to an "innovative drug stronghold" [8] Summary by Sections Research and Development - Data empowerment and the introduction of patient capital are expected to reduce the risks associated with innovative drug development [4] - The policy guidance aims to lower the backend risks of innovative drug research and development [4] Market Access and Payment - The dual drive of medical insurance and commercial insurance is set to expand market opportunities [5] - The dynamic adjustment mechanism for the medical insurance catalog will shorten the time gap between drug approval and market entry [7] - The introduction of a commercial health insurance catalog for innovative drugs will diversify the payment system for high-end innovative drugs [7] Clinical Application - The report highlights the optimization of processes and diversified guarantees to facilitate the final stages of drug application [6] - Encouragement for medical institutions to expedite the use of innovative drugs post-catalog updates is expected to enhance the speed of drug deployment in clinical settings [7] Investment Recommendations - The report suggests focusing on leading innovative drug companies and specialized biotech firms, including 恒瑞医药 (Hengrui Medicine), 信达生物 (Innovent Biologics), 康诺亚 (CanSino Biologics), 药明康德 (WuXi AppTec), and 凯莱英 (Kelun) [8]

Core Viewpoint - The A-share innovative drug sector experienced a significant surge on July 1, driven by favorable policy announcements from the National Medical Insurance Administration and the National Health Commission, which aim to support the high-quality development of innovative drugs [1][4]. Group 1: Market Performance - Frontier Biotech reached a 20% limit-up, with other companies like Guizhou BaiLing, Saily Medical, and AngliKang also hitting their limits [2]. - Notable stock performances included: - Frontier Biotech: 12.05 (+20.02%) - Kexing Pharmaceutical: 44.19 (+15.62%) - Yuyuan Pharmaceutical: 22.00 (+15.55%) - Shuyitai: 43.00 (+15.34%) - Rongchang Biotech: 68.39 (+13.04%) [3]. Group 2: Policy Support - The new measures encourage the use of medical insurance data for innovative drug research and development, enhancing collaboration among medical, insurance, and pharmaceutical sectors [4][6]. - The policy promotes the expansion of commercial health insurance investments in innovative drugs, establishing a new directory for innovative drugs that exceed basic insurance coverage [6]. - The National Medical Insurance Administration plans to streamline the application process for including drugs in both commercial and medical insurance directories, reducing the administrative burden on companies [6]. Group 3: Industry Outlook - The innovative drug sector is in a golden development phase, with over 20 first-class innovative drugs approved for market entry from January to May, marking a five-year high [7]. - Chinese pharmaceutical companies are accelerating their international expansion, with over 90 overseas licensing transactions expected in 2024, totaling over $50 billion [7]. - Significant licensing deals include: - 12.5 billion USD deal by 3SBio - 53.3 billion USD collaboration between CSPC and AstraZeneca - 42.3 billion USD agreement by Rongchang Biotech [7]. - Several biotech firms are increasing R&D investments through share placements, with funds directed towards global R&D pipelines [8]. Group 4: Investment Sentiment - Analysts agree on the sustainable growth potential of the innovative drug sector, emphasizing the "innovation + internationalization" trend as a core focus for the pharmaceutical industry [9]. - Investment opportunities are seen in the upstream pharmaceutical supply chain, advanced manufacturing, and healthcare services, with a focus on companies with strong growth potential and profitability [9].

Core Viewpoint - The National Healthcare Security Administration (NHSA) has introduced measures to support the high-quality development of innovative drugs, emphasizing the need for improved management and clinical use of these drugs in healthcare institutions [1][2]. Group 1: Support for Innovative Drugs - The NHSA encourages healthcare institutions to actively incorporate innovative drugs into their practices, allowing for flexibility in drug procurement without being limited by existing drug directories or ratios [1]. - In 2022, the evaluation of drug varieties and specifications in tertiary hospitals was adjusted, removing previous restrictions at the national level [1]. Group 2: Enhancing Clinical Use Capabilities - There is a focus on improving the clinical use capabilities of innovative drugs, with an emphasis on guiding healthcare professionals to use these drugs safely and effectively [2]. - The NHSA encourages industry associations and healthcare institutions to summarize experiences in the use of innovative drugs to enhance their application [2]. Group 3: Optimizing Reimbursement Standards - The NHSA aims to refine the reimbursement standards for innovative drugs, allowing healthcare institutions to apply for special cases if the drugs do not fit into the standard payment categories [2]. - The NHSA is also working on reforming the settlement process and implementing a prepayment system for medical insurance funds, which has shown positive effects on fund efficiency and cash flow for healthcare institutions [2].

Core Viewpoint - The introduction of the "Several Measures to Support the High-Quality Development of Innovative Drugs" aims to address key issues in the development of innovative drugs in China, focusing on a full-chain support system for research, access, hospital use, and multi-payment options [1][2]. Group 1: Measures and Support - The measures include 16 specific actions across five areas to enhance the research and development of innovative drugs, ensuring alignment with clinical treatment needs [2]. - A new payment system for innovative drugs will be established, which includes regular adjustments to the medical insurance catalog and the introduction of commercial health insurance for innovative drugs [2]. - Policies will be implemented to improve the accessibility of innovative drugs, addressing concerns related to their use in various stages such as listing, hospital admission, payment, and distribution [2]. Group 2: Future Actions - The National Healthcare Security Administration and the National Health Commission will implement the measures to support the high-quality development of innovative drugs, ensuring the health rights of the public are better protected [2].

Core Viewpoint - The National Healthcare Security Administration and the National Health Commission have issued 16 measures to support the high-quality development of innovative drugs, which will play a significant role in the industry [1] Group 1: Support for Innovative Drug Development - The measures aim to create a new landscape for innovative drug research and development that is oriented towards clinical value, stimulating R&D vitality through various supports such as healthcare data, investment encouragement, and national science and technology projects [1] - The implementation of a directory access policy and guidance will help align innovative drug development with clinical treatment needs [1] Group 2: Multi-Payment System for Innovative Drugs - A multi-payment system for innovative drugs will be established to broaden payment channels, including regular adjustments to the healthcare insurance directory to include eligible innovative drugs at reasonable prices [1] - The introduction of a commercial health insurance directory for innovative drugs will enhance the multi-layered medical security system and improve payment capabilities [1] Group 3: Accessibility of Innovative Drugs - The measures propose practical policies to enhance the accessibility of innovative drugs, addressing concerns related to their use across various stages such as listing, hospitalization, payment, and distribution [1] - Encouragement for the rational use of innovative drugs is emphasized to improve their availability in the market [1]

国家医保局将于7月1日(周二)上午10：00召开新闻发布会，介绍《支持创新药高质量发展的若干措施》 有关情况，并回答记者提问。(国家医保局) ...