Core Viewpoint - The National Financial Regulatory Administration is developing guidelines to enhance the service and protection levels of health insurance, focusing on aligning supply and demand, improving industry operational capabilities, strengthening regulation, and optimizing the development environment for health insurance [1] Group 1: Health Insurance Development - The guidelines aim to clarify the development priorities and tasks for various health insurance products [1] - Commercial health insurance is increasingly recognized as a significant payment method for innovative drugs, with total compensation expected to reach approximately 12.4 billion in 2024, reflecting a compound annual growth rate of 103% over three years [2] - The government has mandated the expansion of health insurance coverage to include new medical technologies, drugs, and devices [2] Group 2: Insurance Product Structure - The commercial medical insurance market has developed a "full coverage, multi-tiered" protection system, including various types of insurance such as basic health insurance, million medical insurance, mid-range medical insurance, and high-end medical insurance [2] - Million medical insurance products generally cover a wide range of hospital medications, including those not listed in the medical insurance directory, and extend coverage for outpatient special drugs and devices [3] - High-end medical insurance often includes advanced treatment options like cell immunotherapy and CAR-T therapy [3] Group 3: Challenges and Opportunities - The current payment structure for innovative drugs shows that basic medical insurance covers 44%, personal payments account for nearly 50%, and commercial insurance only represents 7.7%, indicating significant room for growth [4] - The pharmaceutical industry faces challenges such as intensified competition, discrepancies between corporate pricing expectations and insurance payment capabilities, and the need to unlock multi-faceted payment potential [4] - Collaboration between insurance companies, pharmaceutical firms, and healthcare providers is essential to enhance payment capabilities and sustainability for innovative drugs [5][6] Group 4: Collaborative Ecosystem - A four-party collaboration involving government departments, insurance companies, pharmaceutical enterprises, and ecosystem partners is recommended to create a "health insurance-pharmaceutical value symbiosis" [6] - Establishing a sustainable ecosystem requires mutual risk-sharing, data interoperability, and innovative payment tools, with commercial insurance acting as a critical leverage point [6]

Core Insights - The rapid implementation of DRG/DIP payment reform and the normalization of drug procurement have led to a surge in demand for "out-of-hospital medication coverage" among patients [1][10] - Insurance companies are accelerating the iteration and upgrade of high-end medical insurance products, with "out-of-purchase drug responsibility" becoming a focal point of this product upgrade [1][4] Group 1: Market Dynamics - The out-of-purchase drug responsibility allows insurance companies to reimburse patients for medications purchased outside the hospital when necessary drugs are unavailable [2][3] - Major insurance companies like ZhongAn, Pacific Health, and Xinhua Insurance are launching innovative products to meet the urgent demand for advanced medications and special medical services [2][4] Group 2: Policy Impact - The DRG/DIP payment model has pressured hospitals to control costs, leading to cautious use of high-value original and imported drugs, pushing patients towards external purchasing channels [3][10] - The National Healthcare Security Administration has introduced measures to control unreasonable medical expenses, which has further influenced patient medication channels and cost-sharing models [2][7] Group 3: Product Innovation - Recent insurance products have incorporated out-of-purchase drug responsibilities, with companies like ZhongAn and Pacific Health offering comprehensive coverage without restrictions on disease types or medication lists [4][5] - Xinhua Insurance has made bold attempts in out-of-purchase drug responsibility, including a wide range of medications and specialized health management services [6][9] Group 4: Future Outlook - The collaboration between commercial insurance and basic medical insurance is crucial for developing a new payment ecosystem for innovative drugs [7][10] - The introduction of the "three exclusions" policy is expected to enhance the role of commercial insurance in covering high-value innovative drugs, providing a clearer boundary for insurance responsibilities [8][9]

Investment Rating - The investment rating for the healthcare industry is "Positive" and is maintained [8]. Core Viewpoints - The issuance of "Several Measures to Support the High-Quality Development of Innovative Drugs" by the National Medical Insurance Administration and the National Health Commission on June 30, 2025, aims to enhance the support for the entire chain of innovative drug development, promoting high-quality development of innovative drugs to better meet the diverse medical and pharmaceutical needs of the public [2][6]. Summary by Relevant Sections - **Research and Development**: There is an increased emphasis on supporting innovative drug research and development. This includes utilizing medical insurance data for R&D, encouraging commercial health insurance to expand investment in innovative drugs, and enhancing the guidance on drug directory access policies. The focus will be on major infectious diseases, prevalent chronic diseases, pediatric medications, and rare diseases to avoid homogenization in R&D [11]. - **Payment Mechanism**: The report supports the inclusion of innovative drugs in the basic medical insurance drug directory and commercial health insurance innovative drug directories. It emphasizes the need for a dynamic adjustment mechanism for the basic medical insurance drug directory and improving the professional capacity for negotiation and pricing of innovative drugs [11]. - **Application Process**: The report suggests optimizing the drug listing process, allowing companies to choose the provinces for the first listing of innovative drugs. It also encourages timely adjustments in drug supply and procurement processes in medical institutions to meet clinical needs and ensure patient access to innovative drugs [11].

Group 1 - The core viewpoint of the articles highlights the urgent need for reform in the payment system for innovative drugs in China, particularly in light of the high costs associated with treatments like CAR-T therapy [1][5][6] - Since the reform of the drug review and approval system in 2015, the Chinese innovative drug industry has experienced explosive growth, with a significant increase in the number of new drug approvals and faster market entry [1][5] - By 2023, over 90% of the "Hui Min Bao" (a type of commercial health insurance) included special drug coverage, indicating a shift in the insurance landscape towards accommodating high-cost innovative therapies [2][3] Group 2 - The "Sui Xin Bao" series of products launched in Guangzhou represents a significant step in integrating innovative drugs into commercial health insurance, breaking traditional limitations and facilitating one-stop settlement with medical insurance [3][4] - The commercial health insurance market is evolving, with many insurers upgrading special drug coverage from an optional add-on to a core component of their policies [3][4] - The projected sales of innovative drugs in 2024 are expected to reach 162 billion yuan, with a significant portion of costs still borne by patients, highlighting the need for a more balanced payment structure involving commercial health insurance [5][7] Group 3 - The recent policy initiatives emphasize the importance of a multi-tiered medical insurance system, positioning commercial health insurance as a crucial pillar for supporting innovative drug payments [2][6] - The integration of insurance and medical services is becoming a competitive focus, with innovations like "one-code direct payment" aiming to streamline the payment process for patients [6][7] - If the patient self-payment ratio can be reduced from 49% to 20%, the share of commercial health insurance in the innovative drug market could rise significantly, potentially exceeding 440 billion yuan by 2035 [7]

Core Viewpoint - The industry is eagerly awaiting the introduction of the Class C medical insurance directory to address the payment challenges associated with innovative drugs, which have high development costs and long research timelines, leading to high prices [2][3][4]. Group 1: Class C Medical Insurance Directory - The Class C directory is intended to supplement the basic medical insurance drug directory, focusing on highly innovative drugs with significant clinical value that cannot currently be included in the basic insurance directory [3]. - The timeline for the Class C directory's release has faced delays, with initial plans for a 2025 launch now uncertain, as the industry prepares for the necessary adjustments to align with commercial health insurance products [3][4]. - The introduction of the Class C directory is seen as a potential solution to the current barriers faced by innovative drugs in gaining market access, particularly in light of the existing implicit thresholds for pricing negotiations [2][4]. Group 2: Commercial Health Insurance - The commercial health insurance sector is being positioned as a crucial component of a multi-tiered medical security system, with ongoing discussions about how to fund, price, and implement coverage for innovative drugs [5][6]. - The commercial health insurance directory is being developed to create a more standardized reference for drugs covered by various local health insurance plans, which could enhance the accessibility of innovative treatments [4][5]. - The current market for innovative drugs in China is limited, with only 23% of the pharmaceutical market share, compared to 80% in the U.S. and 70% in Japan, indicating significant room for growth in commercial health insurance's role in this sector [7][8]. Group 3: Financial Implications and Market Response - The projected sales for innovative drugs in 2024 are expected to reach 162 billion yuan, with the medical insurance fund covering approximately 44% of these costs, while personal payments account for about 49% [7]. - The overall balance of the national medical insurance fund is showing slight surpluses, but the growth rate is slowing, raising concerns about the sustainability of funding for innovative drugs amid increasing healthcare demands [7][8]. - The market has responded positively to the potential for policy changes, with significant increases in the stock performance of innovative drug ETFs, reflecting investor optimism about resolving payment challenges [8].

Core Insights - The increasing pressure on medical insurance funds is driven by an aging population and rising medical costs, while the demand for innovative drugs and personalized medicine continues to grow [1][2] - Commercial health insurance is seen as a crucial solution to address the payment challenges for innovative drugs and to enhance the multi-tiered medical security system [2][6] Summary by Sections Current State of Medical Insurance - China has established a comprehensive basic medical insurance system, covering a wide range of the population and providing reliable medical security [3] - As of the end of 2023, the fund payment ratio for employee medical insurance in hospitals is 84.6%, while for resident medical insurance, it is 68.1% [3] Personal Medical Expenses - Despite high coverage levels, personal medical expenses remain significant, with personal health expenditure accounting for 27.3% of total health spending in 2023 [4] - Direct medical expenses in 2023 reached approximately 57 trillion yuan, with personal out-of-pocket payments exceeding 25 trillion yuan, representing over 40% [4] Role of Commercial Health Insurance - Commercial health insurance is currently underutilized, covering only about 0.38 trillion yuan of medical expenses, which is less than 7% of total medical costs [4] - Policies have been introduced to emphasize the importance of commercial health insurance and to include innovative drugs in its coverage [5][4] Focus on Innovative Drug Coverage - There is a pressing need for commercial health insurance to focus on covering expenses for innovative drugs that are not included in the basic medical insurance directory [6][8] - The establishment of a commercial health insurance drug directory is crucial for improving access to innovative drugs and high-value medical services [9] Collaboration and Innovation - The construction of a commercial health insurance directory should complement the basic medical insurance directory to effectively support innovative drug coverage [9][10] - Collaboration among insurance companies, pharmaceutical firms, and hospitals is essential for enhancing the accessibility of innovative drugs and addressing payment challenges [10]

Core Insights - The article emphasizes the importance of commercial health insurance as a key player in facilitating access to innovative drugs in China, highlighting the need for a transformation in the payment system to ensure that the value of these drugs reaches patients effectively [1][2][3]. Group 1: Current Landscape of Commercial Health Insurance - Commercial health insurance has made significant strides in providing coverage for innovative drugs, with products like "Hui Min Bao" and "Million Medical Insurance" offering structured coverage [2]. - As of 2024, the market size for innovative drugs and devices in China is projected to reach 162 billion yuan, with commercial health insurance accounting for only 7.7% of the payment structure, significantly lower than the 49% self-pay and 44% from medical insurance [2][3]. - The potential for commercial health insurance to play a more substantial role in the payment structure for innovative drugs is considerable, especially for high-value drugs that are still recovering their R&D costs [2][3]. Group 2: Challenges and Opportunities - The payment pathways for innovative drugs through commercial health insurance remain fragmented, with low sales efficiency and limited total premium scale [4][5]. - There is a need for expanded coverage of innovative drugs within existing insurance products, as many current plans do not adequately include these drugs in their standard coverage [5]. - The lack of standardized health insurance products leads to unclear coverage and responsibilities, which hinders the efficiency and effectiveness of the insurance system [5][6]. Group 3: Future Directions - To unlock the payment potential of commercial health insurance for innovative drugs, there is a call for the establishment of a commercial insurance drug directory, which would clarify coverage and enhance transparency [7][8]. - Collaboration between pharmaceutical companies and insurance providers is essential to share payment risks, which would facilitate the inclusion of high-priced drugs in insurance coverage [7][8]. - The development of a multi-tiered and diverse product structure within the commercial health insurance system is necessary to cater to various patient demographics, particularly the elderly and those with chronic conditions [8][9].

Core Viewpoint - The commercial health insurance sector is becoming an essential part of China's multi-tiered medical security system, with the commercial insurance directory emerging as a key lever for high-quality development [1][2]. Group 1: Commercial Health Insurance Development - The commercial health insurance market is experiencing robust growth, with a continuous expansion of business scale and service capabilities, providing diversified health protection for the public [1]. - As of the end of 2024, the sales scale of China's innovative drug market is expected to reach 162 billion yuan, with commercial health insurance accounting for only 7.7% of the payment, highlighting the need for increased commercial insurance involvement [2][3]. - The total health payment market is projected to exceed 1 trillion yuan in 2024, with health insurance premiums reaching 977.3 billion yuan, emphasizing the urgency to develop commercial health insurance [2]. Group 2: Challenges and Opportunities - The high personal payment ratio and low commercial insurance payment ratio indicate that commercial health insurance is a viable path to reduce personal payment burdens [3]. - The development of innovative drugs is significantly dependent on the support of diversified payment from commercial insurance, as current payment structures limit the use of innovative drugs in hospitals [3][4]. - The establishment of a comprehensive commercial insurance directory is crucial for addressing the payment challenges of innovative drugs and ensuring that commercial insurance complements basic medical insurance [3][4]. Group 3: Directory Construction and Implementation - The proposed commercial insurance directory could be categorized into three classes: Class A (fully reimbursed by basic insurance), Class B (partially reimbursed), and Class C (not reimbursed) [4]. - The integration of commercial insurance and pharmaceutical companies is essential, as current discrepancies in the directory lead to resource misallocation [6]. - A unified platform for information sharing between basic medical insurance and commercial insurance is recommended to reduce patient out-of-pocket expenses and improve data accuracy [6][7]. Group 4: Regulatory and Regional Considerations - The rapid development of commercial insurance payment practices faces challenges such as data security and regional disparities in drug pricing and insurance product competitiveness [7]. - Regulatory bodies are adopting differentiated strategies to manage these issues, allowing for innovation in developed regions while maintaining caution in less developed areas [7].