Investment Rating - The report maintains an "Outperform" rating for several companies in the innovative drug and medical device industry, including Jiangsu Heng Rui Medicine, Hansoh Pharmaceutical Group, 3SBio, Sichuan Kelun Pharmaceutical, and Jiangsu Nhwa Pharmaceutical [5][6][25]. Core Insights - The report emphasizes the high prosperity in innovative drugs and continues to recommend companies with innovative pipelines that are entering a volume increase phase, maintaining "Outperform" ratings for various Biopharma/Biotech companies [5][25]. - The National Healthcare Security Administration announced the 2025 insurance drug list, which added 114 drugs, including 50 innovative drugs, further validating insurance support for innovation and indicating promising domestic demand [26][27]. Summary by Sections 1. Continuous Recommendation of Innovative Drugs and Industry Chain - The report highlights the ongoing recommendation of innovative drugs and the industry chain, with a focus on companies expected to see a revaluation due to their innovative pipelines [5][25]. - Specific companies mentioned include WuXi AppTec, WuXi XDC Cayman, Hangzhou Tigermed Consulting, and leading medical equipment companies like Beijing Chunlizhengda Medical Instruments and Lepu Medical, all rated "Outperform" [5][25]. 2. Performance of A-Shares Pharmaceutical Sector - In the second week of December 2025, the A-Shares pharmaceutical sector underperformed the market, with the SW Pharma and Biotech index falling by 1.0% compared to a 0.3% decline in the SHCOMP [8][27]. - The report notes that the premium level of the pharmaceutical sector relative to all A-Shares is at a normal level, with a current relative premium rate of 69.8% [16][27]. 3. Performance of Hong Kong and U.S. Pharmaceutical Sectors - The Hong Kong stock pharmaceutical sector underperformed the market, with the Hang Seng Healthcare index falling by 2.3%, while the U.S. stock pharmaceutical sector outperformed, with the S&P 500 Healthcare Select Sector Index rising by 0.4% [28][27].

Core Insights - The National Healthcare Security Administration (NHSA) has introduced 114 new drugs to the basic medical insurance catalog for 2025, with a significant focus on innovative treatments and a record number of new drugs added [1][5][6] Summary by Sections New Drug Additions - A total of 114 drugs were added to the basic medical insurance catalog, including 105 through negotiation, 7 through competitive bidding, and 2 directly from national procurement [1] - Among the new additions, 111 are new products launched within the last five years, representing nearly 98% of the total, with 50 classified as Category 1 new drugs, marking a historical high in both proportion and quantity [1][5] Therapeutic Areas - The newly added drugs cover critical therapeutic areas such as oncology, anti-infection, chronic diseases, rare diseases, and mental health, addressing diverse clinical needs [1][5][6] Directory Adjustment Process - The adjustment process involved four main stages: application, review, negotiation/bidding, and results. A total of 718 applications were received, with 535 passing the initial review, resulting in an 85% approval rate [3] - In the expert review phase, 311 drugs were evaluated, with 129 passing, leading to a 41.48% approval rate [3][4] Negotiation Success Rates - The negotiation and bidding phase saw 127 drugs participate, with 112 successfully negotiated, achieving a success rate of 88.19%, the highest since 2018 [4][5] Commercial Insurance Innovation - The first commercial insurance innovative drug catalog was released alongside the basic insurance adjustments, featuring 19 innovative drugs from 18 companies, with 9 being Category 1 new drugs [2][7] - The commercial insurance catalog aims to complement the basic insurance, providing additional support for high-cost innovative drugs while ensuring basic medication needs are met [2][8] Future Considerations - The NHSA emphasizes the importance of a multi-layered medical insurance system, encouraging the integration of commercial health insurance and innovative drug catalogs to enhance patient access to diverse treatment options [8][10] - Key challenges include aligning the different execution cycles of basic insurance and commercial products, as well as improving communication between insurance companies and pharmaceutical firms [9][10]

Core Insights - The National Healthcare Security Administration (NHSA) has released the updated National Basic Medical Insurance, Maternity Insurance, and Work Injury Insurance drug catalog, adding 114 new drugs, significantly enhancing coverage in key areas such as oncology [1][2] - The report highlights a successful establishment of a clear direction for supporting genuine and differentiated innovation through strategic purchasing [1] - The commercial health insurance drug catalog has been introduced, complementing the basic medical insurance and laying the foundation for a multi-tiered medical security system [3] Group 1: Drug Catalog Adjustments - The recent adjustment added 114 new drugs, including 50 class 1 innovative drugs, with an overall negotiation success rate of 88%, up from 76% in 2024 [2] - The total number of drugs in the catalog has increased to 3,253, with significant improvements in coverage for oncology, chronic diseases, mental illnesses, rare diseases, and pediatric medications [2] Group 2: Financial Implications - During the 14th Five-Year Plan period, the cumulative expenditure of the medical insurance fund exceeded 13 trillion yuan, benefiting nearly 20 billion patient visits [1] - Over the past seven years, 835 new drugs have been included in the medical insurance payment scope, with 149 of them being innovative drugs, and approximately 80% of innovative drugs being included within two years of market launch [1] Group 3: Commercial Health Insurance Developments - The first version of the commercial health insurance innovative drug catalog includes 19 drugs, focusing on high innovation, significant clinical value, and patient benefits beyond basic insurance coverage [3] - The introduction of the commercial health insurance catalog is expected to clarify the boundaries of basic medical insurance and promote the differentiated development of commercial health insurance [3]

Core Insights - The National Healthcare Security Administration (NHSA) has released the updated National Basic Medical Insurance, Maternity Insurance, and Work Injury Insurance drug catalog for 2025, adding 114 new drugs, significantly enhancing coverage in key areas such as oncology [1][2] - The commercial health insurance drug catalog complements the basic medical insurance, clarifying the boundaries of basic insurance coverage and promoting the development of a multi-tiered medical security system [1][3] Group 1: Drug Catalog Adjustments - The recent adjustment includes 114 new drugs, with 50 being class 1 innovative drugs, and the overall success rate of drug negotiations for the insurance catalog has increased to 88% from 76% in 2024 [2] - The total number of drugs in the catalog has risen to 3,253, with significant improvements in coverage for oncology, chronic diseases, mental health, rare diseases, and pediatric medications [2] Group 2: Strategic Purchasing and Funding - During the 14th Five-Year Plan period, the cumulative expenditure of the medical insurance fund exceeded 13 trillion yuan, benefiting nearly 20 billion patient visits [1] - Over the past seven years, 835 new drugs have been added to the insurance payment scope, including 149 innovative drugs, with approximately 80% of innovative drugs being included within two years of market launch [1] Group 3: Commercial Health Insurance Innovations - The first version of the commercial health insurance innovative drug catalog includes 19 drugs, focusing on high-innovation and high-clinical-value drugs that exceed basic insurance coverage [3] - This catalog includes treatments for conditions such as cancer, neuroblastoma, Gaucher disease, and Alzheimer's disease, aiming to enhance the multi-tiered medical security system [3]