Core Insights - The National Healthcare Security Administration (NHSA) has published the preliminary review results for the 2025 medical insurance and commercial insurance innovative drug directory, with significant changes in the approval status of six drugs compared to the previous version [1][2]. Summary by Categories Drug Approval Changes - Six drugs have had their approval status changed, with two drugs (Injectable Risperidone Microspheres and Injectable Triptorelin Acetate) being disapproved, while two others (Levodopa Injection and Calcium Gluconate Sodium Chloride Injection) have been approved [1][3]. - The oral suspension of Ursodeoxycholic Acid remains approved, but the conditions for approval have been adjusted [1][3]. Application Statistics - For the 2025 directory adjustment, the NHSA received 718 applications, involving 633 drug generic names, with 535 passing the preliminary review [1][2]. - The approval rate has increased significantly, reaching 84.52% this year, compared to 68.42% in 2023 and 76.66% in 2024 [2]. Notable Drugs - Levodopa Injection, used for Parkinson's disease, has been approved and is not an exclusive product, indicating its potential for broader market access [4]. - Injectable Ceftriaxone Sodium Sulbactam, another approved drug, is noted for its broad antibacterial spectrum and safety profile [4]. - The oral suspension of Ursodeoxycholic Acid has had its approval conditions modified to include rare disease categories [6]. Innovative Drug Directory - The commercial insurance innovative drug directory has been introduced alongside the basic medical insurance directory, with 141 applications received, of which 121 passed the preliminary review [2]. - A significant number of drugs in both directories are new, with 303 in the basic medical insurance directory meeting specific conditions for approval [7]. Rare Disease Drugs - The directories include a total of 37 rare disease drugs in the basic medical insurance directory and 35 in the commercial insurance innovative drug directory, with 19 drugs approved in both [10][11]. - Notable rare disease drugs include those from Merck and other companies, which have gained attention for their potential market impact [11][12]. Market Trends - The introduction of the commercial insurance innovative drug directory is expected to enhance market access for several high-profile drugs, including CAR-T therapies that have previously struggled to gain approval [9][12]. - The performance of rare disease drug companies has seen significant stock price increases, indicating strong market interest and potential for growth [13].

Core Viewpoint - The National Healthcare Security Administration (NHSA) has officially announced the preliminary review results for the adjustment of the 2025 medical insurance and commercial insurance innovative drug catalog, indicating an increase in the number of drugs passing the review and the overall approval rate compared to previous years [1][2]. Summary by Relevant Sections Drug Review Changes - Six drugs underwent changes in their review status, with two drugs, injectable risperidone microspheres and injectable triptorelin, being disapproved, while injectable levodopa and calcium gluconate sodium injection were approved [1][5][6]. - The injectable risperidone microspheres, an exclusive product of Shengzhao Pharmaceuticals, was first launched in mainland China in February 2025 for treating mental disorders [6][7]. - The injectable triptorelin, also an exclusive product, was launched in 2023 for treating prostate cancer and precocious puberty [7]. Approval Statistics - A total of 718 applications were received for the 2025 catalog adjustment, involving 633 drug generic names, with 535 passing the preliminary review, resulting in an approval rate of 84.52% [1][2]. - The approval rates have shown a significant increase over the past three years, with 68.42% in 2023, 76.66% in 2024, and 84.52% in 2025 [2]. Innovative Drug Catalog - The commercial insurance innovative drug catalog was introduced for the first time, with 141 applications received, involving 141 drug generic names, and 121 passing the review [3]. - Among the drugs, 79 were submitted for both the basic medical insurance catalog and the commercial insurance innovative drug catalog [3]. Notable Products - Several notable products are highlighted, including CAR-T products that have previously failed to enter the medical insurance catalog but are now included in the commercial insurance innovative drug catalog [11][12]. - Unique products such as the first and only AKT inhibitor and the only Trop-2 ADC for breast cancer treatment are also included in the catalogs, indicating a focus on innovative therapies [13][14]. Rare Disease Medications - The review process has also included rare disease medications, with 37 drugs in the basic medical insurance catalog and 35 in the commercial insurance innovative drug catalog, of which 19 are approved in both [15][16]. - The approval of rare disease drugs is seen as a significant development, with companies like Beihai Kangcheng gaining attention for their innovative products [20].

Core Viewpoint - The annual adjustment of the national basic medical insurance (BMI) drug list has begun, with a significant increase in the number of drugs passing the preliminary review, indicating intensified competition for inclusion in the insurance coverage [3][5]. Summary by Sections Drug Approval and Competition - A total of 310 drug names passed the preliminary review this year, up from 249 in 2024, reflecting a growing number of innovative drugs approved [3][5]. - The number of first-class innovative drugs approved in China has shown a clear upward trend, with 48 approved in 2024, more than five times the number in 2018 [5]. Impact on Patients and Accessibility - The inclusion of innovative drugs in the BMI list significantly improves patient access, with over 70 anti-tumor drugs added from 2018 to 2024, addressing the issue of patients lacking available treatments [5][6]. - The pricing of new drugs is crucial for patient affordability, as high costs can limit access despite the availability of innovative treatments [7][8]. Pricing Negotiations and Challenges - The negotiation process for drug pricing involves expert evaluations and discussions with companies to establish mutually acceptable reimbursement standards [7][10]. - Balancing the need for affordable pricing with the necessity for companies to recoup R&D costs presents a significant challenge in the negotiation process [8][11]. Policy Directions and Innovation Support - The 2025 adjustment plan emphasizes maintaining fund security while encouraging innovation and optimizing the drug list structure [10][11]. - The focus is on supporting genuine innovation and ensuring that new drugs provide real clinical benefits, with a comprehensive evaluation of their value [10][12]. Real-World Data and Evaluation - The importance of real-world data in assessing drug effectiveness and safety is highlighted, as it provides insights beyond controlled clinical trials [14][15]. - The need for a robust drug value assessment system is increasingly urgent, as it informs decisions on funding and resource allocation [13][16].

Core Points - The annual adjustment of the national basic medical insurance catalog has begun, with the National Medical Insurance Administration announcing a list of drugs that have passed preliminary review, indicating increased competition for drug inclusion in the insurance catalog this year [1][3] - A total of 310 generic drugs passed the preliminary review, significantly up from 249 in 2024, reflecting a substantial increase in the number of innovative drugs approved [1][3] - The adjustment process involves expert evaluation, negotiation, and price consultation, with a focus on balancing drug pricing and patient accessibility [1][6] Group 1: Drug Approval and Inclusion - The National Medical Insurance Administration has been adjusting the drug catalog since its establishment in 2018, with 530 drugs added through negotiations, enhancing the accessibility of innovative drugs [3] - Over 70 anti-tumor drugs have entered the insurance catalog from 2018 to 2024, addressing the needs of patients with various cancers [3] - The approval of innovative drugs has surged, with 48 first-class innovative drugs approved in 2024, more than five times the number in 2018 [3] Group 2: Pricing and Negotiation - The negotiation process for drug pricing is crucial, as it determines the reimbursement standards and affects the financial viability of innovative drugs [6][7] - The challenge lies in finding a balance between drug pricing and patient accessibility, as high prices can limit patient access while low prices may hinder the return on investment for pharmaceutical companies [6][9] - The adjustment of the insurance catalog is seen as a way to optimize the use of limited medical resources and improve the efficiency of the insurance fund [4][6] Group 3: Innovation and Evaluation - The 2025 adjustment plan emphasizes supporting true innovation and optimizing the structure of the drug catalog while ensuring fund security [8][9] - The need for a comprehensive drug value assessment system is highlighted, focusing on real-world data to evaluate the effectiveness and safety of drugs post-approval [10][12] - The integration of health technology assessments (HTA) in drug pricing negotiations is noted as a practice that could enhance transparency and fairness in the process [13]

Core Insights - The competition for access to the national medical insurance (NMI) directory is expected to intensify this year, with a significant increase in the number of drugs passing the preliminary review [2][4]. Group 1: NMI Directory Adjustments - The annual adjustment of the national basic medical insurance directory has commenced, with 310 drug names passing the preliminary review, up from 249 in 2024, indicating a more competitive environment for drug access [2][4]. - Since the establishment of the National Medical Insurance Administration in 2018, there have been eight rounds of adjustments to the NMI drug directory, with 530 drugs added through negotiations, enhancing the accessibility of innovative drugs [4]. - The approval of innovative drugs has surged, with the number of first-class innovative drugs approved reaching 48 in 2024, over five times that of 2018, and nearly 40 approved in the first half of this year alone [4][5]. Group 2: Pricing and Negotiation - The negotiation process for drug pricing involves expert evaluations and discussions with companies to establish mutually acceptable reimbursement standards, referred to as "soul bargaining" [7]. - The pricing of newly approved drugs is often high due to substantial R&D investments, making affordability a critical factor for patients [7][8]. - The balance between low reimbursement prices, which may hinder innovation returns, and high prices, which could strain the insurance fund, is a significant challenge in the NMI directory adjustments [7][11]. Group 3: Innovation and Evaluation - The NMI adjustments emphasize supporting true innovation and optimizing the structure of the drug directory, with a focus on filling clinical gaps and encouraging differentiated innovations [9][10]. - The establishment of a comprehensive drug value assessment system is increasingly urgent, with a need for scientific methods to guide financial decisions in the NMI [12]. - Real-world data is crucial for evaluating the effectiveness and safety of drugs post-approval, and it is essential for adjusting reimbursement standards based on actual clinical outcomes [13][14].

Investment Rating - The report maintains a positive outlook on the pharmaceutical sector, particularly on innovative drugs and their internationalization process, while suggesting a focus on blood products and scientific instruments in the short term [4][18]. Core Insights - The pharmaceutical sector has shown stable stock performance, with significant approvals for innovative drugs such as the IL-21/IL-23 dual antibody by Kangfang Biopharma and the successful phase 3 clinical trial results for Eli Lilly's orforglipron [1][2][18]. - The report emphasizes the resilience and growth potential of the pharmaceutical sector amidst changing external tariff environments, highlighting low geopolitical risks for innovative drugs and opportunities for domestic replacements in blood products and medical devices [4][18]. - The report suggests a continuous focus on innovative and semi-innovative drug companies, as well as potential recovery in the performance of generic drugs, chain pharmacies, and traditional Chinese medicine post-Q1 reports [4][20]. Summary by Sections Pharmaceutical Sector - Kangfang Biopharma's IL-21/IL-23 dual antibody has been approved for moderate to severe plaque psoriasis, marking a significant milestone as the first domestic drug of its kind [19]. - The approval of AstraZeneca's capivasertib for second-line breast cancer treatment further highlights the growing number of innovative drugs being approved in China [23][25]. - The report anticipates a surge in licensing transactions as Chinese innovative drug assets mature, leading to more predictable performance for pharmaceutical companies [2][25]. Biological Products - Eli Lilly's orforglipron has successfully completed phase 3 clinical trials, demonstrating superior A1C reduction compared to placebo, which positions it as a leading oral GLP-1 receptor agonist [26][29]. - The report encourages monitoring the progress of domestic GLP-1 small molecules, which are showing promising clinical results [33][34]. Medical Devices - Domestic companies are making significant strides in innovative research and development, with products like the LiqMagic peripheral vascular shockwave treatment system gaining traction in clinical applications [35][36]. - The report notes that the innovative technology in vascular treatment is expected to enhance patient outcomes and reduce procedural risks [35][36]. Investment Recommendations - The report recommends focusing on innovative and semi-innovative drug companies such as Kelun-Biotech, Kangfang Biopharma, and Huadong Medicine, as well as blood products and scientific instruments for potential domestic replacements [5][20]. - It also suggests paying attention to the recovery of generic drugs, chain pharmacies, and traditional Chinese medicine as the market stabilizes post-Q1 [4][20].