Private Insurance Covered Just 7.7% of China's Novel Drug, Medical Device Costs in 2024(Yicai) Feb. 28 -- Commercial health insurance reimbursements only covered 7.7 percent of China's innovative drugs and medical devices market last year, with 49 percent coming from out-of-pocket payments and the rest covered by the national medical insurance fund.
Expanding commercial health insurance coverage is critical to boosting the adoption of innovative medical products, according to an annual white paper published by China Re Group, MediTrust Health, and Boston Consulting Group yesterday. Commercial health insurance must become a primary payer for such products alongside public insurance, it said.
China's innovative drugs and medical devices market topped CNY162 billion (USD22 billion) last year.
Commercial health insurance can leverage small premiums to provide large-scale coverage, offering greater payment certainty than charity or mutual aid models, according to the white paper.
China's insurance sector should prioritize building a standardized drug formulary system for commercial health insurance to achieve this, the paper said. The system should gradually expand to include all medicines approved by domestic and international regulators to meet policyholders' demand for branded and innovative drugs, it added.
The white paper also highlighted the need for a tiered formulary structure within commercial health insurance plans to address varying healthcare needs and payment preferences across different demographics.
China's commercial health insurance market will grow over the next decade despite challenges, according to the white paper. The country's innovative drug market is expected to exceed CNY1 trillion (USD137 billion) by 2035, accounting for 30 percent of the pharmaceutical market.
Commercial health insurance will likely cover 44 percent of payments for innovative drugs by 2035, while the share of the national medical insurance fund and out-of-pocket payments will shrink to 36 percent and 20 percent, respectively.
China's commercial health insurance premiums reached CNY977.3 billion (USD134 billion) last year, according to the National Financial Regulatory Administration.
Editor: Martin Kadiev
