Dual Catalog Mechanism Launched: Collaborative Governance to Support the High-Quality Development of Innovative Drugs

At this critical historical juncture where the Healthy China strategy is advancing in depth and the medical security system is undergoing systemic reform, the National Healthcare Security Administration (NHSA) and the National Health Commission (NHC) have jointly issued Several Measures to Support the High-Quality Development of Innovative Drugs. On July 1, 2025, the official launch of the Commercial Insurance Catalog for Innovative Medicines was announced, alongside a supporting policy system introduced simultaneously covering dimensions such as strengthening R&D support for innovative drugs, facilitating their inclusion in the basic medical insurance catalog and the Commercial Insurance Catalog for Innovative Medicines, supporting their clinical application, enhancing the multi-dimensional payment capacity for innovative drugs, and consolidating safeguard measures. This has opened up the "last mile" for the entire industrial chain of innovative drugs, from laboratory R&D to clinical payment. This reform is by no means a simple iteration of a single policy tool; it represents a landmark breakthrough in China's multi-tiered medical security system moving from "institutional framework construction" to "in-depth functional integration". It further signals a fundamental logical upgrade of the medical security system from "ensuring basic survival" to "protecting health value", exploring a Chinese solution that balances equity and efficiency in addressing the global challenge of access to innovative drugs.

Looking back at the reform context, although China's basic medical insurance has achieved coverage for over 95% of the population, the tension between the institutional positioning of "ensuring basic needs" and the diverse health demands of the people has become increasingly prominent amid the dual challenges of accelerated population aging and medical technological innovation. The launch of the Commercial Insurance Catalog for Innovative Medicines is a systemic response to this dilemma. Unlike the fragmented and short-term protection model of traditional commercial health insurance, this reform has essentially integrated commercial health insurance into the overall framework of China's national multi-tiered medical security system through institutional design. Under the strategic guidance of Healthy China 2030 which prioritizes health as the core, this transformation means that through the innovation of the payment system for innovative drugs, groundbreaking clinically valuable innovative achievements such as cell therapy and gene-editing drugs can benefit more patients at an affordable cost.

From an international perspective, the "dual catalog" approach explored by China features distinct institutional innovation. In contrast to the unequal protection caused by the fully market-oriented commercial insurance in the United States and the unsustainable government fiscal pressure under the European welfare state system, China organically combines government guidance with market mechanisms. It leverages the flexibility of commercial insurance to respond rapidly to the payment demands for innovative drugs, while relying on the fundamental role of basic medical insurance to uphold the bottom line of equity. This idea of incorporating the protection of innovative drugs into a multi-tiered institutional design aligns with the World Health Organization's view that "combining social insurance with commercial health insurance is the optimal solution to ensure the equitable satisfaction of clinical needs", providing unique Chinese wisdom for global medical security reform.

Breaking down data silos is an important prerequisite for utilizing medical insurance data to support innovative drug R&D, encouraging commercial health insurance to expand investment in innovative drugs, strengthening policy guidance on catalog access, and advancing innovative drug R&D in a coordinated manner. Since its establishment, the NHSA has built a national medical insurance information platform with massive and rich data resources. To better utilize these data, the document proposes beneficial explorations on the one hand, such as developing data products adapted to the needs of innovative drug R&D, and on the other hand, offers cooperation support in aspects like data sharing and settlement clearing to qualified commercial health insurance companies.

Local pilot programs have already verified the value of data interconnection. Shanghai has implemented the "one-stop instant claim settlement for medical insurance + commercial insurance" in 12 top-tier Grade A hospitals. By real-time capturing medical insurance settlement data, commercial insurance companies have shortened the claim settlement cycle from 7 working days to 30 minutes. An insurance product for a lung cancer targeted drug has even launched medication reminder services through data analysis, leading to an improvement in patient survival rates. Guangzhou Suixin Insurance has achieved full-process data connection with 22 hospitals; when insured persons use drugs included in the commercial insurance catalog, the system automatically identifies the protection liabilities, and the settlement of both medical insurance and commercial insurance is completed simultaneously upon discharge, effectively reducing the out-of-pocket ratio for patients using high-value drugs. Many regions are also attempting to extend simple insurance compensation into an ecological closed loop of "protection + services". This transformation from "post-event compensation" to "full-process services" has truly realized the goal of "accessible, claimable and well-managed" protection for innovative drugs.

Under the framework of basic medical insurance providing the fundamental guarantee and commercial insurance expanding coverage, commercial insurance companies are encouraged to provide stable long-term investment for innovative drug R&D through various means such as innovative drug investment funds, fostering patient capital to support innovative drugs. The dual catalog mechanism has formed a clear division of labor: the basic medical insurance catalog covers clinically essential basic drugs, while the Commercial Insurance Catalog for Innovative Medicines focuses on including high-value drugs with significant clinical value that are not covered by basic medical insurance. This separate management does not operate in isolation; instead, it optimizes the enterprise reception mechanism of medical insurance departments through an "open-door" approach to medical insurance management, smooths the communication channels between medical insurance departments and innovative drug enterprises, and strengthens more targeted policy guidance on the catalog access of innovative drugs.

For these innovative drugs temporarily not covered by basic medical insurance, a gradient access closed loop of "commercial insurance first, then medical insurance" can be formed – new drugs are first included in the commercial insurance catalog to accumulate real-world data after their launch, and then considered for inclusion in the basic medical insurance catalog through medical insurance negotiations when sufficient evidence of their clinical value is obtained. This three-dimensional protection network model of "commercial insurance for exploration, medical insurance for succession" not only solves the problem of initial drug access for patients but also provides a scientific basis for medical insurance negotiations.

By adding the Commercial Insurance Catalog for Innovative Medicines, which focuses on including highly innovative drugs with significant clinical value and notable benefits to patients that go beyond the scope of basic medical insurance, the reform promotes its reference and application in the multi-tiered medical security system including commercial health insurance and medical mutual assistance. For innovative drugs included in both the basic medical insurance catalog and the Commercial Insurance Catalog for Innovative Medicines, in accordance with the requirement of "efficiently delivering services", provincial centralized procurement institutions may implement measures such as direct online listing for eligible drugs to improve the efficiency of the whole service process. The settlement prices of drugs in the Commercial Insurance Catalog for Innovative Medicines are reasonably determined through negotiation, and a more stringent price confidentiality mechanism is explored, laying a solid foundation for the integration of innovative drugs into the global medical insurance payment system as they "go global". In response to the potential impact of high-value innovative drugs on hospital operations, it is clearly stipulated that drugs in the Commercial Insurance Catalog for Innovative Medicines are not included in the scope of basic medical insurance out-of-pocket ratio indicators and the monitoring of alternative varieties selected in centralized procurement. The implementation of separate pricing and separate settlement has established an institutional arrangement for doctors to shift from "daring not to prescribe" to "making rational recommendations".

At the same time, medical insurance departments will continue to promote the collaborative linkage between the supply and demand sides, and constantly optimize the drug supply mechanism and fund settlement process. By improving the dual-channel management mechanism, the simultaneous provision of innovative drugs by medical institutions and designated retail pharmacies is strengthened, ensuring that patients can conveniently obtain the required drugs through different channels. For drugs that are not timely provided or whose supply cannot be guaranteed in accordance with regulations, medical insurance departments will initiate the procedure of removing them from the medical insurance catalog in accordance with the law, and dynamically adjust and optimize the basic medical insurance drug catalog to ensure drug accessibility. Relying on the accelerated construction and promotion of the Medical Insurance Pharmaceutical Cloud Platform, medical institutions and patients will have access to more convenient and efficient information services, with more timely responses to drug demand and more accurate supply-demand matching, significantly improving the overall medication experience and management efficiency. In terms of payment, the settlement efficiency is improved and the financial pressure on medical institutions is alleviated through the coordinated advancement of the medical insurance fund prepayment policy and the real-time settlement mechanism. Medical institutions should also strictly perform the contracts signed with pharmaceutical enterprises to ensure the timely settlement of drug payments and stabilize the operation of the pharmaceutical supply chain.

The above-mentioned policy "combination punches" and the innovative reform of the commercial health insurance system promote each other, jointly building a multi-tiered medical security system with broader coverage, more flexible mechanisms and better services, and opening up the "last mile" for the general public, especially patients with serious diseases, to access high-quality innovative drugs.

Faced with evolving public health challenges and medical security demands, medical insurance departments have built a more flexible and efficient emergency response system, strengthening the protection capacity for innovative drugs in public health emergencies. For innovative drugs that are clinically urgently needed and used to respond to special situations such as major epidemics and infectious diseases, medical insurance departments may jointly explore feasible paths for their temporary inclusion in the medical insurance payment scope with relevant departments, ensuring drug accessibility and payment sustainability in special periods, and providing strong support for the public health system.

Against the backdrop of the booming development of China's innovative drugs, relying on China's huge production capacity advantages, super-large market and increasingly mature R&D system, the issuance of this document strongly supports the promotion of the achievements and experience of China's innovative drugs in international exchanges and cooperation. Regions with conditions are encouraged to explore the construction of a global innovative drug trading platform for Southeast Asia, Central Asia and other co-construction countries of the Belt and Road Initiative, creating a new regional mechanism for pharmaceutical circulation and payment services. Enterprises are supported to go global by leveraging the advantages of Hong Kong and Macao. At the same time, high-quality innovative drugs are continuously encouraged to enter the Chinese market, providing insured persons with more abundant and high-quality treatment options, and promoting the formation of a more open, inclusive and mutually beneficial pharmaceutical cooperation pattern.

In summary, the significance of this reform goes far beyond a simple drug list – it is an institutional commitment to the in-depth integration of the payment system and industrial policies, and also drives the transformation of collaborative governance between the government and the market in the field of medical security from strategy to practice.