Table 1

Summary of drug reforms in China

WHO frameworkMajor initiatives between 2009 and 2020Policy goals/expected outcomeImplementation progress
1. Effective regulationLaws and regulations
  • 2019: amend the National Law of Pharmaceutical Products Management

  • 2020: announce Regulation of Drug Manufacture and Management Plan for Drug Registration

Institutional reforms
  • 2018: establish the National Medical Products Administration (NMPA) to manage the production and distribution of drugs

  • 2018: establish the National Healthcare Security Administration (NHSA) to collectively manage the social health insurance schemes and their related decisions such as insurance listing, reimbursable price and procurement of drugs

  • 2018: reform the National Health Commission (NHC) to manage the clinical use of drugs

Update the laws to legalise the drug reforms
Streamline institutional settings; new agencies execute clearly defined and distinguished roles as production and distribution (NMPA), pricing and procurement (NHSA) and use (NHC)
Fully implemented
2. Quality productsMarketing authorisation holder (MAH) system
  • Piloted in 2016 and fully scaled up in 2019: implement the MAH system that MAH takes full responsibility for the regulation of R&D, clinical trials (CTs), manufacturing, sales and distribution, and reporting adverse events

Full life-cycle supervision by NMPA
  • 2019: establish a national CT registration platform to improve the transparency of CTs and mobilise hospitals to conduct CTs

  • 2019: NMPA monitors the manufacturing process and distribution

Bioequivalence assessment (BA)
  • 2018: drugs passing BA receive prioritised consideration in procurement led by NHSA

While mobilising stakeholders such as MAH, hospitals and manufacturers, NMPA holds accountable for monitoring the quality of drugs at full life cycle
Introduce BA to improve the quality of generic drugs
By the end of 2019, 123 generic names (323 brand names) passed BA.126
3. Needs-driven innovationAccelerated market approval (AMA)
  • 2013: introduce AMA on innovative pharmaceutical products with patents or addressing clinical need

  • 2016: expand AMA to breakthrough drugs, drugs for HIV/AIDS, cancer, major infectious diseases, paediatrics and rare disease

  • 2018: issue Rare Disease List to encourage the R&D of orphan drugs

Insurance listing (selection of National Reimbursable Drug List, NRDL)
  • 2016: apply pharmacoeconomic evaluation evidence in the selection of NRDL to consider both the cost and effect of innovative drugs

Use AMA and insurance listing as policy levers to encourage needs-based innovation
AMA also improves the efficiency of market approval and access to new drugs
Between 2016 and 2017, 423 pharmaceutical products got AMA. About 64.8% applications addressed critical patient needs.93
8 out of 12 domestic innovative drugs listed by NRDL in 2019.127
4. Intellectual propertyData protection for innovative drugs
  • 2018: innovative drugs can enjoy maximally 6 years of data protection period during which no similar generic drug(s) will be reviewed or approved

Compulsory licensing
  • 2018: introduce compulsory licensing mechanism to force deprivation of a patent (thereby allowing the production of generics) during infectious disease epidemic emergencies or to address major public health threats

Provide data protection period to encourage innovation
Issue compulsory licensing policy to prepare for public health emergency
Compulsory licensing hasn’t been applied to any product yet
5. Evidence-based selectionNational Essential Medicine Policy (NEMP)
  • 2009: 1st NEML included 307 drugs selected by expert committee, implemented at government-owned primary healthcare centres (PHCs) between 2009 and 2012

  • 2012: 2nd NEML included 502 drugs, implemented at all PHCs

  • 2014: NEMP at public township hospitals (rural) and public hospitals (urban)

  • 2018: 3rd NEML included 685 drugs, implemented at all public hospitals

  • 2009: pharmacoeconomic evidence was recommended for high-priced drugs

  • 2016: pharmacoeconomic evidence should be used to compare similar lower-priced and high-priced effective drugs addressing critical clinical needs

  • 2019: NHSA initiated a standard process of reviewing pharmacoeconomic evidence

Through phased scale-up strategy, the NEMP attempted to improve the equitable access to essential medicines; NEML has been revised to address clinical needs
Pharmacoeconomic evidence received increasing attention in assisting the selection of NRDL to assess cost and effectiveness at the same time
In 2018, 17 anticancer drugs were added to the NRDL128; in 2019, 70 additional drugs have been selected for NRDL.129
6. Financing and pricing policiesZero mark-up and compensation reform
  • 2009: PHCs using NEML claimed zero mark-up drug prices and received special government subsidy for reduced drug profit

  • 2015: all county public hospitals and city public hospitals in pilot sites

  • 2017: zero mark-up on consumable medical supplies

  • End of 2017: all public hospitals

Pricing reform
  • Before 2015: retail price ceiling

  • 2015: classified pricing strategies

    • Essential medicines and other commonly used drugs: provincial bulk bidding and procurement

    • Patent drugs and drugs provided by a single manufacturer only: NHSA decides whether to list on NRDL (upon negotiation on price) and reimbursable price for drugs listed on NRDL

    • Basic injections and commonly used low-cost drugs, and low clinical usage gynaecological, paediatric, emergency drugs: direct online procurement

    • Clinically necessary drugs with low usage or drugs with a high risk of being in short supply: national bulk bidding for designated manufacturers and price negotiation

    • Anaesthetics and psychotropic drugs, free drugs for infectious or parasitic diseases, vaccines for National Immunization Plan, family planning drugs and traditional Chinese medicine: price ceiling management and national procurement

To remove perverse revenue incentives from prescribing and to establish a sustainable, multichannel financing mechanism
Apply a different pricing strategy to fully engage the market and to guide the price of medicines, and to better interact with procurement and insurance policies
The price of 45% of essential medicines decreased by an average of 12% in 2009.98
The new listed drugs on the NRDL through price negotiation achieved an average price decrease of 44% in 2017. 17 anticancer drugs were added to the NRDL in 2018 and a 57% price reduction was achieved on average. In 2019, 70 additional new drugs were listed through price negotiation, resulting in a 61% price drop, and 27 listed drugs successfully renewed their listing, with an overall 26% reduction in price.130
7. Procurement and supplyBulk procurement
  • 2009: a provincial bulk bidding and procurement platform for national essential medicines; bidding was conducted based on quality and price by the provincial government

  • 2015, 2016 and 2018: Shanghai piloted three rounds of bulk procurement

  • 2019: 11 cities piloted the bulk procurement policy

  • 2019 Sep: scale up to 25 provinces

Shortage management
  • 2011: database to track NEML with shortage risk

  • 2012: nominate manufacturers to produce essential medicines with shortage risk

  • 2014: the bulk bidding and procurement policy was extended to all drugs with shortage risk in all government-owned county or higher-level hospitals

  • 2016: designated manufacturers for clinically necessary drugs and those with limited supply in all government-owned PHCs and public hospitals

  • 2017: drugs in limited supply and urgent clinical demand are entitled to AMA

  • 2018: to further improve the availability of drugs, since 2018, negotiation with pharmaceutical companies has been included within the process of adjusting the NRDL for insurance

Dual invoicing
  • 2016: dual invoicing was required in bulk procurement for all public hospitals located in over 200 pilot cities. Each drug can have no more than two wholesalers and two invoices—one from manufacturer, and another from wholesaler—that need to be submitted at the bulk procurement platform for regulation

  • 2018: dual invoicing has been rolled out across the country

Through information transparency, bid on price and quality, and bulk procurement to reduce drug prices
Track shortage information to guide procurement and storage decisions
Use AMA, manufacture designation and NRDL listing as policy levers to ensure supply
To reduce the mark-ups of wholesalers and ultimately, reduce drug prices
By 30 May 2022, 234 drugs have been ordered through the national bulk procurement, with 53% price reduction on average.131 Over 20 bulk procurement alliances, mostly cross-provinces, have been formed.132 133
By the end of 2022, each province would cover 350 drugs on average through bulk procurement platform at national or subnational level.134
8. Quality and appropriate useAdministration of antibiotics and non-therapeutic drugs
  • 2012: apply guideline on the administration of antibacterial drugs

  • 2018: implement classified management of antibacterial drugs for physicians in different levels of hospitals

  • 2018: evaluate rational use of medicine as a key performance indicator for assessing hospital leaders

  • 2019: all hospitals including those in the private sector are subject to assessment of their (ir)rational use of medicine

  • 2019: issue monitoring catalogue for drugs of high price and high volume, or non-therapeutic auxiliary drugs; special management regimes for glucocorticoid drugs, narcotic drugs, psychotropic drugs, antibacterial drugs, and Chinese herbal medicines and other drugs

  • 2016: provide annual training on rational use of antibiotics to physicians and pharmacists

  • 2016: all retail pharmacies may only sell antibiotics to customers with prescriptions

Improve rational use of medicineNo specific information available
9. Data, monitoring and evaluationOnline platforms
  • Registration of clinical trials

  • Monitoring of drug use

  • Adverse drug reactions

  • 2015: multiple policies have been announced to promote the traceability of medical product

  • 2020: vaccine accomplished this milestone by March 2020 and drugs selected in the bulk procurement will be the next to follow

Trackable information to inform decisionsNo specific information available
  • NEML, National Essential Medicines List; R&D, research and development.