5 Key Chinese Policies Shaping the Pharmaceutical Industry in 2024

The pharmaceutical industry is poised for significant changes in 2024 as several key policies come into effect. These policies will have a profound impact on various aspects of the industry, including drug pricing, procurement, and regulatory frameworks. In this article, we will explore the five major policies that are set to shape the pharmaceutical landscape in the year ahead.

1. Revision of the Essential Drug List:

According to the "National Essential Medicines List Management Measures," the national essential drug list undergoes periodic evaluations and adjustments, with a maximum review cycle of three years. The 2018 version of the list, consisting of 685 drugs, has exceeded its intended service duration by two years. The upcoming revision will likely focus on expanding the list to include more pediatric and ethnic medicines. Additionally, a higher proportion of chemically synthesized drugs, which have undergone multiple centralized procurement rounds, may be included. This adjustment could have significant implications for generic drugs and traditional Chinese medicine that are not part of the essential drug list or centralized procurement.

2. National Procurement of Traditional Chinese Medicine:

The regional alliance for the procurement of traditional Chinese medicine, led by Hubei province, is set to evolve into a nationwide initiative. The procurement process, which takes place once a year, will commence its third phase in May. The previous rounds of procurement emphasized price reductions for locally produced products and competition based on daily treatment costs.

3. National Procurement of Chemical Drugs and Biologics:

In 2024, the tenth round of national procurement for chemical drugs is expected to take place. The latter half of the year may witness the initiation of the eleventh round, focusing on either chemical drugs or biologics. As centralized procurement becomes the norm, several pharmaceutical manufacturers have shifted their business models to prioritize formulation sales and raw material supply.

4. Annual Negotiations for National Medical Insurance Coverage:

The annual negotiations for medical insurance coverage remain a key factor in determining the market access of pharmaceutical products. This year, the suspense lies in the inclusion of products that have not been successful in previous negotiations but still qualify for application. The success of these negotiations is influenced by factors such as the economic evaluation of drugs conducted by the medical insurance authorities.

5. Combating Corruption in the Healthcare Sector:

Since May 10, 2023, the Chinese government has intensified efforts to combat corruption in the healthcare sector. Various departments have emphasized the investigation and punishment of corrupt practices, and reporting and investigation are becoming the norm. In 2024, the focus on anti-corruption measures will likely continue, with a strong emphasis on investigating cases involving bribery in the pharmaceutical industry.

As the healthcare industry strives to implement Diagnosis Related Groups (DRG) and the Drug Implementation Plan (DIP) to ensure the safety of medical insurance funds, the year 2024 will witness the accelerated implementation of various healthcare reforms. Pharmaceutical professionals must adapt to these changes, ensuring compliance and professionalism in sales practices. The upcoming policies discussed in this article will undoubtedly shape the pharmaceutical industry landscape and pave the way for a more robust and regulated sector.