Perspectives on 2020 National Reimbursement Drug List (NRDL) Negotiation in China

Shanlian Hu, MD, MSc, Professor, School of Public Health, Fudan University, Shanghai, China

In September 2020, the National Healthcare Security Administration (NHSA) released the “2020 Work plan for the adjustment of the National Reimbursement Drug List (NRDL)”. The adjustment of medicine items can be divided into regular access and negotiation access processes. If the price of a new drug is comparable to or lower than that of the existing drugs in the 2019 NRDL, it may be included in the 2020 NRDL by conventional means. Patented medicines with higher prices or greater impact on the Health Insurance Fund will be included through negotiation.

The process of price negotiation will be finished at the end of 2020. The timetable of the working process is shown below.

So far, there have been three rounds of negotiations on China’s national drug price negotiation, in 2017, 2018 and 2019, respectively. In 2019, for example, of the 97 drugs successfully negotiated, 70 new drugs had price reductions by an average of 60.7 per cent, while the 27 drugs subjected to a renewal pricing agreement had reductions of 26.4 per cent. The drug price negotiations in 2020 will include innovative drugs and urgently needed imported drugs approved by the Chinese Food and Drug Association (CFDA), which will be incorporated into local reimbursement drug lists for provinces and municipalities. A total of 751 drugs will be declared in the 2020 NDRL.

The total number of drugs undergoing price negotiation in China in 2020

Grouping Criteria of Eligible MedicinesNumber of Chemical & Biological MedicinesNumber of Chinese Traditional medicinesTotal
Guidelines of COVID-19 required (7th version)11112
2018 national essential medicine list8311
Urgent Imported drugs issued by CFDA28028
The second batch of pooled procurements303
Marketed innovative medicines15417171
Significantly changing drug indications9110
Included in more than five provincial reimbursement drug lists238255493
Required to define payment standard in agreement15015
Required to change the indications in agreement718
Total473278751

Within the totals, 66% percent of the medicines declared were already in local reimbursement drug lists that had been adopted in more than five provinces, and 10% were newly marketed Traditional Chinese medicines (TCM). The final quantity of innovative drugs eligible for price negotiation is pending on companies’ submissions and final review. In 2019, the National Medical Products Administration (NMPA) approved 53 new drugs including 39 (73.6%) imported drugs, with 58 drugs failing the negotiation process and not being listed. There were also many drug applications seeking extensions of indications (including first-, second-, and third-line drugs) and applications for high-value orphan drugs for rare diseases.

Some types of innovative drugs applying for negotiation include anti-tumor, anti-infection and diabetes drugs, which constitute a majority of the volume. There are also common drugs for respiratory, gastrointestinal and nervous system diseases. It is worth noting that there are also drugs for autoimmune diseases with unmet medical need, such as psoriasis, lupus erythematosus, rheumatoid arthritis, among others. Some drugs for ultra-rare diseases, such as elosulfase alfa (Morquio syndrome IV type), Nusinersen (spinal muscular atrophy) and agalsidase beta (Fabry Disease) have submission dossiers under review by the NHSA.

Difficulties facing China’s authorities in price negotiation for innovative drugs include: (1) how to set the price for drugs with multiple indications; (2) how to use international reference price information in evaluation; (3) how to determine the Chinese threshold of cost-effectiveness analysis in pharmacoeconomic evaluation; (4) formulation of price reduction ratio if actual sales surpass budget impact analysis estimates; and (5) difficulties in implementing price-confidential agreements, price-volume agreements and risk-sharing agreements.

China used to designate the QALY threshold between 1-3 GDP per capita. If the threshold is less than 1 GDP per capita, the new drug will be considered very cost-effective. If the threshold is between 1-3 GDP per capita, it will be recognized as cost-effective. And if it is higher than 3 GDP per capita, the new drug is not cost-effective. But after comparing QALY thresholds in different countries, it was apparent most developed countries’ QALY thresholds are less than 1 GDP per capita. Therefore in 2019, the China pharmacoeconomics expert group recommended 1-1.5 GDP per capita as a reference threshold. In Chinese currency, 200,000 RMB per QALY is roughly equal to 3 GDP per capita and was used as a ceiling price for negotiation.

China did not include any performance-based risk sharing arrangements in 2019 price negotiations, including coverage with Evidence Development (CED), performance-based RSA or financial-based RSA. It is hoped that some of these schemes could be used in the 2020 price negotiation.

Conclusions

  1. A new round of price negotiations for innovative drugs is going to start in 2020. How to establish a more scientific, standardized, objective and fair pharmacoeconomic evaluation method requires further exploration.
  2. Improving the accessibility and affordability of new drugs for Chinese patients and addressing the unmet needs will have a profound impact. Price negotiation is a key condition for innovative drugs to have NRDL access.
  3. To truly support patients’ accessibility, the coordination and implementation of multiple processes across a comprehensive policy is still required.