Announcement of the adjustment of the Disease-Based Payment 3.0 plan. What impact does this have on the pharmaceutical industry?

Everyday Economic News Reporter | Zhang Hong
Editor | Zhang Yiming

On March 20, the National Healthcare Security Administration announced the adjustments to Version 3.0 of the Diagnosis-Related Group (DRG) payment grouping plan.

In July 2024, the National Healthcare Security Administration issued Version 2.0 of the DRG grouping plan, which refined and optimized the 1.0 version released in 2020. In August 2025, the administration formulated the “Interim Measures for the Management of Medical Insurance Payment by Diagnosis,” clarifying that the grouping plan will generally be adjusted every two years.

The Daily Economic News (hereinafter referred to as “the reporter”) notes that this adjustment merges or splits some disease groups, while also considering medical development and the application of new technologies. To accommodate the widespread use of robot-assisted orthopedic surgeries, a new dedicated code “17.4100 Open Robotic Assistance Operation” has been added to the disease groups under review. Special focus has been placed on groups with high clinical demand, such as “M17 Knee Joint Disease,” “S32 Lumbar Spine and Pelvic Fractures,” and “S72.0 Femoral Neck Fracture.”

According to the latest news from the National Healthcare Security Administration, Version 3.0 of the DRG grouping plan is expected to be released this July and is planned to be officially implemented in January 2027.

What impact will this have on the industry?

Which adjustments are worth noting? How will this affect the pharmaceutical industry?

Senior healthcare security expert Tian Haoling told the reporter that the underlying logic of the DRG 3.0 adjustment remains unchanged. The more detailed grouping—such as by disease type, treatment method, and severity—maximizes the benefits for all major stakeholders involved in healthcare payment, allowing the fund’s efficiency to be fully realized. The two-year cycle for grouping adjustments and iterative upgrades of the grouping versions not only promote rapid policy implementation but also reflect a precise, dynamic adjustment of the value of medical technologies.

She believes there are several key directions worth attention in this disease group adjustment.

First, more refined surgical groupings will drive innovation in high-value consumables and surgical techniques.

Separately grouping bilateral/unilateral or combined surgeries (such as bilateral knee replacements or combined liver-pancreas resections) prevents high-resource-consuming cases from being lumped together with ordinary cases. This means high-value consumable companies need to develop products better suited for complex surgical scenarios, such as specialized prostheses for bilateral joint replacements. Hospitals will prefer cost-effective consumables, shifting industry focus from “price competition” to “value competition.” The value of advanced technologies like surgical robots will be recognized more accurately, providing related companies with greater market opportunities.

Second, integrating full-course management into grouping opens new opportunities for innovative drugs and outpatient markets.

Including the entire pathway for malignant tumors—such as radiotherapy, chemotherapy, targeted therapy, and immunotherapy—allows the value of innovative drugs to extend from inpatient use to full-course management, facilitating the promotion of anti-tumor medications. This can be achieved through dual-channel outpatient pharmacies providing in-depth services to insured patients with needs.

Third, subdividing disease weights based on different populations—children, chronic disease patients, the elderly, rare diseases, and severe cases—while also refining groups for critical and severe cases. This will stimulate R&D enthusiasm among related pharmaceutical companies and better focus on product value.

Exploring the Integration of DRG and DIP

Gong Zhi-Zhen, head of the DIP technical guidance team, explained that DIP (Diagnosis-Related Group International Payment) is a method of hospital inpatient cost settlement based on regional point systems and DRG value-based payment. It leverages big data to establish a healthcare payment management system, including regional total budgets, disease groupings, payment standards, cost settlement, and supervision. It has significant features and advantages in terms of theoretical framework and grouping strategies, representing an original Chinese healthcare payment model with distinctive characteristics of the era.

This adjustment is based on recent real settlement list data, maintaining the basic rule of “main diagnosis + main procedure (+ related surgery)”—which accounts for about 80% of disease groups—automatically clustering these into groups. Meanwhile, the grouping process is optimized, following the overall principle of “coarse when coarse, fine when fine,” exploring the integration of DRG (Diagnosis-Related Group) and DIP, including practices like exclusion lists and preliminary grouping from DRG, to refine grouping rules through merging, splitting, and auxiliary factors.

“Coarse when coarse” means merging related procedures and diagnoses into groups; “fine when fine” involves more detailed grouping based on clinical practice, or incorporating individual characteristics as auxiliary factors. Specifically, this includes four aspects:

1. Procedure merging: combining related surgeries performed during the same hospitalization that meet clinical standards, or similar diseases with comparable resource consumption.
2. Diagnosis merging: combining diagnoses with similar procedures, resource use, or resource consumption.
3. Diagnosis splitting: for diseases with significant resource use differences due to severity, precise splitting improves grouping granularity and fit.
4. Grouping by auxiliary factors: for some diseases, the primary diagnosis may not fully reflect resource consumption; grouping based on other diagnoses or factors like age, complications, or severity.

Tian Haoling pointed out that the implementation of DRG 3.0 will promote hospitals toward lean operations—through precise clinical pathway management, disease cost accounting, and medical record data quality control—reshaping a performance system that prioritizes quality and controllable costs. For pharmaceutical companies, this will mark the end of the “price war” era—innovative drugs will need to demonstrate clinical value through real-world data, and gain market access via dynamic negotiations, special agreements, and insurance catalog pathways. Mature drugs should focus on advantageous disease groups and collaborate with clinicians to optimize product structures. Ultimately, patients will benefit from transparent medical costs and balanced resource allocation, ensuring sustainable healthcare funds, improving hospital efficiency, and encouraging innovation in the pharmaceutical industry to maximize win-win outcomes for healthcare, medicine, and patients.

Cover image source: Everyday Economic News Media Library