Multinational pharmaceutical companies advise on building a payment system: How can commercial insurance take the lead in the development of innovative drugs?

How can commercial health insurance enhance the accessibility of innovative drugs?

21st Century Business Herald Reporter Ji Yuanyuan

In the first year of the 14th Five-Year Plan, the biopharmaceutical industry has welcomed an unprecedented strategic positioning. This year, the government work report of the Two Sessions for the first time listed biopharmaceuticals alongside artificial intelligence and new energy, elevating it to one of the six major emerging pillar industries in the country. This leap in top-level design signifies that biopharmaceuticals are no longer just a strategic industry related to national economy and people’s livelihoods, but are also expected to drive high-quality economic development.

However, the transition from a “strategic industry” to a “pillar industry” is not a simple policy upgrade; it is a comprehensive test of the industry’s ecosystem. As the R&D of innovative drugs enters the stage of delivering results, industry development is shifting from breakthroughs on the supply side of “whether it can be developed” to the demand side of “whether it can be applied at scale.” At this turning point, the bottleneck effect of the payment system is becoming increasingly prominent—without matching payment infrastructure, even the most cutting-edge innovative drugs cannot be transformed into a real industrial scale.

Recently, at the 2026 China Development Forum, Zhao Peng, president of China People’s Insurance Group Co., Ltd., stated that the goal of a Healthy China is for everyone to be healthy, and that ensuring people can afford medical care is the prerequisite and foundation for achieving this goal. As a market-oriented system within a multi-tiered medical security framework, commercial health insurance can enhance overall protection efficiency and reduce the medical burden on the populace.

“Commercial health insurance can expand the proportion and scope of coverage based on basic medical insurance. After increasing health insurance, the comprehensive reimbursement ratio can reach 75% to 90%, thereby alleviating the medical burden on the populace,” Zhao Peng said. As the economy develops and society progresses, the demand for health protection among the populace increases, and the status and role of commercial health insurance become increasingly important.

Connecting the payment system has become a crucial hub linking innovative supply with patient demand, marking a key leap for biopharmaceuticals towards becoming a pillar industry.

The Industry Inflection Point Has Arrived

Over the past decade, the story of multinational pharmaceutical companies in China has revolved around R&D and production: building factories, conducting clinical trials, and bringing global new drugs to Chinese patients faster. China’s innovative drug industry has also made a leap from “catching up” to “running alongside” and even leading in some fields. During the 14th Five-Year Plan period, the number of new drugs under research in China accounted for more than 20% of the global total, ranking second globally in new drug R&D.

But the flip side of the coin is that innovative drugs face challenges in the “last mile” of accessibility. Ding Lieming, a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and chairman of Betta Pharmaceuticals, candidly stated during a recent special investigation by the National Committee of the CPPCC that, “With strong support for major new drug creation and related institutional reforms, China’s pharmaceutical innovation has made significant progress, with a substantial increase in both the quantity and quality of approved innovative drugs, which is gratifying. However, there are still numerous obstacles to the development of the biopharmaceutical industry.”

Ding Lieming indicated that the most common issue reported by companies is that the process for innovative drugs to enter clinical application is not smooth in the “last mile,” which greatly affects the sustainable development and breakthroughs of innovative drug companies. There needs to be a stronger top-level design to better empower the sustainable development of innovative drugs with policies.

This predicament is corroborated by data: In 2025, the National Healthcare Security Administration received a total of 718 submissions for the basic medical insurance catalog, involving 633 drug generic names. Ultimately, 535 passed formal review, including 311 out-of-catalog drugs; during the expert review phase, over half of the drugs were filtered out, and finally, 129 drugs were approved (including 2 directly transferred), with an approval rate of 41.48%, tightening compared to 70% and 60% in the previous two years.

Additionally, the first version of the commercial insurance innovative drug catalog received 141 submissions, involving 141 drug generic names, with 121 passing formal review and only 24 drugs participating in price negotiations for the commercial insurance innovative drug catalog. The numerical changes from 141 to 121, and from 24 to the final 19, reveal the difficulties in establishing the first version of the commercial insurance innovative drug catalog.

Among the 19 drugs included in the commercial insurance innovative drug catalog, 17 are injectables, which require administration by professional healthcare personnel in hospitals. However, in practice, some hospitals refuse to allow patients to purchase injectables externally for administration in the hospital based on their own management standards. This makes hospital provisioning a critical link for the successful implementation of commercial insurance innovative drugs, which also becomes the primary bottleneck for the release of policy dividends.

Sun Jie, vice dean and professor at the School of Insurance of the University of International Business and Economics, analyzes that on one hand, public hospitals still face rigid constraints in performance monitoring, such as average cost per case. Clinical doctors worry that prescribing commercial insurance innovative drugs will inflate departmental cost assessment data, while hospital managers fear it may affect hospital performance evaluation results. On the other hand, commercial insurance innovative drugs are often high-value products, and their use involves drug storage, prescription issuance, pharmaceutical services, and medication monitoring. The current medical service pricing system lacks corresponding pharmaceutical service fee items, leading to a lack of compensation mechanisms for hospital pharmacy departments when providing additional services. These issues restrict the full release of the policy dividends from the commercial insurance innovative drug catalog.

However, the pace of the industry has not slowed. Data from the National Medical Products Administration show that by 2025, 76 innovative drugs had been approved for marketing in China, exceeding the 48 approved in 2024, setting a new historical high.

Thus, it is evident that solving the challenges of implementing commercial insurance innovative drugs requires a set of infrastructure capable of integrating fragmented payment sources and establishing stable operational rules, as well as a systematic solution that balances efficiency and quality.

Industry Consensus Has Emerged

Also in response to these pain points, several leaders of multinational pharmaceutical companies have provided clear judgments on the future direction of China’s innovative drug payment system.

During the 2026 China Development Forum, Severin Schwan, Chairman of the Board of Roche Group, bluntly stated that resource allocation and the increasingly severe issue of population aging will be realistic challenges China needs to face in the coming years. To address this, he proposed a path: vigorously developing commercial health insurance. Schwan analyzed that as public financial resources grow, finding new funding sources to support innovation is key to driving the life sciences industry forward. In this context, commercial insurance is seen as one of the most important solutions. He cited data indicating that commercial health insurance currently accounts for about 10% of total medical expenditures in China, indicating significant potential in this area.

Robert Ford, Chairman of Abbott, approached from a systemic perspective on the innovation ecosystem, proposing that a sustainable innovation ecosystem should have three characteristics: first, it should be guided by clinical needs identified by hospitals; second, it should be developed and commercialized by healthcare enterprises; third, it should be supported by the medical insurance and payment systems. In this model, doctors identify needs, companies develop and validate, regulatory agencies review and approve, hospitals implement, and medical insurance provides support, forming a complete innovation closed loop.

Ford emphasized that innovative products need to have a differentiated policy framework from basic medical products. He suggested creating opportunities in three areas: providing a 3-5 year pricing flexibility period for innovative products; accelerating the internal listing and access processes for innovative products; and providing more suitable DRG payment standards for groundbreaking technologies.

The intense voices of multinational pharmaceutical executives are not coincidental. In December 2025, the National Healthcare Security Administration, together with the Ministry of Human Resources and Social Security, released the “National Basic Medical Insurance, Maternity Insurance, and Work Injury Insurance Drug Catalog (2025)” and the first version of the “Commercial Health Insurance Innovative Drug Catalog,” marking the formal departure of China’s innovative drug payment system from a single-track model of medical insurance into a new phase of parallel “dual catalogs” of medical insurance and commercial insurance.

The core principle of the commercial insurance drug catalog is to establish a multi-tiered drug catalog system. Unlike the basic coverage of medical insurance, commercial insurance is built on users’ awareness of long-term risk protection and their willingness to pay for it. Therefore, users of commercial insurance are more likely to accept a multi-tiered drug catalog system.

Chai Yan, Executive Director of IQVIA Management Consulting, previously told a reporter from the 21st Century Business Herald that innovative biopharmaceuticals belong to high-tech industries and fall within the category of new types of productive forces. He hopes that China can form a welfare scale adapted to its own social and industrial high-quality development.

“Pharmacoeconomics is a technical evaluation method developed strictly according to Western neoclassical economic theory and fully utilizes local economic and social statistical indicators. However, when applied to different economies, it must be improved based on local realities,” Chai Yan pointed out. China is in a critical period of building a health aging society while accelerating the development of new productive forces and deepening dual circulation layout. China’s pharmacoeconomics needs to incorporate global, strategic variables to better lead social and economic development, and he believes that institutional construction will also promote further development of China’s pharmacoeconomics.

Payment New Infrastructure

The multi-tiered protection framework of “medical insurance for basic needs, commercial insurance for high-end needs” is moving from concept to reality, precisely responding to the calls from multinational pharmaceutical executives for “finding new funding sources to support innovation.” If the “dual catalogs” represent the top-level design of payment system reform, then how to make this design truly land will test the innovative capabilities of market participants.

Many industry insiders are optimistic about commercial insurance. However, commercial health insurance products are diverse and varied, and the payment ecology presents fragmented characteristics, bringing significant uncertainty to the market access decisions and channel expansion of pharmaceutical companies.

In this context, the value of platform-based enterprises in industry infrastructure is becoming increasingly prominent. A pharmaceutical industry analyst from a brokerage firm told a reporter from the 21st Century Business Herald that the market no longer needs just distributors; it needs platform-type enterprises that can integrate resources from “medical care, pharmaceuticals, and insurance” to provide one-stop solutions. “This has led to many executives from multinational pharmaceutical companies, including Bristol-Myers Squibb and Takeda, to lead teams in deep discussions with the Meixin Health team. With the deep empowerment of AI technology, these professional platforms have become key infrastructures for foreign pharmaceutical companies to布局 the Chinese market and achieve commercial landing.”

Represented by companies like Meixin Health, these platforms focus on industry pain points and are strategically positioned at the core hub of payment reform. They mainly connect pharmaceutical companies, commercial insurance institutions, and medical service systems, exploring ways for diverse payment paths to be implemented in real medical scenarios, attempting to integrate scattered payment resources from commercial insurance, out-of-pocket costs, and patient assistance to enhance the accessibility of innovative drugs. For example, in February 2026, Maiwei Biologics formed a deep strategic partnership with Meixin Health, with both parties collaborating around a one-stop user service platform “One Code Direct Payment” and smart drug commercialization solutions, leveraging the pharmaceutical multi-payment platform, drug supply chain, and AI intelligence hub as three foundational infrastructures. The essence of this collaboration is to deeply bind the full-course management of innovative drugs with diverse payments, upgrading from mere drug sales to a service closed loop of “Internet + medical + pharmaceuticals + insurance.”

CITIC Securities recently released a research report indicating that as the penetration rate of commercial insurance payments continues to rise, and data-driven cost control models mature, platform-type companies with core competitiveness will seize the high ground of industry development through resource integration and technological barriers.

Multinational pharmaceutical companies are also accelerating their layouts. In November 2025, Pfizer China launched the “Innovative Commercial Insurance Partnership Alliance,” collaborating with PICC Health, Taiping Health, Ping An Health Insurance, Taikang Online, and Meixin Health to explore the collaborative model of “pharmaceutical companies + insurance companies + payment service platforms.” The goal of this alliance is to “bridge the last mile from drugs to patients,” truly translating into health benefits for patients.

What Is the Future Direction?

Although the “dual catalogs” and platform exploration have opened up new spaces for innovative drug payments, challenges remain.

The “White Paper on Diverse Payments for China’s Innovative Drugs and Devices (2025)” (hereinafter referred to as the “White Paper”) points out that in 2024, the sales market size for innovative drugs and devices is expected to reach 162 billion yuan, with commercial health insurance expenditures of about 12.4 billion yuan, accounting for 7.7%. This payment scale is still small, making it difficult to support the development of the innovative drug market.

The aforementioned analyst also pointed out that the factors restricting the payment scale of commercial insurance include three main aspects: first, the penetration rate and coverage capacity of commercial health insurance still need to be improved. Currently, there are over 300 benefit insurance projects nationwide, but only some projects cover high-value drugs like CAR-T, with varying levels of benefits.

Song Zhanjun, deputy secretary-general of the China Insurance Research Institute at Beijing Technology and Business University, also pointed out that leveraging the payment potential of commercial health insurance hinges on continuously expanding the covered population and premium volume of commercial health insurance.

Second, the access bottlenecks at public hospitals have not been completely eliminated. Just because a drug is included in the catalog does not mean that patients can use it. Whether for national negotiation drugs or commercial insurance catalog drugs, subsequent access and supply assurance at the hospital level still require supporting policies. “Public hospitals are influenced by performance evaluations and insufficient clinical experience, causing doctors to have reservations about prescribing,” the analyst pointed out.

The “3-5 year pricing flexibility period” and “more suitable DRG payment standards” suggested by Ford directly address this pain point.

Third, the innovation of payment models is still in the exploratory stage. For high-value therapies like CAR-T that offer “one-shot cures,” there are mature models internationally, such as staged payments and pay-for-performance, but China’s payment system, primarily based on basic medical insurance, still struggles to support such arrangements.

Jiang Bin, deputy director of the Public Policy Research Center at Peking University, believes that it is necessary to explore a model where commercial insurance takes the lead in payment, with the cooperation of the medical insurance authority, based on the national level. Initially, the commercial insurance authority should take the lead and the National Healthcare Security Administration should assist in formulating a commercial insurance drug catalog for high-value drugs and explore mature implementation models. After establishing mature commercial insurance reimbursements, high-value innovative drugs with patient out-of-pocket costs below 500,000 yuan should be included in the scope for national medical insurance drug negotiation applications, determining medical insurance payment standards through the existing negotiation model, and after the national negotiation is implemented, proceed with one-stop settlement for commercial insurance and medical insurance.

In the 2026 government work report, “launching the commercial health insurance innovative drug catalog” was listed as an important achievement in people’s livelihood over the past year, and it was clearly stated that this year should “accelerate the development of commercial health insurance, promote high-quality development of innovative drugs and medical devices, and better meet the diverse medical needs of the populace.” At the same time, biopharmaceuticals have been elevated to the strategic height of emerging pillar industries for the first time. However, to truly become a pillar industry, it cannot rely solely on breakthroughs in laboratories and the expansion of factory capacities. A sustainable industrial ecosystem requires the formation of a closed loop across all aspects of innovative drug research and development, approval, production, payment, and application. The payment system is the hub connecting innovative supply and patient demand.

From the institutional innovation of the “dual catalogs” to the ecological construction of platform-type enterprises, and the policy support of provincial pilot projects, China is exploring a new path for innovative drug payments that is suited to its national conditions. The endpoint of this path is not only to ensure that more patients can access and afford good drugs but also to provide cross-cycle institutional support for the high-quality development of the biopharmaceutical industry.

When innovative drugs can achieve stable and predictable market returns, the industry can truly enter a sustainable development track, and the status of biopharmaceuticals as a pillar industry can transform from a policy vision into an economic reality.