China has Renewed the National Reimbursement Drug List and Released the First Commercial Reimbursement List for Innovative Drugs

On 7 December 2025, the National Healthcare Security Administration (“NHSA”) and the Ministry of Human Resources and Social Security jointly released the updated National Reimbursement Drug List for National Basic Medical Insurance, Maternity Insurance and Work Injury Insurance (“NRDL”) and the first-ever Commercial Health Insurance Innovative Drug List (“CHIIDL”). The NRDL and CHIIDL both took effect on 1 January 2026. This update is aimed at expanding the NRDL to cover those drugs urgently needed in medical treatments and establishing a multi-level medical security system with the brand-new drug catalogue for commercial healthcare insurance.

Updated NRDL

The NRDL has been updated with 114 newly added drugs. The newly added drugs cover multiple critical clinical areas where effective treatment options were previously lacking. This includes medicines for major diseases such as triple-negative breast cancer, pancreatic cancer, and lung cancer, as well as treatments for some rare diseases and chronic diseases like diabetes. Concurrently, 29 drugs were removed from the catalogue because they were no longer supplied to patients or had been outperformed by better alternative treatments. The updated NRDL now includes a total of 3,253 drugs, including 1,857 chemical/biologic drugs and 1,396 proprietary Chinese medicine. After the update, the coverage of key treatment areas, including oncology, chronic diseases, mental illnesses, rare diseases, and pediatric medicines, has been significantly enhanced.

Notably, 50 drugs of the newly added are top tier “Class 1 Innovative Drugs” which has not marketed in any country globally. However, under the Diagnosis-Related Group (“DRG”) and Diagnosis Intervention Payment (“DIP”) schemes, the use of expensive innovative drugs directly erodes hospital profit margins. To address this, the Interim Measures for Administration of Medical Insurance Case-Based Payment, which took effect in August this year, introduced a special case review mechanism, allowing hospitals to exclude complex, critical cases involving high-cost innovative drugs from the routine DRG/DIP bundled payment scope. Furthermore, some regions, such as Beijing and Zhejiang, have begun exploring the Add-on Payments for New Technology, which provides additional reimbursement above the standard DRG/DIP rates for eligible innovative technologies and drugs.

First CHIIDL

The CHIIDL is expected to create a complementary system that fills gaps in the basic medical insurance coverage. The first edition of CHIIDL includes 19 drugs from 18 pharmaceutical companies, including 9 Class 1 Innovative Drugs. The CHIIDL features cutting-edge treatments like CAR-T cell therapy and bispecific antibodies for cancer, as well as new drugs for Alzheimer’s disease and rare diseases (like neuroblastoma and Gaucher disease). The main goal is to cover highly innovative drugs that offer significant clinical value and major patient benefits, but which are currently not covered by the NRDL.

In a press conference earlier in January 2025, the CHIIDL was unofficially referred to by NHSA as the “Category C Drug List,” referring to a third category of drugs outside the Category A (fully reimbursed by the national medical insurance) and Category B (partially reimbursed) drugs in the NRDL. The proposed “Category C Drug List” is designed to capture highly innovative drugs that offer significant clinical utility and substantial patient gains, but which are currently ineligible for the NRDL as they exceed the limit for essential and fundamental medical services. The NHSA stated it would encourage inclusive commercial health insurance (“Huiminbao”) to cover the “Category C” drugs.

According to the NHSA’s Work Plan for the Adjustment of the 2025 NRDL and CHIIDL, issued on 10 July 2025, the references to “Category C Drug List” was changed to CHIIDL, which was organized and formulated by the NHSA concurrently with the adjustments to the NRDL. While the procedure for inclusion is largely consistent with the NRDL adjustment, commercial insurance experts hold significant decision-making power regarding which drugs enter into the CHIIDL and the price negotiation process. The innovative drugs’ prices are jointly determined through trilateral discussions among the NHSA, insurance companies and pharmaceutical enterprises, resulting in a negotiated price below the original market level. However, the discounted price between pharmaceuticals and insurers is confidential.

To further enhance patient access to innovative medicines, the NHSA provides that innovative drugs listed in the CHIIDL are exempt from three key metrics used in basic medical insurance management:

• Exclusion from Basic Medical Insurance Self-Payment Rate Metrics: The costs of these drugs, when paid by the patient or commercial insurance, will not be calculated into the hospital’s performance indicators related to the patient’s out-of-pocket spending ratio;
• Exclusion from Centralized Procurement (Volume-Based Procurement, “VBP”) Monitoring: These drugs will not be monitored or assessed alongside the winning bids from centralized procurement, ensuring hospitals are not penalized for prioritizing these high-value, non-VBP innovative drugs;
• Exclusion from Case-Based Payment (DRG/DIP) Scope: Applications of these innovative drugs that are covered by CHIIDL can be excluded from the fixed bundled payments under the DRG/DIP system, allowing separate payment and settlement.

The CHIIDL is designed as a recommendation for all commercial health insurance providers in the market. Previously, local authorities and individual insurance companies developed their own coverage lists, such as the drug lists of many Huiminbao products developed under the guidance of local healthcare security authorities. This local practice resulted in vague and fragmented coverage scopes, making it difficult to achieve economies of scale. The introduction of this recommended CHIIDL changes that by offering the industry a single, data-backed, and professional standard. From the insurer’s perspective, proactively including drugs from the CHIIDL offers dual benefits: first, it increases product appeal and enrollment rates because these drugs are highly innovative, clinically valuable, and fill clinical gaps (like certain specialized oncology or Alzheimer’s medicines); second, since these drugs are typically discounted or offered at preferential prices, it allows insurers to effectively manage and reduce their claims payment costs. For pharmaceutical enterprises, this CHIIDL brings new market dynamics: a drug already holding significant market share may face a risk of being substituted if a competitor enters the CHIIDL with a lower negotiated price. Conversely, inclusion in the CHIIDL offers an advantage, as the potential adoption by many commercial insurance products is expected to create a significant scale effect and substantially increase utilization volume.

Given that inclusive commercial health insurance plans (Huiminbao) in many localities operate under the guidance and support of local healthcare security authorities, it is highly likely that the drugs included in the CHIIDL this time will be adopted by Huiminbao products in a short term. For example, the Shantou Huiminbao and Shenzhen Huiminbao have already announced that they will cover all the drugs in the CHIIDL. Further, the group health insurance products being promoted in some regions recently are also anticipated to become a new growth driver for the drugs listed in the CHIIDL.

Implications

Both the expanded NRDL and the First CHIIDL underscore the support for innovative drugs, providing clear return expectations for innovation. Also, the introduction of the first CHIIDL marks a significant step in China’s development of a multi-tiered medical security system. For pharmaceutical companies, drugs that fail to enter into the NRDL in the short term now have the strategic option of targeting the CHIIDL. However, as a newly established recommended catalogue, the CHIIDL differs from the NRDL because it does not automatically grant listed drugs broader commercial insurance coverage or immediate increase in hospitals. How effectively the CHIIDL will operate in practice and to what extent it will actually bring benefits to pharmaceutical companies, insurance companies and patients remain to be seen.