Reforms aim at even broader healthcare coverage to bolster already impressive achievements
Over the past two decades, China has increased health insurance coverage to over 95% of the population. The country has succeeded in lifting 600 million of its people out of poverty over the last three decades and as a result of economic growth and higher personal incomes, Chinese people have been demanding better healthcare.
China, as many other countries in the world, is facing an aging demographic which, along with increased incidences of non-communicable diseases (NCDs) such as cancer and cardiovascular disease, is beginning to manifest itself in rising healthcare costs. The World Bank’s joint report with the Chinese government found that, without reform, health spending would increase to USD 2.5 trillion in 2035, up from USD 543.5 billion in 2014. Additionally, there is still an immense imbalance between rural and urban health care coverage which calls for government action.
Healthy China 2030 embraces UN Social Development Goals
President Xi Jinping has put health at the core of policy making, recognizing its ability to influence both social and economic development. Healthy China 2030 sets out China’s long-term approach to healthcare and shows China’s commitment to participating in global health governance. It aims at achieving health equity by embracing the the United Nations’ Social Development Goal (SDG) 3.8: Universal Health Coverage (UHC).
In concrete terms, the plan aims to improve healthcare services and financial coverage across the country through reformed legislation and institutional reorganization. By committing to tackling the growing NCD burden through provision of better coverage of diseases such as cancer and cardiovascular illnesses, China also demonstrates its engagement in the UN SDG 3.4 to reduce premortal mortality from NCDs by one third by 2030.
Healthy China 2030 signals the start of a more innovation-friendly environment
Healthy China 2030 reforms are very promising and seem to be progressing at an impressive pace – we have already seen an institutional reshuffle which boasts increased competencies and power. The Chinese government proposals target a balance spanning quality, cost savings and a value-based healthcare system.
To achieve health equity and better access for all, costs in the healthcare system are to be cut for some cost-drivers. Generics are promoted through new prescription methods or more advantageous reimbursement rules. While this might not seem like much for pharmaceutical companies to celebrate, these cost savings enable a widening of financial and service coverage of healthcare and leaves room for investment into innovative medicines.
Indeed, China is promoting an innovation-friendly environment: better regulatory, IP and reimbursement conditions are proposed in several new draft laws. And, according to the Chinese government, particularly essential medicines will benefit from faster market approval if they deliver better health and longevity to patients. Such innovative medicines could also be considered cost-effective: in-patient treatment could be shorter, the need for more invasive methods such as surgeries could be reduced meaning patients could recover faster and return to work sooner. On the basis of the currently proposed legislation, some studies even promise a “tsunami of new launches”, with an expected rise in innovative medicines from an average 5 new launches between 2014 and 2016 to 39 new launches alone in 2017.
The Chinese government is striving to boost social and economic development for its people while playing an increasingly leading role as global economic and political power. The country is determined to improve universal health coverage and they consider a Chinese, research-based pharmaceutical industry as crucial to realizing these goals, as it contributes to both health and wealth. There is definitely reason to believe that these motivations will be the driving force behind a promising innovative-friendly environment.
Innovative medicines contribute to public health and wealth
President Xi Jinping has earmarked health as an important pillar to a prosperous society. The Healthy China 2030 plan could be the chance to bring innovative medicines to patients, something which we at Bayer see as an overall fourfold benefit for society:
- Patients: Innovative medicines bring new options to patients. They can save and extend lives, halt or slow disease progression, and improve quality of life. New and innovative medicines often contribute to treatment plans with reduced side effects or an easier mode of administration.
- Economies: Research-based pharmaceutical companies can generate economic value in terms of job creation, investment in research and development (R&D), and medications that improve productivity, allowing patients to return to work faster after sick leave.
- Healthcare systems: Innovative medicines can put healthcare systems on a more sustainable path by reducing inefficiencies and costs in other parts of the system.
- Scientific progress: Research and development activities contribute to an improved understanding of diseases and medicine targets and thus further accelerate scientific innovation.
Which reforms spell good news for both patients and pharma companies?
To install a more transparent and quicker drug approval process, the Chinese FDA (CFDA) has proposed various amendments. Some of the amendments are expected to improve access for patients to innovative medicines:
- The establishment of an investigative new drug (IND) program and a shortened 60 day clinical trial application (CTA) approval process
- Acceptance of foreign clinical data
- Establishment of an orphan drug system
- Structured stakeholder-CFDA communication
To signal a fertile and safe soil for approved drugs, China has also taken considerable steps to strengthen the intellectual property (IP) protection system. International drug companies will be safe in the knowledge that their intellectual property will be protected from theft or infringements. This peace of mind for industry players could boost the number of innovative medicine launches in China, ultimately benefitting patient access to new health technologies.
Proposed IP measures include:
- A program for patent term extensions (PTE) which is to be piloted on selected drugs was proposed in October 2017.
- The Chinese Food and Drug Administration has proposed a patent enforcement system which links generic drug approvals with potential patent-infringement.
- Regulatory data protection of 6 years for chemical medicines, and 10 years for new biologics, orphan and pediatric medicines, under certain conditions, was proposed.
Finally, reforms to update China’s National Reimbursement Drug List (NRDL) could also improve the access and affordability of innovative medicines for Chinese patients. The former Ministry of Human Resources and Social Security (MOHRSS) is considering to:
- Shift to a timelier, more transparent and predictable reimbursement system.
- Hold periodic negotiations between manufacturers and government agencies to improve communication and transparency
- Allow drug manufacturers to apply for reimbursement at any time.
More reimbursement reforms are likely. The institutional reform which was announced in March 2018 entailed a major restructuring to the former Ministry of Human Resources and Social Security (MOHRSS), which is to be regrouped in the new National Medical Security Bureau (NMSB). This regrouping effort is predicted to bolster the NMSB’s competencies on reimbursement policies and promote private sector insurances.
Read more of our Healthy China 2030 article series here:
Healthy China 2030: Spotlight on China’s strategy to tackle cancer
Healthy China 2030: Finding a balance between innovative cancer medicines and generics
Healthy China 2030: Valuing innovative cancer medicines in China’s legal framework