Pricentric Insights: China’s Interim Measures for NRDL, BMI Administration

Region: ASIA & SOUTH PACIFIC | Type: Policy | Keywords: #bmi #copay #drugapprovals #healthinsurance #negotiations #nhsa #nrdl #pricingandreimbursement #regulation

PRICENTRIC BRIEF:

  • The National Healthcare Security Administration (NHSA) has released a draft proposal on interim measures surrounding the administration of medicines under the Basic Medical Insurance (BMI) scheme, in which China addresses the management of the national reimbursed drug list (NRDL), including the eligibility for the inclusion or exclusion of drugs, either domestic, generic, or Western-made, going forward
  • In the proposal, China outlines criteria for inclusion (for example, through negotiations), how these drugs will be paid for (with a co-pay or BMI pools), and which drugs won’t be allowed entry, mainly due to low therapeutic value or price/cost
  • The terms for agreement exclusivity have been outlined, as well as what clinical experts behind the formulation and adjustment of the NRDL are looking for when determining a drug’s eligibility for re-inclusion

THE DETAILS

BEIJING, China – The National Healthcare Security Administration (NHSA) has released a draft proposal on interim measures surrounding the administration of medicines under the Basic Medical Insurance (BMI) scheme, in which China addresses the management of the national reimbursed drug list, including the eligibility for the inclusion or exclusion of drugs, domestic, generics, and Western medicines, going forward.

The following will be open for comment until mid-May.

In the first chapter, the NHSA underscores the importance of expanding the BMI scheme while keeping costs affordable for both China and patients. In this way, China seeks to improve the management behind the reimbursed drugs list (RDL).

The BMI RDL is to be formulated on the basis of generic drug name, or international non-proprietary name (INN), and all drugs of the same generic names as those listed in the RDL will be covered automatically. This is no surprise for China. Throughout the last year, Chinese health officials have sought to encourage greater use of generic drugs and pressured domestic drugmakers to increase the production of these cheaper drugs. For China, generics mean greater affordability not only for citizens, but the BMI scheme itself.

The level of drug reimbursement will be compatible with the flexibility of the BMI fund and insured to meet the reasonable demand for drugs. Both traditional Chinese medicines (TCM) and western medicines will be viewed with the same level of regard.

To uphold the importance of all medicines, the RDL is composed of five sections:

  1. Common rules, which detail dosage form specifications, among other contents of the RDL
  2. Western medicine, which contains chemical drugs and biological products
  3. Formulated TCMs, which contains, as the name suggests, formulated TCMs
  4. Negotiated medicines, which contains negotiated drugs within the validity of an agreement
  5. TCM decoction pieces, which contains decoction pieces paid by the BMI which are not reimbursable

The NHSA is responsible for establishing the management policy system for the BMI, including clarifying the conditions and principles for use and payment of BMI reimbursable drugs across China and formulating, organizing, publishing, and adjusting the National RDL (NRDL), whereas the BMI management agency will specifically undertake the organization and implementation of the adjustment of the NRDL.

Provincial level healthcare security administrators are responsible for the administration of BMI reimbursable drugs within their respective territory. Likewise, local healthcare security administrators of pooling areas are responsible for implementing the RDL and related policies, such as reviewing, supervising, and managing BMI drug consumption by medical institutions, as well as the adherence of these institutions to settling and paying medical insurance costs.

In Chapter 2, the NHSA outlines the formulation of adjustment of the RDL, which will be comprised of chemical and biologic drugs, formulated TCMs, and TMS decoction pieces that were approved by China’s national drug regulator. Support for essential and innovative drugs with indigenous IP rights will be included in the RDL.

A variety of medicines won’t be included in the RDL, such as Class B OTC drugs, preventative vaccines and contraceptives, and medicines mainly used to enhance sexual function, treat hair loss, and reduce weight, among others.

China can also pull drugs from the RDL for a few reasons, but most notably if the national regulator revokes authorization or if the drug’s risks outweigh its benefits. Additionally, drugs can also be transferred out of the list if the drug’s price is unreasonably high or unjustified compared to drugs in a similar therapeutic grouping, if its clinical value is unreliable or substitutable by another product, or if the drug doesn’t meet safety, efficacy or economic measures.

The NHSA will be responsible for making adjustments to the RDL, which will occur once a year (in principle, China noted). To make adjustments, the NHSA will consider BMI fund income, expenditure, and affordability. Drugs submitted by manufacturers that meet the criteria for inclusion will be included in the following RDL.

The payment measures for RDL-exclusive medicines will be determined through access negotiation and the payment measures for non-exclusive RDL medicines will be determined through either centralized procurement or price competition to be granted access on the RDL.

When reviewing the eligibility for inclusion of a drug on the RDL, expert committees will consider: new products, drugs recommended for transfer onto the list, drugs recommended to be henceforth excluded, and medicines recommended for inclusion based on an adjustment to their scope of payment.

The national BMI agency will handle pharmaco-economics and medical insurance management, among other responsibilities, to tackle negotiations or access bidding for inclusion. Excluded medicines will enter into negotiations while non-exclusive products will be subject to manager access bidding. Products that succeed will be included in the RDL or have their scope of payment limitations adjusted accordingly.

Negotiated drug agreements are valid for 2 years. Upon expiration, if negotiated drugs are still exclusive for a variety of factors, contracts will be renewed via budget impact comparisons and analysis. During negotiations, medical institutions are able to negotiate prices, too. Agreements for all negotiated drugs should be renewed every two years.

Any expenses for RDL drugs incurred by those insured by the BMI scheme may be reimbursed by the fund, and the level of reimbursement is contingent on the scope of payment limitations or need. Western drugs are categorized by their therapeutic use, which stipulates how these drugs will be paid for. For example, “Category A Drugs” require a certain percentage payment (a co-pay) by the insured whereas “Class B Medicines” are paid for by pools.

In the final section of the proposal, China explains that the regulation of the RDL and its implementation will rely on the use of agreements, constant monitoring of consumption and use by medical institutions, and manufacturer adherence to China’s policy and regulatory measures pertaining to this list.

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