Understanding China's 2024 NRDL: Key changes and their impact

Since the establishment of the National Healthcare Security Administration (NHSA) in 2018, the National Reimbursement Drug List (NRDL) has added over 700 emergency, life-saving, and innovative drugs. This blog provides an overview of the NRDL’s history, highlights the key changes for 2024, and discusses the potential impact on both local and international pharmaceutical industries.

History of the NRDL

Out of 700 drugs added in to the NRDL since its inception, 446 new drugs were added through negotiations, focusing on newly launched drugs with high clinical value across 31 therapeutic areas. The inclusion and exclusion criteria of these innovative drugs reflect the key unmet needs identified by the NHC (National Health Commission) and clinical value of selected drugs each year. As a result, each year can be characterised by the way in which the NRDL was implemented:

2020: The year of ‘urgent’

The 2020 NRDL emphasised the urgent clinical need for COVID-19 prevention and control. The process enabled COVID-19 vaccines to be available to the general public as soon as possible. This approach was essential to address the immediate health crisis posed by the pandemic.

2021: The year of ‘new’

The 2021 NRDL highlighted the inclusion of drugs with significant changes in indication or therapeutic areas, particularly for the treatment of respiratory diseases related to COVID-19. This change aimed to incorporate the latest advancements in medical treatments for pandemic-related health issues.

2022: The year of ‘focus’

The 2022 NRDL placed special emphasis on drugs in the “Encouraged generic drug list” and the “Encouraged paediatric drug R&D list.” Chronic disease treatments and rare disease treatments also received increased attention, reflecting a broader strategy to address long-term health challenges.

2023: The year of ‘improve’

The 2023 NRDL focus was on enhancing coverage for chronic diseases, rare diseases, and paediatric drugs. The NRDL saw the addition of 126 new drugs, including 15 orphan drugs covering 16 rare diseases. Notably, drugs for rare diseases with high unmet needs, such as Gaucher disease and myasthenia gravis, were included.

To maintain the affordability of healthcare funding, drugs with low clinical value have been systematically removed from the NRDL each year. From 2019 to 2023, a total of 273 drugs was excluded from the list, ensuring that the NRDL remains focused on high-value treatments.

2024 NRDL: Key changes and potential impact

NHSA published the 2024 NRDL Work Plan on 28th June 2024, which is the guideline for 2024 NRDL process. The keyword for the 2024 NRDL is "steady." The aim is to ensure the NRDL covers the basic medical needs, refine the drug catalogue structure, optimise fund management, standardise payment, improve coverage fairness, and maintain funding affordability. The 2024 adjustment procedure focuses on balancing medical needs and funding affordability.

A significant change in the 2024 NRDL Work Plan is linking the NRDL outcome to the manufacturer's credentials, and/or supply ability. Drugs included through negotiation but failing to supply as agreed will be closely monitored and may be removed based on their credentials and supply ability over the last three years. This approach ensures that drugs meet patient needs rather than merely occupying a spot in the NRDL. Drugs meeting the following criteria are likely to be removed from 2024 NRDL:

Drugs in the ‘regular catalogue’ failed to supply the designated medical institutions in the past three years
Negotiated drugs failed to supply as in the contract as of 30th June 2024
Drugs that comply with Articles 9 and 10 of the Interim Measures for the Administration of Drugs for Basic Medical Insurance

Similar to previous NRDL process, the 2024 NRDL Work Plan outlines a five-stage process: preparation, application, expert review, negotiation, and announcement of results. The process began on 1 July, and the results will be announced in November 2024.

Pricing negotiation

Since implementing the NRDL, the NHSA has introduced price/volume-based negotiations to control drug acquisition costs and to maximise the funding utilisation. The average price cut ranges from 50.64% in 2020 to 61.7% in 2023 from the launch price. A notable example is the 2021 negotiation of Nusinersen (inj.), where the price dropped from RMB 697k/vial (~£70k/vial) to RMB 30k/vial (~£3k/vial), a 95.7% reduction.

In 2022 alone, 275 drugs included in the NRDL were prescribed/reimbursed 180 million times. This means the price reduction of these medicine saved 210 billion RMB of the insurance fund. The 2024 NRDL price negotiations are expected to continue this rigorous approach with the expected price reduction in 50-60% range.

The NHSA published the negotiation drug renewal rules and non-exclusive drug bidding rules in July 2023. No changes are made in these rules for publication and companies are expected to prepare for the same process according to these rules if drugs are already included in the 2023 NRDL.

Apart from the NRDL, the DRG/DIP (diagnosis-related groups/disease-specific payment) payment reform also has a significant impact on drug reimbursement and market penetration in China. ICON will monitor this policy in China and provide our insights on how DRG/DIP impact payment methods and market penetration of your assets in a future blog.

Key takeaway

The 2024 NRDL adjustments signify a significant step towards maintaining a balanced approach to healthcare funding and access to essential drugs in China. By focusing on refining the drug catalogue structure, standardising payment, and ensuring the reliability of drug supply, the NRDL aims to address both immediate and long-term healthcare needs effectively. The integration of manufacturer credentials, and supply ability into the NRDL decision-making process underscores a commitment to patient-centric care and sustainable healthcare management.

As the NRDL evolves, it is crucial for pharmaceutical companies to stay informed and agile in response to these changes. ICON’s expertise in tracking policy developments and analysing their impact can help companies navigate the complexities of the NRDL, ensuring they remain competitive and compliant in this dynamic landscape.

Understanding the intricacies of the NRDL and its annual adjustments is vital for aligning commercial strategies with regulatory expectations. By leveraging insights and expertise, pharmaceutical companies can better position themselves to meet the evolving healthcare needs of the Chinese population while contributing to the overall goal of sustainable and equitable healthcare access.

At ICON, we understand the challenges of tracking rapidly evolving market access policies and comprehending their impact on your commercial strategy. Our Insights, Evidence and Value team within Commercial Positioning provides updated policy changes, analysis and insights, and subject matter experts can help you understand the implications on pricing, evidence generation, value proposition, and commercialisation of your assets.

Contact us for more information.

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