Similarities and Differences of Medical Insurance System Development among Foreign Countries and China

Recently, the news of National Drug Reimbursement negotiations has constantly touched the heartstrings of pharmaceutical people. With the increasing of the elderly population in China, the reduction of drug price is a major trend. But the falling prices may not be friendly to new drugs. In this paper, the author makes a brief analysis of the mode and history of competitive access to medical insurance drugs. 

There are three types of access to medical insurance drugs in China. 

With the continuous deepening of China's reform on medical and health system, the National Drug Reimbursement List and the essential drugs list are gradually developing towards scientific management and refined development. Hence, the access system for such drugs will be gradually scientific and rational, instead of just on the basis of price. National Healthcare Security Administration No.1 Order in July, 2020 showed that drugs outside the National Drug Reimbursement List can enter the channel through negotiation access, direct access and bidding access. Among them, the negotiation access is for exclusive products, direct access is for products that winning the bid, and bidding access is non-exclusive products beyond the above two products. At present, exclusive drugs and non-exclusive drugs in China are negotiated by one-time access bidding. 

How do foreign countries adopt the medical insurance access? 

In fact, cost control is also the key to foreign medical insurance access, especially for some new drugs or exclusive products. Different countries have different strategies, but they are basically the same. Generally speaking, the principle for generic drugs is cheap price. Negotiations or other preferential policies are mainly for innovative drugs. 

Medical insurance negotiations are mainly for innovative drugs.

Medical insurance negotiations are mainly for innovative drugs. Some of the policies of countries in the world are based on the results of expert discussions, and some are based on the special evaluation of pharmacoeconomics... Only New Zealand is quite similar to China in adopting a healthcare access system. 

The negotiation of innovative drugs in New Zealand is mainly based on reducing the burden on patients. For example, the price of some drugs may remain unchanged, but the actual payment price can be reduced by increasing the payment ratio of medical insurance, and the patent period of drugs can be extended by agreement, or they can embrace special patent protection extension. Pharmaceutical companies can get benefits in this way, the drug price is also reduced, and finally, patients get the benefits. In short, it is generally a triple-win result. 

Low prices are the most advantageous for brand generic drugs. 

After the ending of the agreement protection period or patent protection period of some original drugs ends, all manufacturers who imitate these drugs can participate in the bidding for access to the directory of medical insurance products. The term obtaining through this bidding way is a period of 2-3 years, instead of permanent. At the end of the current contract period, it is necessary to negotiate again and re-screen cheaper generic drugs to save medical insurance funds to the greatest extent. Therefore, for brand generic drugs, the low price is the most advantageous and there is a time limit. It is an exclusive national medical insurance supply right with a certain time limit. 

National Drug Reimbursement List products based on common names is a drawback 

At present, China's National Drug Reimbursement List is classified and managed according to the common names of drugs. All manufacturers under the common name can get medical insurance payment after these drugs are included in the National Drug Reimbursement List. The biggest problem here is that the same generic drug from different medical supplies manufacturers may have different pricing strategies, outer packaging, production levels and economic conditions of the site, which lead to great differences in product prices for generic drugs with the same generic name due to different manufacturers. This method weakens the bidding enthusiasm for different manufacturers, and the price of actual generic drugs listed in the health insurance keeps high. 

On the contrary, with the gradual listing of generic drugs in foreign countries, when there are more than two manufacturers of generic drugs, they generally will invite bids for the generic products. Only the winning manufacturer can obtain the exclusive authorization and enter into a purchase agreement with medical insurance to obtain the only medical insurance payment license. 

Stable drug supply is an important evaluation index. 

The stability of drug supply includes the stability of company operation, supply and quality. The biggest problem is that some pharmaceutical manufacturers in China can't supply drugs consistently and stably after winning the bid, which leads to a shortage of drugs on the market, and there is no way but buying drugs at high prices on the black market. It also encourages some manufacturers to make hostile bidding. They bid at a lower price than the cost but do not continue to supply drugs, leading to drug shortages. Therefore, the stability of drug supply has become an important evaluation criteria to evaluate whether drugs have access to medical insurance. 

Summary 

At present, there have been some objections towards the admission of drugs or innovative drugs simply based on the price (low price). The comprehensive clinical evaluation of drugs that examines the value of drugs in multiple dimensions will be introduced into the access system of medical insurance in the future. However, removing the falsity among various drugs is the most important work goal in the medical insurance policy in recent 10 years. China will further promote the comprehensive evaluation of drugs with multiple dimensions and values, and improve the clinical quality evaluation of drugs after most drugs in China will be selected through price negotiation and there will be a stable system. Efforts shall be made to explore the scientific and rational management of National Drug Reimbursement List based on refined management and comprehensive clinical evaluation of drugs.