Against the backdrop of accelerating improvements in China’s multi-tiered healthcare security system, the institutional positioning and supportive role of commercial health insurance have become increasingly prominent. The 2026 Government Work Report listed the "launch of a commercial health insurance innovative drug catalog" as a key achievement in people’s livelihoods over the past year, while also emphasizing the need to "accelerate the development of commercial health insurance, promote high-quality development of innovative drugs and medical devices, and better meet the public’s diverse healthcare and medication needs."
In fact, with biotechnology and pharmaceuticals being elevated to the strategic level of emerging pillar industries for the first time, the policy framework linking healthcare, medicine, and medical insurance has been continuously strengthened. Multi-tiered payment and security mechanisms, including commercial health insurance, are working together to provide systematic support for the high-quality development of the biopharmaceutical industry.
Many industry professionals have noted that from the implementation of the first commercial health insurance innovative drug catalog to its clear inclusion in the Government Work Report, commercial health insurance is becoming deeply embedded in the pharmaceutical innovation and medical payment systems, gradually emerging as a key pillar of the multi-tiered healthcare security framework.
However, commercial insurance support for innovative drugs still faces practical bottlenecks: insurers lack precise risk management tools for high-cost drugs, public hospitals have low adoption rates for drugs listed in the commercial insurance catalog, and patients often lack awareness of reimbursement procedures. With policy support in place, the challenge lies in how to effectively bridge the "last mile" of implementation—a topic that has become a major focus of discussion during this year’s National People’s Congress sessions.
Policy Guidance Over the past year, a series of policies have been introduced to set the direction and strengthen the foundation for the development of commercial health insurance. In September 2025, the National Financial Regulatory Authority issued the "Guiding Opinions on Promoting High-Quality Development of Health Insurance," outlining the goal for health insurance to play a more significant role in the national health security system by 2030. It emphasized coordinated development of group and individual health insurance to meet diverse needs across all population groups and life stages.
In December of the same year, the National Healthcare Security Administration and the Ministry of Human Resources and Social Security jointly released the "Commercial Health Insurance Innovative Drug Catalog," which included 19 innovative drugs from 18 companies. This marked China’s first specialized catalog for innovative drugs under commercial health insurance, representing a major breakthrough in the multi-tiered healthcare security system.
Driven by both policy incentives and market demand, the scale of commercial health insurance continues to expand. Data from the Insurance Association of China show that over the past decade, commercial health insurance has achieved an average annual growth rate of over 20%, with more than 11,000 medical insurance products available in the market. According to the National Financial Regulatory Authority, commercial health insurance premiums reached 997.3 billion yuan in 2025, a year-on-year increase of 2.04%. Analysis by the Longevity Era Research Institute under Taikang Group suggests that while China’s commercial health insurance market is at a crossroads in 2026, facing uncertainties in product profitability and operational models, policy guidance—including the innovative drug catalog—represents a clear growth opportunity.
For the catalog to deliver tangible benefits, long-term sustainability of insurance products is essential. Issues observed in the rapid expansion of some inclusive health insurance products in recent years have also served as a warning. Wu Fan, a member of the 14th National Committee of the Chinese People's Political Consultative Conference and Vice President of Shanghai Medical College of Fudan University, emphasized that basic medical insurance, government-guided inclusive insurance (such as "Hui Min Bao"), and fully market-driven commercial health insurance should have clear boundaries in terms of function and operation. For purely commercial products, it is essential to respect market rules to ensure a virtuous cycle.
Wu suggested that insurance associations should play a stronger role in guiding insurers to reinvest savings from discounts on innovative drugs into enhancing coverage for inclusive insurance, group insurance, and high-coverage plans. This could include services such as early disease screening, multidisciplinary consultations, postoperative rehabilitation, and health management for policyholders. At the same time, insurers should be given greater autonomy in product pricing and operations to encourage innovation and attract more participants, thereby expanding the funding pool.
Implementation Challenges While policy guidance sets the direction and market demand provides momentum, several practical obstacles must be overcome for the commercial health insurance innovative drug catalog to benefit patients effectively. Public information shows that 17 of the 19 drugs included in the catalog are injectables, which require administration by healthcare professionals in hospital settings. However, some hospitals, citing internal management rules, refuse to administer drugs purchased outside, making hospital adoption a critical factor for the successful implementation of the catalog.
Sun Jie, a member of the National Committee of the Chinese People's Political Consultative Conference and Vice Dean of the School of Insurance at the University of International Business and Economics, pointed out that public hospitals are still constrained by performance indicators such as average treatment costs. Physicians may hesitate to prescribe innovative drugs due to concerns about raising departmental cost metrics, while hospital administrators worry about impacts on institutional performance evaluations.
Moreover, innovative drugs are often high-cost products involving storage, prescription, pharmaceutical services, and usage monitoring. The current medical service pricing system lacks specific fee items for pharmaceutical services, leaving hospitals without compensation mechanisms for providing these additional services. These factors limit the full realization of the catalog’s intended benefits.
To address these issues, Sun recommended adjusting performance evaluation metrics for tertiary public hospitals by excluding innovative drugs from cost calculations and introducing indicators that encourage their use. She also proposed allowing hospitals to receive funding from commercial insurance in addition to government allocations, medical insurance funds, and out-of-pocket payments, while establishing a shared payment mechanism for pharmaceutical services among insurers, public insurance, and patients. Additionally, a markup payment mechanism could be introduced for the 19 drugs in the catalog to compensate healthcare institutions for using innovative products.
Clearly, resolving the implementation challenges requires an infrastructure that integrates fragmented payment sources and establishes stable operational rules, along with systematic solutions that balance efficiency and quality. Industry experts believe that as payment models shift from "passive reimbursement" to "active management," artificial intelligence (AI) is emerging as a new lever for change.
A representative from MedTrust stated that China’s current payment system for innovative drugs and devices still suffers from fragmented rules, inconsistent data standards, inefficient manual reviews, and delayed risk identification. This complex and disjointed structure is ill-suited to the needs of precise pricing, dynamic coverage, and end-to-end management for innovative medical products. Building a sustainable medical payment infrastructure oriented toward "AI-driven medical payment" could accelerate innovation and enhance public satisfaction.
Specifically, efforts should focus on: First, advancing AI-driven upgrades in medical payment, using real-world data and vertical AI models to pilot innovative insurance schemes such as outcomes-based payment and risk-sharing arrangements. Second, creating integrated payment and service platforms by embedding AI capabilities into key processes such as prescription circulation, specialty drug services, pharmacy networks, direct payment, and patient management. Third, strengthening the "AI + data" foundation for the healthcare-insurance ecosystem by promoting industry-wide data sharing platforms to close the loop between data, payment, and services.
It is anticipated that, with continued improvements in supporting mechanisms and deeper integration of technology, a more efficient and sustainable payment landscape for innovative drugs will soon take shape.