The stock market saw a significant boost in the innovative drug sector following a key regulatory announcement.

On June 29th, the National Healthcare Security Administration (NHSA) published a list of drugs that have passed the preliminary formal review for inclusion in the 2026 national reimbursement drug list. A total of 557 drugs passed the initial review for the basic medical insurance catalog, while 54 drugs passed for the commercial health insurance innovative drug catalog.

This news provided a strong uplift to the innovative drug segment, with shares across the board experiencing notable gains. Xin Gan Jiang surged by 30%. Seven other stocks, including Shu Tai Shen, Guang Sheng Tang, Wan Bang Yi Yao, and Bai Ren Yi Liao, saw their shares rise by the daily limit of 20%. Furthermore, several thematic ETFs focused on innovative drugs performed exceptionally well. The STAR Market Innovative Drug ETFs managed by China Universal Asset Management and Guotai Asset Management both rose over 11%, setting new single-day highs since their listings. Innovative Drug ETFs from Huatai-PineBridge Fund and Guotai Asset Management also gained more than 9%. The turnover for the GF Fund managed Hong Kong-listed Innovative Drug ETF remarkably exceeded 100 billion yuan, reaching 105.28 billion yuan, marking its highest single-day level this year.

Reports indicate a further increase in the number of drug applications this year, with 818 submissions covering 674 distinct drug generic names. This represents an increase of 100 submissions and 41 generic names compared to 2025. The preliminary review pass rate saw a significant improvement, rising to 92% from 84% last year, excluding pre-submitted varieties.

Officials from the NHSA commented that the dual increase in application volume and pass rate reflects both the vigorous development of China's pharmaceutical industry and the continuous growth in new drug approvals. It also indicates that pharmaceutical companies now have a clearer understanding of the catalog adjustment rules and are submitting more rational applications.

Newly approved drugs dominated the application structure this time. Among them, 343 drugs with new generic names approved within the last five years accounted for over half of the total. Several high-profile innovative drugs were included in the list, such as the global first-in-class dual-specificity ADC, lenkang yilongtuo monoclonal antibody from Baili Tianheng; the world's first cAMP-biased GLP-1 receptor agonist, einoglutide from Pfizer; the global first hepatitis D monoclonal antibody, libeiveita monoclonal antibody from Huahui Anjian; the Alzheimer's disease treatment donanemab from Eli Lilly; and lecanemab injection from Eisai. Applications for the commercial insurance innovative drug catalog also featured several radiopharmaceuticals and CAR-T cell therapies, such as Lutetium [177Lu] tecxivipeptide injection and Yttrium [90Y] microsphere injection.

Concurrently, seven drugs that were included in last year's Commercial Health Insurance Innovative Drug Catalog (2025) have now passed the initial review for the basic medical insurance catalog this time. According to the public notice, donanemab injection, lecanemab injection, naxitu monoclonal antibody injection, najiaolunsai injection, ruijiaolunsai injection, sapropterin dihydrochloride tablets, and zenidatuo monoclonal antibody for injection have all passed the preliminary stage.

Zhang Yue, Chairman of Aoyou International, noted that this initial review covers cutting-edge fields such as ADCs, CAR-T therapies, Alzheimer's disease, and autoimmune diseases. The inclusion of multiple domestically developed blockbuster innovative drugs fully demonstrates the inclusiveness and support of the medical insurance system for pioneering clinical innovation.

"Medical insurance has become a critical pathway for innovative drugs to achieve peak sales," stated Zhang Tingjie, founder of Fengyun Yaotan. He explained that once included in the reimbursement list, innovative drugs experience rapid market expansion. The pre-submission mechanism introduced this year, which allows drugs not yet approved to apply in advance, significantly shortens the time window from market launch to insurance coverage. This enables patients to benefit sooner and allows companies to achieve commercial returns earlier.

While more new drugs have passed the preliminary formal review, it is important to recognize that the core positioning of basic medical insurance is to provide essential coverage, with fund affordability being a hard constraint. Zhang Yue pointed out that since 2021, the "invisible red line" of an annual treatment cost not exceeding 300,000 yuan for drugs within the national reimbursement drug list has not been breached.

In this regard, relevant NHSA officials also clarified that while some high-priced drugs, which may exceed the basic insurance's coverage capacity, have passed the initial review this year, it only signifies that these drugs meet the application criteria and qualify for the next stage. Whether such drugs ultimately enter the basic medical insurance catalog still depends on undergoing rigorous expert reviews, followed by exclusive drug negotiations or non-exclusive drug bidding processes.

Regarding the strong rebound in the innovative drug sector, Zhang Yue indicated it results from a confluence of policy, fundamentals, and capital flows. Beyond the direct catalyst of the higher-than-expected initial review pass rate, the recent密集 approvals of several重磅 innovative drugs and active outbound licensing deals for domestic innovative drugs have provided solid fundamental support for the sector. Against the backdrop of historically low sector valuations,敏锐 institutional capital has accelerated its inflow, creating a powerful合力 for rotation from high to low valuations.

Several securities firms have expressed optimistic views on the future of the innovative drug sector. Caixin Securities pointed out that the sector's adjustment has been relatively thorough, making its valuation particularly attractive. It noted that China's biomedical industry has entered a high-quality development stage driven by innovation, maintaining a "领先大市" (leading the market) rating for the industry. Industrial Securities' research report suggests that the innovative drug sector is gradually transitioning from being "valuation-driven" to being driven by "performance and globalization realization." Based on验证 from investment and financing, orders, and earnings, the upward trend in industry chain景气 is relatively certain. With new CDMO (Contract Development and Manufacturing Organization) orders maintaining high growth and rapid expansion of new molecules like peptides and ADCs, the CRO (Contract Research Organization) industry is expected to see an earnings recovery in 2026.