context: Industry insiders believe the recent approval of the 'Implementation plan for comprehensive support of innovative drug development' by the State Council aims to advance high-quality development in the biopharmaceutical sector. However, challenges still remain. Wu Ming 吴明 Peking University School of Health Science Health Policy and Technology Evaluation Centre director spoke at Asia Bo'ao Forum global health subforum on 16 July.
Among the innovative drug development chain, market launch and pricing are the two most important stages for innovative drug companies, argues Wu Ming 吴明 Peking University School of Health Science Health Policy and Technology Evaluation Centre director.
There are two types of incentive policies
- push policies
- include R&D, review and approval and patent protection
- pull policies
- determine the post-launch price
- innovative products usage
- market returns and innovation motivation
This is due to conflicting interests among stakeholders. Some policies addressing existing issues (e.g. drug and medical consumables procurement and payment method reforms) conflict with innovation incentives due to departments prioritising other responsibilities. The pharmaceutical sector faces what Wu called a challenging ‘impossible triangle’
- high R&D costs
- due to significant investment, long cycles and high risks in developing innovative drugs
- pharmaceutical companies seek to maintain monopolistic high prices for sufficient returns and future innovation incentives
- healthcare coverage
- healthcare insurance as the primary payer aims to reduce patient burden and ensure fund sustainability
- often negotiating prices lower than those set by pharmaceutical companies
Zhou Xiaping 周霞萍 China Association of Enterprises with Foreign Investment R&D-based Pharmaceutical Association Committee executive committee vice chair cited data from a 2022 survey on ‘Policy concerns regarding negotiated drug access’ conducted across 51 hospitals. The top three cited reasons for difficulty in hospital drug access are
- total medical insurance control: 90 percent
- drug number limitations in the catalogue: 88 percent
- proportion of essential drugs evaluated: 84 percent
Wu emphasised the importance of incorporating innovation incentives into each policy link as a primary goal
- procurement
- focus on freeing up medical insurance funds to quickly include innovative drugs
- establish a premium mechanism based on different clinical values and adjust rules to prioritise quality and efficacy
- medical insurance payment reform
- balance the control of costs with the need to provide and enhance care for complex conditions, improve quality and use innovative medical products