Caixin
Feb 23, 2017 04:56 PM
BUSINESS & TECH

China Updates List of Drugs Eligible for Insurance Reimbursement

(Beijing) — Beijing on Thursday published a new edition of a catalog of drugs eligible for reimbursement under government-backed insurance plans, boosting the number of approved medicines by 15.4% as it updated the list for the first time in seven years.

The new catalog lists 2,535 drugs, up from 2,196 in the previous version, published in 2009, according to a statement on the Ministry of Human Resources and Social Security of the People’s Republic of China website.

Among the drugs in the updated catalog, 1,297 are Western and the other 1,238 are Chinese.

“The 2017 catalog is made up four components: drugs from the previous index, Western medicines, Chinese processed medicines and Chinese unprocessed medicines,” the ministry said in a statement. It added the list was compiled after extensive consultations with various industry experts.

Inclusion on the list can mean big profits for drug companies since their products become available for reimbursement under the government health insurance plans that cover most Chinese citizens.

“This is big news for the industry, and could affect a lot of pharmaceutical company stocks,” said Zhang Jinghan, an analyst at CEBM Group, a subsidiary of Caixin Insight Group. “If you weren’t on the list in the past, you couldn’t get reimbursed. So for companies that got included on the list, this will be big.”

Zhang added that the 15% increase in drugs on the list was generally larger than most industry watchers were expecting, indicating Beijing is moving more aggressively to make a wide range of drugs available to treat the vast majority of Chinese who get their insurance through government plans.

Shares of pharmaceutical companies finished broadly higher on optimism that many would benefit from having new drugs included on the list, bucking a 0.4% decline for the Hang Seng Index in Hong Kong and a 0.3% drop for the Shanghai composite. Fosun Pharmaceutical’s Shanghai shares gained 1.2%, while shares of Hong Kong-listed drug distributor Sinopharm gained 0.6%.

Contact writer: Yang Ge (geyang@caixin.com)

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