Negotiations on Drug Prices in China and Health Insurance Sustainability: Retrospective and Future Trends

Objective: This study examines the drug price negotiation process in China from 2017 to 2023, with a particular focus on its impact on drug pricing, especially for innovative therapies, and its influence on healthcare affordability and the sustainability of the health insurance system.Material and Methods: Data were sourced from public reports and official announcements by the National Healthcare Security Administration (NHSA). A mixed-method approach was employed, combining quantitative analysis of price reductions, success rates, and healthcare expenditure with qualitative insights into policy challenges, focusing on high-cost treatments like oncology drugs and innovative therapies.Results: From 2017 to 2023, price negotiations led to average reductions of 50-62%, with oncology drugs experiencing a maximum price reduction of 94%. The efficiency of negotiations improved significantly, with a success rate of 85% by 2023. These reductions enhanced access to costly treatments, particularly cancer therapies, but rising demand for innovative treatments continued to strain the healthcare budget. The inclusion of more high-cost therapies in the National Reimbursement Drug List (NRDL) further contributed to the growth in expenditure. Additionally, the proportion of domestically produced drugs in negotiations increased from 39% in 2021 to 69% in 2023, reflecting efforts to enhance self-sufficiency.Conclusion: Negotiations on drug prices in China have effectively reduced drug prices and improved access to critical therapies, such as innovative and life-saving treatments. However, ongoing demand for innovative treatments poses challenges to the financial sustainability of the health insurance system. Further improvements in value-based pricing and regulatory frameworks are needed to maintain affordability and foster innovation.