The mechanisms of the access, price adjustment and exit for innovative CPM and generic CPM can be summarized as Fig. 1. Each mechanism is presented in details as below.

Fig. 1

Market access of CPM products: innovative CPM vs. generic CPM

Mechanism of new entry of innovative brand CPM products into the national reimbursement list: Price negotiation

For innovative brand CPM products (or so-called exclusive CPM products in China), which usually have no competitor drugs and have not been included into the reimbursement list before, the NHSA established the new entry mechanism to manage the access application of innovative brand CPM products. The focus of this new entry mechanism is price negotiation.

To apply for price negotiation, the CPM firms need to submit a series of safety, efficacy (effectiveness) and pharmacoeconomics documents about their innovative brand CPM products, including:

  • Basic information (such as general name, time to market at home country and abroad, main indications, brief usage and dosage, and indications to be negotiated for access, etc.);

  • Safety documents (such as RCT or adverse reactions in the real-world, etc.);

  • Effectiveness documents (such as main clinical outcome indicators, differences in efficacy (effectiveness) compared with similar drugs or therapies, and clinical guidelines recommendations, etc.);

  • Pharmacoeconomics documents (such as overall results of cost-effectiveness analysis, overall results of budget impact analysis, current domestic and foreign prices, charity donation plans, comparison with reference drug prices and total direct medical cost, and domestic and foreign medical insurance access, etc.);

After receiving the application documents, the expert panels organized by the NHSA will evaluate the clinical and pharmacoeconomics documents submitted by the CPM firms. Moreover, the expert panels will carry out evidence-based pharmacy evaluation, cost-effectiveness analysis, and budget impact analysis by themselves and generate independent report and recommended price.

With the independent report and recommended price, the representatives of the NHSA will meet the representatives of the CPM firms fact-to-face to negotiate the price. If the price proposed by the CPM firms fall into the range of the recommended price set by the expert panels, a final reimbursement price will be reached. Otherwise, the price negotiation will fail and the innovative brand CPM product will not be included into the national reimbursement list.

Mechanism of price adjustment of innovative brand CPM products within the national reimbursement list: Price re-negotiation

Except the mechanism of new entry to include innovative brand CPM products into the national reimbursement list, the NHSA realizes that it also needs to dynamically manage the innovative brand CPM products that have been listed in the national reimbursement list. Therefore, the NHSA established the mechanism of price change to implement dynamic adjustment of price or payment scope of innovative brand CPM products within the national reimbursement list. According to the regulation of the NHSA, such kind of mechanism is applied for three types of situations, including:

  1. 1.

    Negotiated drugs that are within the valid period of the agreement and need to re-determine the payment standard in accordance with the agreement.

  2. 2.

    Drugs that are necessary to adjust the scope (treatment field) of payment, according to the firm application or expert evaluation.

  3. 3.

    Drugs whose prices/expenses are obviously higher and that have taken up a large amount of healthcare security funds in recent years, compared with other drugs in the same treatment field.

The focus of such mechanism is price re-negotiation. The whole process is similar with that of new entry of innovative brand CPM products: first, CPM firms need to submit documents about basic information, safety, effectiveness, and pharmacoeconomics evaluation, et; second, the NHSA will organize expert panel to conduct independent evaluation to generate evaluation report and recommended price; third, the NHSA representatives and firm representatives will have face-to-face negotiation to reach an agreement price if negotiation succeeds.

For example, in 2020 six CPM products within the national reimbursement list have proceeded price change mechanism to remain in the national reimbursement list (see Table 1). Before re-negotiation, each of the six CPM products had cost more than 1 billion CNY in the healthcare security system every year. Through price re-negotiation, it is expected the national healthcare security system can save about 50% funding for the six CPM products.

Table 1 CPM products re-negotiated within the national reimbursement list (2020)

Mechanism of generic CPM products into healthcare security system: mass procurement for entry/price adjustment

For generic CPM products that are manufactured by several companies, mass procurement is the mechanism for them to get access to healthcare security system, including new entry into the healthcare security system and making price adjustment. In practice, responding to the call for mass procurement application publicized by the healthcare security department, manufacturers can submit their bidding documents by indicating their bidding price and supply capacity. The healthcare security department will compare the bidding price submitted and usually select the 2-3 manufactures with the lowest price as final CPM product suppers.

Different from the centralized drug procurement organized by the central NHSA for generic chemical drugs, currently mass procurement for generic CPM products is only organized at provisional or city level. The reason is that the NMPA has only founded the consistency evaluation regulation for generic chemical drugs. Because CPM products still face the challenges of clarifying composition, the NMPA is still unable to organize consistency evaluation for CPM products. Consequently, the NHSA decided to leave the mass procurement to provisional level or city healthcare security departments.

Mechanism of exit from the national reimbursement list: direct removal

For the CPM products that have been included into the national reimbursement list, the NHSA also established the mechanisms of direct removal to enable dynamic adjustment to eliminate the unsuitable drugs. Such kind of mechanism applies for two kinds of conditions:

  1. 1.

    Drugs of which the drug approval documents have been revoked or cancelled by the NMPA;

  2. 2.

    Drugs of which the risk is considered to be greater than the benefit after comprehensive evaluation of their clinical value, adverse reactions, pharmacoeconomic value, and other factors.

To implement of the exit mechanism, the NHSA annually scans the reimbursement list with reference to the official announcement of the NMPA, the reimbursement data of provisional SSAs, the adverse reaction reports from the NMPA and hospitals, etc., in order to identify the CPM products of potential concerns. Then, the NHSA will organize specific expert panel which may compose of clinical experts, clinical pharmacy experts, and pharmacoeconomics experts to carry out systematic evaluation based on the current evidence available without any input from the CPM firms. If the final benefit-risk report is negative, the CPM product will be directly removed from the reimbursement list without interactions with the CPM firms.

For example, in the national reimbursement list (2000), three CPM products were directly removed through such mechanism (see Table 2). Coptis Phellodendron Burn Ointment and Ginseng Astragalus Eleven Flavor Tablets/Capsules were removed because the manufacturers no longer existed. While Loquat Leaf Cream still has 15 production approvals, it is directly removed because its clinical value is deemed inadequte and it can be replaced by other drugs with equivalent or better curative effect in the reimbursement list.

Table 2 CPM products directly removed from the national reimbursement list (2020)

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