Further Boost for Medical Insurance Access Support—New Opportunities for Ethnic Medicines

　　At the Fourth Session of the 13th National People's Congress in 2021, several deputies put forward proposals to include ethnic minority medicines in the medical insurance system. Among them, seven deputies including Lei Jinyu proposed lowering the threshold for including ethnic minority medicines in the National Medical Insurance Catalogue, while Deputy Jiang Tianliang suggested including Tujia medicine and Miao medicine within the scope of medical insurance reimbursement.

　　On September 22, the National Healthcare Security Administration released its response to the above-mentioned proposals. The reply stated that ethnic medicine is an important component of China’s traditional medicine and outstanding national culture. It represents the accumulated experience and wisdom of various ethnic groups in their long-term struggle against disease, and continues to play an irreplaceable role in improving the health of the people and promoting economic and social development.

　　Currently, a number of ethnic medicines have been included in the scope of reimbursement. Given that ethnic medicine is primarily guided by traditional ethnic medical theories and exhibits strong regional and specialized characteristics in its application, provincial medical insurance authorities may, based on the National Drug List and in accordance with the adjustment powers and procedures prescribed by the state, include eligible ethnic medicines and other relevant items into the provincial medical insurance reimbursement scope. In the next step, the National Healthcare Security Administration will further refine the dynamic adjustment mechanism for the medical insurance drug list and, following due procedures, incorporate eligible ethnic medicines and medical treatment services into the scope of medical insurance reimbursement.

　　In this regard, Shi Lichen, founder of Beijing Dingchen Pharmaceutical Management Consulting Co., Ltd., recently pointed out in an interview with the 21st Century Business Herald: “The official response from the National Healthcare Security Administration has created an opportunity for the development of traditional Chinese medicines that have undergone extensive clinical verification and demonstrated clear efficacy. The most direct impact will be a boost in sales of these traditional Chinese medicines, which can help sustain the continued growth of the industry.”

　　On the 26th, a senior official from Qizheng Tibetan Medicine, in an interview with the 21st Century Business Herald, also stated that including high-quality ethnic medicines in the medical insurance system will provide more treatment options for a wider range of patients and offer them greater hope for recovery. This not only further demonstrates the country’s commitment to putting people’s health at the center of its policies but also reflects the nation’s efforts to promote traditional ethnic cultures and provide greater support for the ethnic medicine industry. “We suggest that, during the annual dynamic adjustment of the National Medical Insurance Catalogue, ethnic medicine products included in clinical practice guidelines and expert consensuses for ethnic medicine, traditional Chinese medicine, and Western medicine should be allowed to apply for inclusion and participate in the review process. This would give ethnic medicines that can demonstrate clinical efficacy, safety, and cost-effectiveness the opportunity to be added to the National Medical Insurance Catalogue and serve a broader patient population.”

　　According to reports, during the 2020 national medical insurance negotiations, Qizheng Tibetan Medicine’s exclusive products, Honghua Ruyi Pills and Ruyi Zhenbao Tablets, were included in the National Medical Insurance Catalogue for the first time. Both products are derived from classic Tibetan medical texts and possess unique clinical value.

　　In fact, various regions are actively exploring the inclusion of certain qualified Chinese medicinal herbs and ethnic medicines into the medical insurance system. On August 31, the Medical Insurance Bureau of the Guangxi Zhuang Autonomous Region announced that, building on the national drug catalog’s 892 Chinese medicinal herbs, it would extend coverage to 531 additional Chinese and ethnic medicinal herbs in Guangxi, bringing the total number of herbs eligible for reimbursement under the three major insurance schemes to 1,423. Yunnan, Xinjiang, and other regions have also indicated that more ethnic medicines and Chinese medicinal herbs will be included in medical insurance coverage in the next phase.

　　Policy support

　　Since the launch of the new healthcare reform in 2009, the national medical insurance system reform—aimed at achieving universal health coverage—has played a pivotal role in driving the development of the industry. However, many challenges remain in fully leveraging the advantages of traditional Chinese medicine.

　　From 2000 to 2009, the number of ethnic medicines included in the National Medical Insurance Catalogue showed negative growth. The 2000 edition of the catalogue listed 47 ethnic medicines, while the 2009 edition had reduced this number to 45. In earlier editions of the medical insurance catalogue, both Western and traditional Chinese medicines saw substantial increases, whereas the compound growth rate for ethnic medicines was -2.15%.

　　As of 2010, Ju Honghua, a member of the National Committee of the Chinese People's Political Consultative Conference and deputy director of the Mongolian Medicine Hospital in Ulan County, Haixi Mongol and Tibetan Autonomous Prefecture, Qinghai Province, proposed including ethnic medicine in the national medical insurance system. She argued that ethnic medicines not only have advantages in treating chronic and serious illnesses but often also offer excellent cost-effectiveness, which can greatly help reduce the proportion of drug expenses and meet the needs of healthcare system reform.

　　Since then, the development of ethnic minority medicine has received attention and support at the national policy level. “Supporting the development of traditional Chinese medicine and ethnic minority medicine” was explicitly mentioned for the first time in the report of the 17th National Congress. This policy has been carried forward, with references to supporting the development of traditional Chinese medicine and ethnic minority medicine appearing in both the reports of the 18th and 19th National Congresses.

　　In 2018, 13 government departments—including the National Administration of Traditional Chinese Medicine and the State Ethnic Affairs Commission—jointly issued the "Several Opinions on Strengthening Minority Ethnic Medicine Work in the New Era." The Opinions propose that by 2030, a relatively comprehensive health service network for minority ethnic medicine should be established in ethnic regions, enhancing health service capacity, improving the talent-training system, raising the level of industrialization, perfecting the standardization system, strengthening international exchanges, and comprehensively preserving and protecting minority ethnic medicine.

　　Following the introduction of a series of policies aimed at supporting traditional medicines of ethnic minorities, these ethnic medicines were once hailed as the next “gold mine.” However, the process of including ethnic medicines in the national medical insurance system has been slow, which to some extent has constrained the development of these medicines. In July 2020, the National Healthcare Security Administration issued the “Provisional Measures for the Management of Drugs Covered by Basic Medical Insurance” (Order No. 1 of the National Healthcare Security Administration), outlining the principles, conditions, and procedures for adjusting the national medical insurance drug list. The national medical insurance drug list will be dynamically adjusted annually, providing more opportunities for ethnic medicines to be included in the coverage.

　　Starting from March 1, 2021, the new National Medical Insurance Drug List has been officially implemented. The list includes a total of 2,800 drugs: 1,426 Western medicines and 1,374 traditional Chinese medicines, with the ratio between Western and traditional Chinese medicines being roughly balanced. Among these, 892 traditional Chinese medicine granules have been included in medical insurance coverage. As for Tibetan medicines, the number has reached 43, marking a significant increase in the inclusion of ethnic medicines in the medical insurance system.

　　The "Interim Measures for the Management of Drug Use under Basic Medical Insurance" also clarifies the relevant authorities: Provincial medical insurance departments may, based on the National Drug List and in accordance with the adjustment authorities and procedures prescribed by the state, include eligible ethnic medicines, pharmaceutical preparations developed by medical institutions, and traditional Chinese medicine granules into the scope of provincial medical insurance reimbursement.

　　Innovative development

　　Despite being clinically validated and demonstrating clear therapeutic efficacy, it remains challenging to broadly expand the use of traditional ethnic medicines now that they are covered by medical insurance.

　　Drugs included in medical insurance reimbursement often experience a qualitative leap in sales performance. Meng Lingwei, an analyst at Galaxy Securities, pointed out: “If domestically developed innovative drugs are included in medical insurance, they can achieve volume growth at the expense of price reductions, bringing forward their peak sales and highlighting their profitability. The accelerated expansion of sales through medical insurance channels amplifies the positive feedback loop of ‘innovation—accelerated access to medical insurance—rapid market launch of new products—profit enhancement—deepened innovation.’ After being added to the medical insurance catalog, the peak sales for innovative drugs will come sooner; what previously took 7 to 10 years to reach may now be achieved in just 3 to 5 years.”

　　With the state’s increasing support for the ethnic medicine industry, many manufacturing enterprises have grown to a sizable scale. The previously fragmented and small-scale development pattern is now shifting toward a more intensive, concentrated model. Particularly in the face of difficulties in reviewing and approving new dosage forms of ethnic medicines, many companies have turned their attention to the research and development of innovative new products. Innovation in ethnic medicines is the fundamental driving force behind the industry’s continued development.

　　Industry insiders say that ethnic medicines are poised to open up room for growth. However, further efforts are needed to promote these minority ethnic medicines, and large-scale expansion remains challenging.

　　It is worth noting that ethnic medicines currently remain marginalized. Zhang Boli, an academician of the Chinese Academy of Engineering and a deputy to the National People's Congress, once remarked in a media interview that many experts believe the sources of ethnic medicines are relatively limited and it is difficult to cultivate them on a large scale. If ethnic medicines were overused to ensure basic medical services, the benefits might not outweigh the costs. Therefore, when expanding the national medical insurance catalog, authorities have been hesitant to broaden the inclusion of ethnic medicines significantly.

　　In this regard, there have been suggestions to include ethnic medicines within the classification of traditional Chinese medicine. However, in reality, ethnic medicines and proprietary Chinese medicines belong to entirely different medicinal systems. Lei Jufang, a member of the National Committee of the Chinese People's Political Consultative Conference and Chairwoman of Qizheng Tibetan Medicine, pointed out that if even the few existing ethnic medicines were to be incorporated into the classification of traditional Chinese medicine, it would deal a fatal blow to ethnic medicines and further diminish the industry influence of experts specializing in ethnic medicines.

　　In the future, under the dynamic adjustment mechanism for the national medical insurance drug list, certain items currently listed in provincial medical insurance catalogs—particularly those with better clinical performance and more favorable dosage forms (such as new formulations like tablets and capsules)—may be included in the updated version of the catalog. Regarding the inclusion mechanism for the medical insurance catalog, Lei Jufang believes that a pool of review experts should be established. Furthermore, the section on ethnic medicines in both the national and local medical insurance catalogs should be jointly reviewed by experts specializing in ethnic medicine or by experts who are knowledgeable in both ethnic medicine and traditional Chinese and Western medicine.

　　Reporting media: 21st Century Business Herald

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