China restores support for private insurance for expensive drugs
A healthcare law adopted in China last month restores direct support for private health insurance. The document, which is due to take effect next year, could help narrow the gap between the capabilities of the basic insurance system and the cost of new expensive medicines.
As Taipei Times writes, citing a Bloomberg Opinion column, basic health insurance in the country covers about 95% of the population. At the same time, even with coverage, patients may pay roughly 30% of treatment costs themselves.
Limits of state coverage
The state system is funded mainly by payroll contributions from urban workers, while for other population groups it relies on a combination of personal payments and government subsidies. Expensive treatments on the reimbursed medicines list compete with cheaper and more widely used drugs.
China has traditionally secured significant price cuts from manufacturers in exchange for access to the large state insurance market. However, due to budget constraints, newer and more effective medicines that have become standard therapy in wealthier countries remain inaccessible to many patients in China.
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In particular, Merck & Co's cancer drug Keytruda has a share of less than 15% in the Chinese market because it is not included in the state reimbursement list, said Rebecca Liang, a senior analyst for Chinese biopharmaceuticals at Bernstein SG.
Opportunities for private insurance
According to an industry study, private health insurers paid for 7.8% of spending on innovative medicines and medical devices in China last year. Patients themselves covered nearly 46% of costs, while the state sector paid the rest.
Last year, China published its first list of two dozen expensive medicines, including treatments for cancer and Alzheimer's disease, that are not paid for by the state system. The list provides for official support for their coverage through low-cost private insurance policies backed by regional authorities.
At the same time, insurers lack claims histories and access to clinical data and real-world data needed to assess the risks and cost of new treatments. The Bloomberg Opinion column states that, to develop this segment, Beijing should improve information sharing between hospitals, drug manufacturers and payers, and develop mechanisms for sharing the costs of particularly expensive therapies.
