appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Julie Zhang

The State Council, China’s cabinet, has published guidelines on innovative drug pricing that a bank analyst has described as the “most significant” in a decade, as they aim to reward drug innovation and ease pricing tension for domestic and multinational pharmaceutical companies.
The framework document published this month said patented innovative drugs would be supported through value-based pricing, while the prices of generic drugs would be driven down through market competition and volume-based procurement.
Under volume-based procurement, the government buys drugs in bulk for public hospitals, putting multinational companies under intense price and competitive pressure.
The policy allows biotech companies to charge higher prices in the private market, including at private hospitals and retail pharmacies, and online.
The document also called for commercial insurance to play a bigger role in funding innovative drugs.
“This provides more profitable channels to innovative drug makers and potentially benefits internet healthcare players, pharmacies and private healthcare services, such as Alibaba Health, Yifeng and Hygeia,” John Yung, head of Asia healthcare research at Citigroup, wrote in a research report released on April 16.
Alibaba Health Information Technology – known as Alibaba Health for short – is the flagship healthcare platform of Alibaba Group Holding, which also owns the South China Morning Post.
Jiangsu Hengrui Pharmaceuticals, CSPC Pharmaceutical Group, Innovent Biologics and other multinational drug makers that sold innovative medicines in China stood to benefit from the new pricing framework, Yung said.
The Hang Seng Healthcare Index, which tracks some of China’s most innovative pharmaceutical companies, including Akeso and Innovent, climbed from 3881.91 on April 14, the day the guidelines were released, to a peak of 4060.89 before retreating to 3,909.82 by 10.20am on Wednesday – a gain of 0.72 per cent.
Hong Kong’s benchmark Hang Seng Index rose about 1.1 per cent over the same period.
In his report, Yung said the document was “landmark national guidance” and “the most significant central government guidance on drug pricing since 2015”, adding that it demonstrated “a clear government commitment to fostering a robust and globally competitive domestic pharmaceutical industry”.
It focuses more on encouraging innovations from the pricing and reimbursement angle
Bruce Liu, Simon-Kucher
Bruce Liu, senior partner at global consulting firm Simon-Kucher, said the guideline’s support of the biopharma industry’s development was “in line with the 15th five-year plan, prioritising it as a strategic pillar going forwards”.
“It didn’t specify local or multinational companies, so there is no favouritism – at least on paper – instead it focuses more on encouraging innovations from the pricing and reimbursement angle,” Liu said, adding that the goal was to encourage innovations on both the supply and demand sides, although “more specifics are yet to be seen”.
Wang Xiaoning, who oversees pharmaceutical pricing at the National Healthcare Security Administration, told a news conference last week that the administration was developing policies to let drug makers self-evaluate their drugs’ clinical value and innovation level to justify a launch price commensurate with their development costs, with price stability guaranteed for a set period.
However, Linda Shu, head of China healthcare research at HSBC, said China’s commercial insurance list for innovative drugs, introduced late last year, remained nascent.
“It will be a trend for China’s innovative drugs to grow [through commercial insurance] in the future,” she said. “But in the near term, they are still testing whether it can grow as fast as the national reimbursement list.”
Beijing listed biomedicine as an “emerging pillar industry”, alongside integrated circuits, aerospace and the low-altitude economy, for the first time in the government work report delivered to the national legislature on March 5.
Chinese biotech firms reached a record 157 agreements to out-licence early-stage drugs to global partners last year, with the deals worth a total of US$135.7 billion.


China cracks down on big firms delaying payments to cash-strapped SMEs

Veteran investor Fang Fenglei on why the China ‘investibility’ debate is no debate at all

Why Chinese shoppers are ditching supermarkets for small ‘community stores’

Mainland Chinese shoppers lose trusted Hong Kong veggie tag as customs revamp hits shelves

China’s private sector

China’s ‘landmark’ drug pricing guidelines widen biotech profit window: analysts

Chinese biotech firms reached 157 agreements to out-licence early-stage drugs last year. Photo: Shutterstock


How Chinese drug makers are tackling Western dominance in US$16 billion Parkinson’s race

Hong Kong’s Tuen Mun Hospital has for the first time in the city used a non-invasive ultrasound procedure to treat a Parkinson’s disease patient with uncontrollable tremors. Photo: Handout

Hong Kong Financial Secretary Paul Chan Mo-po (centre) attends the International Parkinson’s Disease Day 2026 Table Tennis Competition in Wan Chai on April 11. Photo: Jonathan Wong

As China’s biotech firms shift gears, can AI floor the accelerator?

Illustration by Henry Wong

While the US still holds a clear lead over China in innovative drug R&D, AI could be the game changer. Photo: Shutterstock

China accounted for about 30 per cent of the global experimental drug pipeline, according to a January McKinsey report, up from near zero two decades ago. Photo: Shutterstock

BrainCo’s brain-computer interface wows at HSBC summit with mind-controlled hand

An amputee plays an electronic keyboard using BrainCo’s AI-powered mechanic arm at the World AI Conference in Shanghai on July 27, 2025. Photo: VCG via Getty Images

BrainCo was incubated at Harvard Innovation Labs. Photo: NurPhoto via Getty Images

China healthcare stocks outgain Hong Kong market as Middle East roils global investments

A number of Chinese biopharmaceutical and biotech companies posted their first-ever annual profits in 2025. Photo: Shutterstock

A view of Exchange Square in Central, home of Hong Kong’s bourse operator. Photo: Jelly Tse

Business

China Business

Companies

News

China

China Future Tech

Biomedicine

State Council calls for ‘value-based pricing’ for innovative drugs, a move researchers said would benefit private healthcare players


State Council calls for ‘value-based pricing’ for innovative drugs, a move researchers said would benefit private healthcare players.


China’s ‘landmark’ drug pricing guidelines widen biotech profit window: analysts

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}State Council calls for ‘value-based pricing’ for innovative drugs, a move researchers said would benefit private healthcare players

State Council calls for ‘value-based pricing’ for innovative drugs, a move researchers said would benefit private healthcare players