Orient Securities (DFZQ) released a research report stating that on December 7, China's National Healthcare Security Administration (NHSA) unveiled the 2025 National Reimbursement Drug List (NRDL) and the first commercial health insurance innovation drug catalog in Guangzhou, Guangdong. The updated lists will take effect on January 1, 2026. The NHSA strongly encourages high-quality development of innovative drugs, with increasingly clear supportive policies on the payment side. Domestic innovation drug leaders are now entering a commercialization cycle. Key takeaways from Orient Securities are as follows:
**Stable NRDL Negotiations Firmly Support Innovation, Policy Risks Likely to Ease** A total of 127 out-of-list products participated in the 2025 NRDL negotiations, with 114 new drugs added—50 of which were Class 1 innovative drugs, accounting for a record 44% share. The overall negotiation success rate reached 90%, the second-highest in seven years, while the success rate for declared drugs stood at 18% (up 2.5 percentage points YoY). Although the average price cut has not been disclosed, historical trends suggest it may remain around 60%. However, given higher initial pricing for new drugs and pre-existing discount programs, the nominal price reduction does not necessarily reflect actual commercial pressure. Orient Securities believes this year’s negotiations demonstrate stable support for innovation, with price cuts no longer the primary concern, potentially easing policy risk assessments.
**Market Differentiation Accelerates, Domestic Innovation Leaders Emerge** For China’s innovative drug industry, the NRDL represents the largest domestic market. The 2025 list highlights a concentration effect, with a few leading domestic firms contributing most newly added drugs. Hengrui Pharmaceuticals emerged as the biggest winner, securing 20 innovative drugs/indications—10 of which were first-time inclusions, including seven Class 1 drugs. Key products like HER2 ADC and JAK1 inhibitors entered commercialization. Innovent Biologics followed with seven drugs (six new additions), five of which were partnered or exclusively commercialized. Akeso Biopharma saw all five approved indications of its marketed drugs included, while Kelun-Biotech’s Trop2 ADC, sacituzumab, had two indications added.
**Tirzepatide’s Inclusion Doesn’t Disrupt Weight-Loss Market Logic; siRNA Challenges mAbs** Eli Lilly’s potential blockbuster tirzepatide (for type 2 diabetes) was included, raising concerns about intensified competition in China’s GLP-1 market. However, Orient Securities notes its reimbursement is strictly limited to diabetes, leaving little room for off-label weight-loss use. Long-term, China’s GLP-1 landscape remains clear: therapeutic indications like diabetes will enjoy insurance coverage, while the self-paid weight-loss segment is still nascent. Separately, Novartis’ siRNA drug inclisiran debuted in the NRDL for hypercholesterolemia, posing a challenge to PCSK9 monoclonal antibodies.
**First Commercial Insurance Catalog Launches "New Golden Decade" for Innovation Drugs** The inaugural commercial insurance catalog features three highlights: 1) Only 19 of 121 reviewed drugs made the cut, far fewer than the average 41 in city-specific "Huiminbao" programs; 2) All five domestic CAR-T therapies and two Alzheimer’s drugs were included, signaling recognition of high-value innovations; 3) Oncology dominated with 14 of 19 listings (74%). Orient Securities views this as an initial step, expecting catalog rules and pricing negotiations to mature gradually, backed by government support for complementary insurance policies.
**Risks**: Unexpected healthcare policy changes, intensified drug competition, and underperforming sales.
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