CITIC Securities: Record High Success Rate in National Drug Price Negotiations; Commercial Insurance Innovation Drug List Provides Incremental Growth

CITIC Securities released a research report stating that the success rate of national drug price negotiations has reached a historic high, with the commercial insurance drug list expected to become a significant growth driver, reflecting policy support for innovative drug development. Meanwhile, China's innovative drug pipeline continues to enhance its global competitiveness, with overseas expansion models evolving and new technologies accelerating industry growth. The firm remains optimistic about related innovative drug companies and pharmaceutical enterprises.

Considering factors such as volume expansion under medical insurance support, overseas opportunities, and technological advancements, CITIC Securities favors A-share companies including **Hengrui Pharmaceuticals (600276.SH)**, **BeiGene (688235.SH)**, and **RemeGen (688331.SH)**. Key insights are as follows:

On December 7, 2025, China’s National Healthcare Security Administration (NHSA) released the *National Reimbursement Drug List (NRDL) (2025)* and the inaugural *Commercial Health Insurance Innovative Drug List*. The updated NRDL includes 114 newly added drugs covering chronic diseases, oncology, anti-infectives, rare diseases, and COVID-19 treatments, of which 50 are Category 1 innovative drugs. Post-adjustment, the total number of drugs listed reached 3,253, comprising 1,857 Western medicines and 1,396 traditional Chinese medicines.

Among the 127 out-of-list products participating in negotiations, 114 were successfully included, marking an 88% success rate—the highest in seven years. Additionally, 19 drugs were added to the first commercial insurance innovation drug list. The updated lists will take effect on January 1, 2026.

The NHSA’s sustained support for innovative drugs underscores optimism for the sector. The 88% negotiation success rate—up from 65% (2019), 73% (2020), 80% (2021), 82% (2022), 85% (2023), and 76% (2024)—reflects strengthened drug accessibility. Notably, 50 of the 114 newly added drugs are Category 1 innovations, highlighting policy emphasis on R&D. Meanwhile, 29 clinically obsolete or long-discontinued drugs were removed to maintain list efficiency.

Post-adjustment, the NRDL now covers 3,253 drugs (1,857 Western, 1,396 traditional Chinese). The updated list will be implemented from January 1, 2026.

**Risk Analysis**: Policy uncertainties, R&D delays, regulatory setbacks, sales underperformance, and international expansion challenges.