Coinciding with the International Rare Diseases Day 2023, Frost & Sullivan (referred to as "Frost & Sullivan") and the Beijing Pain Challenge Public Welfare Foundation (referred to as "Pain Challenge Foundation") jointly released the "2023 China Rare Diseases Industry Trend Observation Report". The report aims to review and sort out the development of rare diseases in China in terms of diagnosis, medication, support, special medical foods, and innovative services. It outlines the problems faced and progress made in this field over the past, and makes prospects for China's comprehensive rare diseases service system. It is hoped that this will be helpful to policymakers, advocates, practitioners from relevant institutions, family members of patients with rare diseases, and the general public who are concerned about rare diseases in China.
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Improvement in access to rare disease medications
70% of treatment drugs are covered by medical insurance
Rare disease drug research and development costs are high, and conducting clinical trials is difficult. Previously, orphan drugs overseas rarely considered being filed for approval in China, and there were very few domestic pharmaceutical companies dedicated to rare disease drug research and development. Patients with rare diseases in our country have long faced the dilemma of 'having drugs overseas but no locally available ones.' To address the urgent medication needs of patients with rare diseases, the Chinese government has introduced a series of policies and measures to encourage the research, development, and market launch of rare disease drugs, and has made certain progress in enriching the variety of rare disease drugs. In the past five years, the number of rare disease drugs launched in China has shown a clear upward trend.As of now, based on the 'First Batch of Rare Diseases Catalogue', 103 drugs have been launched in China, covering 47 rare diseases; among them, 73 drugs have been marketed and included in medical insurance in China, involving 31 rare diseases.
Among the seven new rare disease drugs added to the national medical insurance negotiation in 2022, the first innovative drug for neuromyelitis optica spectrum disorder (NMOSD), enantio-imipramine injection, was included in the medical insurance. The oral drug risdiplas for spinal muscular atrophy (SMA) has also successfully entered the medical insurance catalog. For SMA patients, this means a shift from "having no available drugs" to "having multiple options." The medication environment for rare disease patients in China continues to improve.
02
Under the new policy environment
The exploration of local rare disease protection mechanisms has entered a new era
Local governments have actively explored mechanisms to ensure access to rare disease medications, focusing on providing coverage for high-value innovative drugs not included in the catalog. To some extent, this has alleviated the economic burden on patients who need these high-value rare disease drugs. After years of practice, local rare disease medication guarantee mechanisms have gradually formed representative models such as the 'special fund' model represented by Zhejiang and Jiangsu, the 'major illness insurance' model represented by Shandong and Chengdu, and the 'medical assistance' model represented by Foshan. Local governments have actively explored and supplemented the insufficient coverage of basic medical insurance for high-value innovative rare disease drugs, providing practical cases for formulating special policies for rare diseases at the national level.
In January 2021, the National Healthcare Security Administration and the Ministry of Finance issued the 'Opinions on Establishing a Medical Security Benefit List System'. The introduction of the benefit list system has further standardized and required local policies regarding rare disease medication protection, especially those at the local level. Localities are not allowed to establish other medical security systems beyond the basic institutional framework, and all regions must strictly implement the national basic medical insurance drug catalog. Subsequently, the pace of local exploration of rare disease medication protection mechanisms slowed down significantly. Many of the protection models proposed by local governments for innovative drugs for rare diseases outside the medical insurance catalog have faced adjustments and further standardization.
With a series of institutional arrangements such as the treatment list further standardizing local rare disease protection policies, the exploration of local rare disease protection mechanisms has entered a new era under the new policy environment. Under the new circumstances, inclusive insurance and charitable assistance have also become new directions for exploring local rare disease protection mechanisms.
New Direction 1Inclusive insurance has become a practical and feasible local exploration path
The inclusive supplementary commercial health insurance, commonly referred to as Inclusive Insurance, People's Welfare Insurance, or Urban Customized Insurance, is usually led or guided by the government and underwritten by insurance companies. It provides supplementary medical security for individuals who are enrolled in the basic medical insurance within a certain region. In 2022, more than 250 insurance products have been launched across various regions. Inclusive Insurance will become one of the important entities for covering innovative drugs for rare diseases outside the catalog.
In the future, under the guidance of government departments, inclusive insurance products will gradually achieve standardized and unified insurance liabilities for different products within specific regions, especially in terms of the design of special insurance liabilities for rare diseases. On one hand, through inclusive insurance drug negotiations, high-value drugs for rare diseases that are already on the market in China but not covered by medical insurance will be dynamically included, partially meeting patients' access to medication; on the other hand, through policy requirements, the claim limits, reimbursement ratios, and pre-existing condition requirements for inclusive insurance products related to rare disease liabilities will be determined. This ensures sustainable development of inclusive insurance while partially meeting patients' continuous need for standardized medication.
New Direction 2The power of public welfare and charity has become a 'new proposition' to solve the challenges of security
Improving the medication security for rare diseases also requires coordinated efforts from the government and society. In recent years, public welfare and charitable organizations in China have made a series of efforts to ensure medication security for rare diseases: whether it is patient organizations or foundations, they are trying to alleviate patients' medication burdens by carrying out assistance programs targeting patients; in addition, other stakeholders related to 'medication,' including pharmaceutical companies and medical institutions, are also actively working through Patient Assistance Programs (PAPs) to respond to patients' medication needs; as patients and their families, mobilizing relatives and friends for mutual assistance is also a common self-help measure.
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New Trends in the Future Payment Guarantee for Rare Diseases
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Risk Sharing Agreement
When underwriting companies design specific rare disease insurance liabilities or lists of rare disease drugs for special medicine coverage, the main types of RSA are as follows: One is through 'agreed usage numbers' for risk sharing, meaning that if the cost of drug claims exceeds the agreed amount or subsidy limit, the underwriting company can require the manufacturer to pay the excess or return a certain proportion of the costs; the other is through 'agreed sharing ratios' for risk sharing, where the underwriting company and pharmaceutical companies agree on the proportion of claims for patients using specific drugs, such as the underwriting company bearing 80% and the company bearing 20%.
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Payment based on efficacy
In May 2019, Beijing Jianyibao Technology Co., Ltd. joined hands with China United Life Insurance Co., Ltd. and Sanofi to launch a disease protection program exclusive for multiple sclerosis patients - the 'Jielibao' Multiple Sclerosis Patient Protection Plan (hereinafter referred to as 'Jielibao'). Jielibao provides financial support based on the characteristics of Disease Modifying Therapy (DMT) drugs. Patients who continue to use Tecfideria tablets (trade name: Ombalite) under medical advice for 3 months, after a 90-day waiting period, can apply for coverage if they experience an acute relapse and are hospitalized.
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Rare Disease Seed Fund
On this basis, the Rare Disease Seed Fund platform operates independently, bearing its own operational costs. At the same time, it returns the principal and interest lent to the national finance and local medical insurance within the agreed period, ensuring that the lender of the principal does not suffer any loss. The seed fund will actually become an important leveraging platform, attracting resources from all parties for rare disease protection.
About Frost & Sullivan's Healthcare Practice
The Frost & Sullivan Healthcare Practice has professional analytical capabilities and extensive project experience in the life sciences field. Leveraging Frost & Sullivan's global think tank resources and cross-industry business development platform in Greater China, Frost & Sullivan Healthcare has unique core advantages in healthcare industry investment and financing services. Frost & Sullivan Healthcare has a wide range of corporate clients in China and has established a vast client network over the past 20 years, accumulating significant project experience across various healthcare sub-sectors.
Project types include Knowledge Center projects (in-depth content, promotional activities), Pre-IPO projects (DCF valuation, business plan services), IPO listing projects (industry consulting, clinical audit, fundraising and investment writing), market research, market value management, and strategic consulting. We also cooperate with well-known domestic and international information platforms and investment and financing institutions to provide one-stop solutions for enterprises in specialized sub-fields such as pharmaceuticals and medical devices, attracting widespread attention from investors.
