China's New Commercial Health Insurance Drug List and Its Implications for Global Pharma Giants

China's healthcare system is undergoing a transformative shift with the introduction of a dual-track drug reimbursement model, offering multinational pharmaceutical firms like Eli Lilly and Pfizer a strategic pathway to unlock new revenue streams. By separating essential therapies under the National Basic Medical Insurance Drug List (NRDL) from high-cost, high-value innovations in the newly launched Commercial Health Insurance Innovative Drug List (CHIIDL), the National Healthcare Security Administration (NHSA) is addressing the tension between affordability and innovation. For global pharma giants, this reform represents both an opportunity to expand market access and a recalibration of pricing strategies in one of the world's most critical pharmaceutical markets.

A Dual-Track System: Balancing Affordability and Innovation

The dual-track system, finalized in December 2025, creates two distinct reimbursement pathways. The NRDL continues to cover essential, cost-effective drugs through aggressive price negotiations, often requiring discounts of 60% or more. In contrast, the CHIIDL targets innovative therapies-such as CAR-T cell treatments, PD-1 inhibitors, and Alzheimer's drugs-that are excluded from the NRDL due to cost constraints but hold significant clinical value. These drugs can now be reimbursed through commercial health insurance, which offers a more flexible pricing framework.

For example, Eli Lilly's Alzheimer's therapies, including Kisunla and Leqembi, and Pfizer's oncology treatments have been included in the inaugural CHIIDL list. According to a Bloomberg report, these drugs were negotiated with private insurers at discounts ranging from 15% to 50%, a far less aggressive reduction than the typical 60% required for NRDL inclusion. This pricing flexibility allows manufacturers to maintain higher profit margins while expanding access to patients who can afford commercial insurance coverage.

Strategic Opportunities for Multinational Firms

The dual-track system enables global pharma companies to adopt a "dual submission" strategy, applying for inclusion in both the NRDL and CHIIDL simultaneously or separately. This approach accelerates market access for innovative drugs that might otherwise face delays in the NRDL process. For instance, CAR-T therapies like Yikaida and Carteyva, already included in some commercial insurance programs, are now seeking broader coverage under the CHIIDL. Similarly, PD-1 inhibitors such as Opdivo and Keytruda-key products for companies like Bristol-Myers Squibb and Merck-are strong candidates for the commercial catalog.

Pfizer's recent $1 billion investment in China over five years underscores its commitment to leveraging this new framework. The company's 2030 strategy includes bringing 60 new medications or indications to the Chinese market, with a focus on oncology and partnerships with local biopharma firms like 3SBio according to a financial report. By aligning its pipeline with the CHIIDL's criteria-high innovation, clinical value, and exclusivity-Pfizer is positioning itself to capture a growing segment of China's healthcare market.

Financial Implications: Pricing, Reimbursement, and Profit Margins

The CHIIDL's pricing model introduces a critical financial advantage for manufacturers. Unlike the NRDL's rigid negotiation process, the commercial catalog allows for risk-sharing agreements, budget caps, and premium pricing for therapies with demonstrated clinical benefits. For example, CAR-T treatments, which previously faced exclusion due to their high cost, can now be reimbursed at prices closer to their international counterparts. This is particularly significant for drugs like Yikaida, which costs approximately ¥1.2 million per course in China but could see improved adoption through commercial insurance coverage according to a market analysis.

Moreover, the NHSA's decision to exclude CHIIDL-listed drugs from centralized procurement caps and DRG-based payment mechanisms further enhances their financial viability. This operational flexibility reduces the risk of price erosion, a persistent challenge for global pharma firms in China's highly competitive market.

Market Access Challenges and Risks

Despite the opportunities, foreign drugmakers must navigate several hurdles. First, the commercial insurance market in China remains small, accounting for just 3.3% of total health expenditures in 2025. While the government aims to expand this segment, widespread adoption of CHIIDL-listed drugs will depend on patient awareness, insurer participation, and regulatory alignment.

Second, the application process for the CHIIDL requires rigorous documentation, including marketing authorizations, non-infringement patent declarations, and comprehensive safety data according to the NHSA guidelines. For overseas manufacturers, this necessitates collaboration with local legal entities to meet compliance requirements. Additionally, the NHSA's emphasis on "clinical value" means companies must invest in real-world evidence studies to demonstrate the efficacy of their therapies in Chinese patient populations as research shows.

Conclusion: A Pivotal Shift in China's Healthcare Landscape

China's dual-track system marks a pivotal shift in how innovative therapies are reimbursed, offering global pharma giants a strategic foothold in a market projected to reach ¥16 trillion by 2030. For companies like Eli Lilly and Pfizer, the CHIIDL represents not just a new revenue stream but a reimagined approach to market access-one that balances regulatory compliance, pricing flexibility, and patient-centric innovation. As the NHSA rolls out the CHIIDL in January 2026, the ability to adapt to this dual-track framework will likely determine the success of multinational firms in China's evolving healthcare ecosystem.