OBJECTIVES : The Chinese National Reimbursement Drug List (NRDL) was updated with a novel price negotiation mechanism for innovative medicines in 2017 and 2018. We aim to analyze the outcomes of the negotiations, as well as the influencing factors of the price negotiation mechanism and understand its trend and implications.

METHODS : Desk research, literature review, and expert interviews were conducted. Data were summarized with descriptive statistics using frequency and percentages for categorical data and mean for continuous data. Correlation analyses were conducted.

RESULTS : A significantly shorter timeframe between market authorization and NRDL inclusion was observed in 2018 (3.1 years on average vs. 6.5 years on average in 2017). In addition, a higher price-cut was achieved (57% on average for 17 drugs) in 2018 compared to that in 2017 (44% on average for 36 drugs), and 85% of negotiated prices were lower than Taiwan in 2018 compared with 42% in 2017. Drugs with patient assistance programs (PAP) had higher price-cuts (56% on average for 24 drugs) than those without PAP (33% on average for 21 drugs). Oncology drugs were generally associated with a higher price-cut than non-oncology western drugs (50% on average for 32 drugs vs. 28% on average for 16 drugs) due to higher prices and PAPs etc. For the 17 oncology drugs in the 2018 negotiation, the drug’s monthly cost was positively correlated with price-cut level both in the controlled PAP (r=0.68, P<0.01) and non-controlled PAP scenarios (r=0.78, P<0.01).

CONCLUSIONS : Recent practice indicates that negotiation is likely to become a regular mechanism in further NRDL dynamic updates for innovative medicines in China. Price is the key factor to determine whether the medicines would be reimbursed. Therapeutic area, reference prices of neighboring regions, and an oncology drug’s monthly cost would potentially influence the price-cut level during negotiation.