CHINA Law and Practice Contributed by: Alan Zhou, Coco Fan, Kelly Cao, Stephanie Wang and Rae Zhang, Global Law Office
otherwise set in reference to the prices of the same products in other countries. However, the NHSA does monitor drug prices at home and abroad for the purpose of making timely warnings of any abnormal changes to drug prices and supply. Prices in other countries might also be used as reference points dur- ing negotiations between the NHSA and drug suppli- ers with respect to BMI funds coverage. 8.3 Reimbursement From Public Funds China is progressively developing a nationally unified medical insurance reimbursement catalogue and is also expanding the scope of medical consumables The National Reimbursement Drug List (NRDL) is, as a general rule, updated annually and jointly issued by the NHSA and the Ministry of Human Resources and Social Security (MOHRSS). Under the NRDL, pharma- ceuticals are classified into Class A and Class B, with each class being reimbursed differently by the BMI funds. BMI payment must be made only where the diagnosis, treatment and the patient’s condition are consistent, and where the use conforms to the indi- cations specified in the drug’s legally approved label- ling and to the scope of payment subject to restric- tions under the NRDL. Unless covered by commercial health insurance, patients assume full costs for drugs excluded from the NRDL. Medical Devices included therein. Pharmaceuticals Medical consumables may be considered “diagnosis and treatment items” or parts of these items for BMI funds reimbursement purposes. Certain local health- care security administrations at the provincial level have promulgated effective lists of medical consuma- bles that local BMI funds can reimburse. 8.4 Cost-Benefit Analyses Pharmaco-economic analysis would be employed when assessing which drugs are to be included in the NRDL and the price for NRDL negotiations; patient affordability, clinical needs, therapeutic value, inno- vativeness and market competition will also be con- sidered when determining a medical insurance fund- affordable price. Pharmaco-economic materials may be required to be submitted by applicants to add a
drug to the NRDL or to adjust its reimbursement cov- erage. A cost-benefit analysis would also be considered when assessing which medical consumables are to be covered by BMI funds. 8.5 Regulation of Prescriptions and Dispensing by Pharmacies Physicians and pharmacists must follow the principles of safety, effectiveness and economy when issuing or dispensing prescriptions. A physician may decide what drugs are to be pre- scribed based on the physician’s professional judge- ment that the prescription is rational and appropriate to a patient’s condition. In no event will the prescrip- tion be formulated by artificial intelligence (AI). The quantity of drugs that a physician may prescribe is specifically limited for each prescription, to avoid wasting medical resources or taking advantage of the BMI funds. Government policies may affect or guide a physician’s prescription decisions. • The BMI funds indirectly require physicians to consider the BMI budget when prescribing drugs and to use medical consumables reimbursed by the BMI funds. • Hospitals are required to prioritise drugs and medi- cal consumables that are centrally procured. • The NHSA actively explores reforms to payment methods for both inpatient and outpatient services, with a view to establishing a new, diversified and composite medical insurance payment framework based on diagnosis-related group (DRG) payment methods and the big data diagnosis-intervention package (DIP), and will pressure hospitals to con- trol medical expenses that may influence physi- cians’ prescription behaviours. The NHSA contin- ues to strengthen intelligent review and monitoring of DRG and DIP payments. • Medical institutions (mainly the tertiary-level public hospitals) are required to conduct dynamic moni- toring and early warnings on physicians’ prescrip- tions, promptly intervene in irrational medication use, and implement the evaluation results of
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