Use of health technology assessment in drug reimbursement decisions in China
BMJ 2023; 381 doi: https://doi.org/10.1136/bmj-2021-068915 (Published 15 June 2023) Cite this as: BMJ 2023;381:e068915Read the full collection: Health Technology Assessment in China
This article has a correction. Please see:
- Wen Chen, professor1,
- Luying Zhang, associate professor1,
- Min Hu, associate professor1,
- Shanlian Hu, professor1
- Correspondence to: W Chen wenchen{at}fudan.edu.cn
Over the past two decades, China established the world’s largest social health insurance system, covering 95% of the population.1 Two social health insurance schemes, one which covers employees working in formal sectors and one which covers residents who work in informal sectors or do not work, use a unified national drug reimbursement list (NRDL), although premiums and reimbursement policies still differ across regions.
As part of a move towards universal health coverage, China has aimed to make its social health insurance system more equitable and sustainable. The social health insurance fund accounted for 37% of China’s total health expenditures in 2021, and spending continues to rise,2 reinforcing the need to ensure good value for money. Reforms of the healthcare security system from 2020 identified the social health insurance fund as a strategic purchaser of healthcare and required it to improve the efficiency of expenditure. To achieve this objective, health technology assessment (HTA) will be increasingly important to determine cost effectiveness of new drugs from multiple perspectives.3
China’s use of HTA in reimbursement decisions
The national drug reimbursement list is a key instrument defining the benefits of drugs covered by China’s social health insurance schemes. The list is determined and adjusted by the National Healthcare Security Administration (NHSA) once a year, with price negotiations part of the decision making process. Evolving alongside the development of the drug reimbursement list, HTA has been gradually embedded as a formal procedure for decisions about drug listing since 2017 (table 1).45678910
Evolution of HTA in drug reimbursement decisions in China, 2017-21
Two stage HTA appraisal process
Drug reimbursement decisions are made through a two stage process in which a quick review is first conducted for all drugs and then a detailed HTA is conducted on those that are identified as candidates for price negotiations (fig 1). In the first stage, manufacturers are required to submit briefing value dossiers using a template that summarises basic information such as price and annual expenditure, efficacy, safety, innovation, and equity information. Advisory groups, comprised of pharmacists, clinicians, health economics experts, and medical insurance experts, then assign value scores and recommend whether each drug should be added to the reimbursement list, be subjected to price negotiations, or be rejected outright. In the second stage, manufacturers of drugs recommended for price negotiation have to submit more detailed dossiers including evidence of drug efficacy, safety, innovation, international prices, cost effectiveness analysis, and budget impact analysis. Two health economics experts then separately assess the dossiers and recommend a base level negotiation price for the drug.
Application of HTA to drug reimbursement decisions in China, 2021
In 2021, from 474 applications for inclusion on the reimbursement list, 271 drugs qualified under the quick review process and 117 went through the extended appraisal. Since the reimbursement list is adjusted annually, this two stage process improves workflow efficiency while ensuring a thorough appraisal for expensive drugs.
Multidimensional evaluation and progressive evolution pathway
Learning from other countries, China considers multiple strands of evidence during health technology appraisal. Clinical benefit is evaluated through evidence of efficacy and safety, and economic value through annual costs, cost effectiveness analysis, and budgetary impact analysis. Other broad aspects such as innovation and equity are also appraised to get a comprehensive understanding of the value of drugs at both stages. The inital negotiation price for each drug is informed by proposals from the HTA appraisal group and from a parallel expert group in charge of estimating insurance fund spending.
Use of HTA in drug listing decisions has evolved over the past five years (table 1). Cost effectiveness and budget impact analyses were initially optional but became a requirement in 2018. The appraisal process was shifted from expert group discussion to a single expert appraisal, and then to separate appraisal by two experts with general guidance.
Preliminary progress
More than 270 innovative, cost effective drugs had been added to the reimbursement list by the end of 2021, with 67% of available drugs for rare diseases covered.11 HTA informed price negotiation substantially decreased drug prices, with average reductions of 44%-62% (table 1). In 2021, negotiated drugs were reimbursed 140 million times nationwide, with out-of-pocket spending on drugs by people covered by health insurance reduced by ¥149.5bn (£17bn; €20bn, $21bn) nationwide.11 These statistics suggest accessibility to and affordability of innovative drugs has improved, especially for cancer drugs.121314
Challenges applying HTA to decision making
Underdeveloped study design and insufficient basic data
In some cases, poor study designs have led to low quality evidence for HTA. For example, only 14.5% of the 380 published economic evaluations on diabetes drugs from 2001 to 2021 included a cost-utility analysis and 16.1% applied modelling approaches.15 The corresponding figures for studies of cancer drugs were 28.3% and 31.7% for 2015-19.16 HTA experts report that the proportion of economic modelling studies has been rising, but most models in submitted dossiers were developed by international experts with little adaption to local settings.
Lack of access to good quality clinical and economic evidence in China has obstructed implementation of best HTA practices. We analysed the briefing dossiers for the 95 innovative drugs considered for listing in 2021 and found that 49 did not report clinical evidence from Chinese populations and 34 did not include trials with active comparators. Our interviews with appraisal experts also indicated that local data concerning epidemiology, clinical efficacy, or real world effectiveness and health related quality of life were scant. In terms of cost analysis, the dossiers adopted data from various sources (insurance claims data, electronic medical records, surveys, fee schedules, etc) that were not necessarily representative of average costs across the country, possibly leading to biased results.
Moreover, lack of opportunity for manufacturers and the health insurance authority to engage in early dialogue on comparator selection and study methods may result in undesirable study designs in the submitted dossiers. Early consultation on study design in Australia, Canada, England, and France facilitates the efficient preparation of manufacturers’ submissions,17181920 but this mechanism has not been introduced formally in China.
Low quality and high variation of reporting
Incomplete and inaccurate reporting of data is a problem in manufacturers’ submissions. Our analysis of briefing dossiers found the data on safety and comparative effectiveness reported were often of relatively low quality (table 2). Furthermore, innovative value was derived from evidence across multiple difficult-to-quantify factors, including patents and mechanisms of drug action. The evidence on equity also varied widely. Although manufacturers are required to use a simple reporting template, there are no comprehensive guidelines on evidence submission and no formal standard and process for reviewing the quality of evidence, leading to unsatisfactory reporting.
Characteristics of the first stage briefing dossiers for 95 innovative drug submissions for 2021 drug reimbursement list
Lack of technical standards for evidence appraisal and qualified experts
Consistency in drug appraisals and calculation of recommended negotiation prices across different experts is a problem because of unclear technical standards. The value framework used to synthesise multiple related sources of evidence is not completely established and does not provide a clear method for translating different value components into a single recommended price. Furthermore, discussion is ongoing about an appropriate incremental cost effectiveness ratio threshold for decision making,2122 and the formal criteria for assessing ethics, equity, and social adaption are still being developed. To make reliable scientific judgments, technical standards for appraisal along with advanced training for analysing HTA evidence are greatly needed.
China does not have an independent national HTA agency and has sought to build a professional network to support decision making through alternative means. However, a lack of qualified experts has hindered the development of this network. Our analysis of profiles of HTA experts involved in the second stage appraisals in 2021 showed that most were from universities, with a few from research institutions, hospitals, or health insurance agencies. Around a fifth were junior level professionals with less than five years of working experience.
Limited transparency in decision making process
Transparency is important not only to inform manufacturers about the assessment and appraisal results in a fair way but to make details available to other stakeholders.182023 The lack of transparency in the reimbursement decision making process has created mystery behind listing decisions in China. Whereas England, Australia, and Canada include patient representatives and other stakeholders in the appraisal process,192324 in China, stakeholders have little access to the evidence and other related information used in listing decisions. In addition, manufacturers are given only oral feedback on appraisal results (table 3).
HTA appraisal feedback and process transparency in China and four selected countries
Recommendations
Our analysis suggests opportunities for using HTA more effectively to inform drug reimbursement decisions in China.
Improving quality of HTA evidence—Joint efforts from all stakeholders are needed to improve study designs, develop local adapted models, generate real world evidence, and comply with the reporting guidelines.
Strengthening the capacity for HTA appraisal—China needs closer collaboration among HTA research bodies at both national and international levels, and to provide more training programmes to ensure that HTA experts across disciplines possess a common language for cooperatively performing standard HTA appraisals. The performance of HTA experts should also be evaluated to identify those suitable for future appraisal.
Formulating explicit guidelines for submission and appraisal—Clear guidelines and templates for drug applications are needed to ensure high quality evidence is provided. A well defined appraisal guideline that includes a multidimensional value framework, selection of comparators, modelling methods, and principles for setting cost effectiveness thresholds is required to improve scientific rationality in the appraisal process.
Enhancing transparency of decision making—Transparency in the appraisal process could help increase quality of evidence and reduce bias. More information should be disclosed about drugs entering the negotiation stage, details of appraisal experts, listing decisions, and other related information through an official website.
Conclusion
Over the past five years, China has made great progress in applying HTA to drug listing decisions, helping balance the access to and affordability of innovative, high value drugs. China’s progressive evolution of a two stage, multidimensional appraisal shows a pragmatic approach to adopting HTA that other countries could follow. Further efforts should be made to fill the gaps in improving the quality of HTA evidence, strengthening capacity for appraisal, formulating more explicit HTA appraisal criteria, and enhancing transparency in the drug listing process.
Key messages
China has adopted health technology assessment (HTA) to inform decisions about which drugs to cover under social health insurance
HTA helps balance access to and affordability of innovative, high value drugs
China uses a two stage, multidimensional appraisal process that has evolved over time
Efforts should be made to improve quality of HTA evidence, strengthen the capacity in HTA appraisal, and enhance transparency
Footnotes
We thank John Cairns, from the London School of Hygiene and Tropical Medicine, for his comments on this article, and Qingqiang Lei, Shijiao Deng, and Yusheng Jia, from Fudan University, for their support on literature review, data preparation, and analysis. The research was funded by the National Social Science Foundation of China (grant 20ZDA072).
Contributors and sources: WC’s research interests include health economic evaluation, health financing, and health policy. LZ’s research focuses on health insurance and health economic evaluation. MH’s research focuses on health economics and policy. SH has over 40 years of experience in health economic evaluation and health policy research.WC, LZ, and MH conceived the paper, drafted the manuscript, provided feedback, revised subsequent manuscripts, and reviewed the final version. SH reviewed and commented on the draft and final manuscript. WC, LZ, and MH contributed equally to this work. WC is the guarantor.
Patient and public involvement: Representatives of stakeholders were invited to join the discussion in the conduct of our research.
Competing interests: We have read and understood BMJ’s policy on declaration of interests and have no interests to declare.
Provenance and peer review: Commissioned; externally peer reviewed.
This article is part of a series proposed by the China Medical Board and commissioned by The BMJ. The BMJ retained full editorial control over external peer review, editing, and publication of these articles. Article handling fees (including printing, distribution, and open access fees) are funded by the China Medical Board.
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