Blog | 5/16/2023

Winning the China Market: A Review of NRDL Inclusions

By Susie Jin, Vikki Leung, Gary Cheng

Key Takeaways

  • Despite the sizeable price discount, the National Reimbursement Drug List (NRDL) remains a valuable market access pathway as most drugs experienced positive sales growth from the inclusion. In recent rounds, multinational companies (MNCs) saw higher growth than domestic players.
  • To win the China market through the NRDL pathway, companies need to develop a suite of strategies with long-term business planning in mind. Apart from pricing, many other factors come into play, such as approved label, robustness of clinical profile, commercial execution, and understanding of the evolving competitive landscape.
  • Although access to the private market is improving, it remains challenging for MNCs to navigate this path as it calls for innovative market access strategies and careful commercial assessment on a case-by-case basis. In the near term, NRDL will continue to be the main gateway to China due to better predictability and transparency.


The pricing and market access landscape in China has been rapidly evolving, and NRDL takes centerstage in this changing landscape. The NRDL determines how drugs are covered under China’s single public medical insurance payer, the National Health Security Administration (NHSA). Since 2017, the implementation of an annual update that allows innovative therapies to secure national reimbursement makes this process increasingly indispensable for drug manufacturers in the China market. Over the years, NHSA has committed to expanding the formulary and increasing patient’s accessibility to innovative drugs. However, given the limitations in budget and sustainability of the Chinese basic medical insurance, pricing pressures persist often leading to steep price cut for NRDL inclusion. While the price reduction may be daunting, NRDL inclusion allows access to large patient volume and unlocks significant commercial opportunity in a fast-growing pharmaceutical market.

For the 2022 NRDL, after being postponed due to COVID surge in China at the end of the year, the updated list released in January 2023 covers a total of around 3000 drugs, amongst which 111 were newly added this year. As usual, oncology is the top therapeutic area on the list, while infectious disease, neurology, cardiovascular, and rare diseases round out the top five for new inclusions. Across the diverse therapeutic areas, the overarching theme for the 2022 NRDL is increasing access to more innovative therapies. We see that through the fast-track pathway, innovative drugs gain market access by shortening the time-lag between new drug approval and NRDL listing. In fact, 20% of the new inclusions this year were newly approved within the past 12 months. In terms of price cuts, this year the average price cut was around 60%, a steep cut but no longer a surprise. The five-year trend for price cuts has stabilized around 50 to 60%.

As the market becomes increasingly crowded and budget constraints continue in China, downward pricing pressure to secure NRDL inclusion remains the top challenge for multinational pharmaceutical companies in this market. In the following section, we highlight 4 scenarios that illustrate strategies pharmaceutical companies take in managing the NRDL.

Scenario 1: Sales increase as companies gain access to a broader market

Since the introduction of NRDL mechanism, most drugs experienced positive sales growth after entering the list. An analysis of the sales data of new inclusions from the 2017, 2018, and 2019 cohorts shows that the drugs experienced a year-on-year increase in revenue by 70% - 450% collectively in the year immediately following the NRDL inclusion. More specifically, domestic players in the earlier cohorts outperformed MNCs in terms of growth rate, but this pattern has reversed in more recent years. MNCs from the 2019 cohort saw their sales quadruple, far outperforming the domestic players which grew at around 60%.

To many MNC players, NRDL is still the main ticket to China, despite the price erosion in the local market and the potential ripple effects on global pricing. One case in point is Risdiplam, a disease-modifying therapy from Roche indicated for spinal muscular atrophy (SMA). It is the first oral medication marketed in China for SMA and received high publicity at the time of launch due to its steep price of RMB 63,800 per unit. Roche attempted to list on the NRDL in 2021 when Risdiplam just came to the market but was unsuccessful in reaching a mutual agreement with the National Medical Products Administration (NMPA) on pricing. In the same round, Risdiplam’s main competitor, Nusinersen from Biogen, entered NRDL at a huge price cut of 95%, lowering its price from RMB 700K per unit to less than RMB 35K per unit. Following the entry, Nusinersen’s revenue grew by fivefold in the first half of 2022 compared to the same period in 2021. With lessons learned in 2021, Roche made a second attempt at NRDL with a different strategy. Ahead of the official negotiation, the company voluntarily reduced Risdiplam’s price from RMB 63,800 to RMB 14,500, and eventually secured a place on the 2022 NRDL at a price of RMB 3,780, a deep discount of 94%. It is the largest price cut seen in the 2022 round and reflects the strong appetite from some MNCs to participate in NRDL with all tradeoffs considered.


Scenario 2: Sales decline due to insufficient increases in volume

Inclusion in NRDL doesn’t always translate into sales increase. A minority of drugs with limited volume upside experienced a decline as the volume expansion failed to compensate for the price discount. A widely discussed example is Toripalimab from Junshi Bio, a leading Chinese biotech. As one of the first domestic PD-1 monoclonal antibody candidates, Toripalimab was first approved by NMPA in 2018 as the second-line treatment for melanoma with an initial launch price of RMB 7,200 per unit. In December 2020, Toripalimab gained inclusion in NRDL at a reduced price of RMB  2,101 per unit (~71% price cut), making it the only PD-1 indicated for melanoma on the list. The only other PD-1 covered by national insurance was Sintilimab from Innovent Bio approved for Hodgkin’s lymphoma. To the market’s disappointment, sales of Toripalimab declined sharply by 60% in the following year, from RMB 1 billion to RMB 412 million. The underperformance of Toripalimab could largely be attributed to its label as the approved indication is closely linked to the volume potential of the drugs. Back in 2020, the drug was only approved for melanoma, a relatively small indication with an incidence rate of 0.9/100,000 in China. Subsequently, in 2021, Toripalimab expanded its indication to nasopharyngeal carcinoma (NPC) and urothelial carcinoma (UC), both with a higher incidence in China (3/100,000 for NPC and 6.61/100,000 for UC in 2018). Following the indication expansion, Toripalimab saw a rapid rebound in sales in 2022. According to Junshi Bio’s latest financial report, sales for Toripalimab reached RMB 736 million in 2022, a year-on-year increase of 79%. As companies think about their strategies surrounding NRDL, it is important to understand the patient segment and develop a clear roadmap for market penetration.


Scenario 3: Sales success achieved outside of NRDL

Despite the hype around the annual NRDL negotiation, some MNC drugs choose to stay out of the coverage and instead pursue the private market. However, few have seen success in this alternative pathway and it is highly challenging to stay competitive in the long run, as demonstrated by the example of Keytruda.

Launched in China in 2018, Keytruda is currently approved by NMPA for 10 indications including the major cancers such as NSCLC, colorectal cancer, breast cancer, and liver cancer. At the initial launch, Keytruda had an annual treatment cost of around RMB 300K per year, far above its domestic PD-1 competitors which were mostly priced around RMB 100K (prior to NRDL price cuts). As domestic drugs lowered their annual treatment cost to RMB 50 – 70K, Keytruda launched a more generous patient assistance program, reducing its annual treatment cost to less than RMB 150K. In addition, instead of pursuing national reimbursement coverage, Keytruda explored alternative payment solutions in the private market such as commercial health insurance and direct-to-patient pharmacies to make the drug more accessible. As of 2021, Keytruda’s annual sales revenue was estimated to be around RMB 3 billion in China, leading all PD-1 drugs from MNC and domestic players.

Many factors contribute to Keytruda’s success – strong clinical profile, broad label, early market entry, and strategic focus on large cities with higher income levels. The strategy worked well for many years, but there are also looming threats. As domestic drugs catch up on clinical efficacy and expand their labels to larger indications, Keytruda’s leading position is under pressure. Tislelizumab, one of Keytruda’s key competitors developed by the domestic player BeiGene, achieved annual sales of RMB 2 billion in 2022 and is forecast to grow at double digits in the coming years.

Keytruda’s path may appear promising to other MNCs hesitant in accepting the price discounts. However, given the current single-payer system in China, navigating the private market would bring more uncertainty as the penetration of commercial health insurance is still significantly lower than in more developed geographies such as the US. Even for formidable drugs such as Keytruda, growth deceleration is inevitable as domestic competitors enter the market with strong products at lower prices. For most MNC drugs, NRDL is still the safer bet as it offers better predictability in sales performance and quicker access to market. 

Scenario 4: Poor sales performance due to absence from NRDL

In many cases, absence from NRDL means underperformance in sales. Lapatinib, a HER2 tyrosine kinase inhibitor (TKI) from GSK, entered NRDL in 2017 at a price cut of 42% and saw a rapid increase in sales in 2018 and 2019. However, the drug was unable to secure a place on NRDL through the renewal negotiation in 2019 and was removed from the list as a result. To make the situation worse for Lapatinib, Pyrotinib, a pan-HER TKI developed by the domestic player Jiangsu Hengrui Medicine, was approved by NMPA for breast cancer in 2018 under conditional approval and successfully made its entry into NRDL in 2019. Sales for Lapatinib decreased immediately by more than 75% in 2020, reflecting a drastic shift of product choice in clinical practice largely driven by reimbursement policy.



For MNC pharmaceutical companies, China has always been an attractive market given the vast population and the high unmet need for innovative therapies in many disease areas, but challenges in market access exist that may hinder companies’ success. While the private health insurance market has made progress over the past decade, national health insurance (Basic Medical Insurance) remains the largest payer in China’s healthcare system. Gaining access to NRDL is crucial for MNCs to secure a competitive position in this rapidly evolving market. Stay tuned as Health Advances develop more analysis of the market access pathways in China.


Susie Jin is a Consultant based in the Hong Kong office and works with clients in the medical devices and biopharma industries; Susie supports the office in China business development.

Vikki Leung is a Consultant based in the Hong Kong office and works with clients and investors in the medical devices, biopharma, and diagnostics industries; Vikki supports the office in China business development.

Gary Cheng is a Vice President based in the Hong Kong office and leads Health Advances’ APAC practice.

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