Use of health technology assessment in drug reimbursement decisions in China

Abstract

China has made substantial progress in using health technology assessment, but more effort should be made to improve the quality of evidence, strengthen capacity, and enhance transparency, say Wen Chen and colleagues

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).^{4 5 6 7 8 9 10}

Table 1.

Evolution of HTA in drug reimbursement decisions in China, 2017-21

	2017	2018	2019	2020	2021
Scope of drugs	New drugs	Anticancer drugs	Drugs launched before Jan 2019	New drugs launched from Jan 2015 to Aug 2020	New drugs launched from Jan 2016 to Jun 2021
Manufacturer application for listing	Not allowed	Not allowed	Not allowed	Yes	Yes
Quick review criteria for negotiation of drug selection	Expert judgment	Expert judgment	Expert judgment	Clinical value (efficacy/effectiveness, safety, patient benefit) and cost	Comprehensive value (efficacy/effectiveness, safety, cost, innovation, equity)
Cost effectiveness and budget impact analysis	Voluntary	Required	Required (with electronic version*)	Required (with electronic version*)	Required (with electronic version*)
HTA appraisal process	Expert group discussion	Expert group discussion	Pre-appraisal training, single expert appraisal, discussion with group leader	Pre-appraisal training, single expert appraisal, discussion with group leader	Pre-appraisal training, two experts separate appraisal, discussion with group leader
No (%) of drugs included after price negotiation	36 (80)	17 (94)	97 (65)	119 (74)	94 (80)
Average reduction in prices (%)	44	57	51†	51	62‡

Sources: Information published by the China National Healthcare Security Administration.

^*Underlying model is submitted and available for health economics experts to check.

^†Weighted by the reduction in prices for new drugs and re-negotiated drugs.

^‡For exclusively licensed drugs.

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.

Fig 1.

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.^{12 13 14}

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,^{17 18 19 20} 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.

Table 2.

Characteristics of the first stage briefing dossiers for 95 innovative drug submissions for 2021 drug reimbursement list

	Incomplete information	No (%) of drugs	Inaccurate information	No (%) of drugs
Safety	No reporting of adverse drug reaction monitoring or safety study results	7/95 (7)	Concealing or misreporting box warning	9/95 (10)
Effectiveness	Study type (RCT, systematic review, etc) not reported	13/95 (14)
	Country or region of study population not reported	49/95 (52)
	Comparison with active treatment not reported	34/95(36)
	No reporting of detailed study design for RCT (with active comparators)	23/42 (55)	Inaccurate study designs for RCT (with active comparators)	2/42 (5)
	No reporting of detailed study design for systematic review (RCTs with active comparators)	24/35 (69)	Inaccurate study designs for systematic review (RCTS with active comparators)	4/35(11)

RCT = randomised controlled trial.

Information was retrieved from public data released on the website of the National Healthcare Security Administration of China. For the safety dimension, manufacturers’ reports were compared with data from official channels and box warnings on drug labels released by the National Medical Products Administration in China and the US Food and Drug Administration. For the effectiveness dimension, manufacturers’ reports were assessed against Consolidated Standards of Reporting Trials (CONSORT) guidelines.

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,^{21 22} 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.^{18 20 23} 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,^{19 23 24} 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).

Table 3.

HTA appraisal feedback and process transparency in China and four selected countries

	China	Australia23	Canada18 24	England19	France20
Dossier submission released to public	Initial brief submission only	No	No	Yes	No
Dossier assessment
Notification to manufacturers	Oral report and advice	Commentary from external evaluation entities and committee advice	Draft reports of assessment body (CADTH)	Committee report and comments from consultees and commentators	List of questions concerning the methods
Manufacturers’ feedback	Provide written feedback on the brief report if necessary	Return written response, as well as apply for committee hearings	Submit written comments	Provide supplementary material if NICE agrees; respond to comments and attend meetings with NICE	Return written answers
Public contents	None	N/A	CADTH reports	Committee and technical report and stakeholder comments, and responses from NICE	Critical analysis (appended to the opinion form)
Appraisal
Notification to manufacturers	Oral report and advice	Written advice (committee minutes)	All draft recommendations are posted on the CADTH website for stakeholder feedback	Two representatives from the manufacturers (normally 1 with health economics expertise and 1 with medical expertise) can attend first part of appraisal committee meeting discussions	Opinion draft
Manufacturers’ feedback	Provide written feedback on the brief report	Applicants who have received a decision to “not recommend” may request a meeting with the chair	Provide feedback on the draft recommendation, and request reconsideration	Representatives can respond to questions from the appraisal committee and comment on any matters of factual accuracy	Respond to written observations or request meeting with president of CEESP
Public contents	None	Recommendations and evidence and rationale behind them	Both the draft recommendation and final recommendations	Consultation document plus stakeholder comments and NICE responses, final decision	Appraisal meeting minutes, the final opinion draft

CEESP=French Economic and Public Health Committee, CADTH=Canadian Agency for Drugs and Technologies in Health, NICE=National Institute for Health and Care Excellence.

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