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Innovation Devices Exempted from DRG in China

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The National Health Insurance Administration issued the “Reply to Recommendation No. 3298 of National People’s Congress” on March 4, in which the Administration agrees to further improve the payment system of Diagnosis Related Groups (DRGs) which exclude the innovative products.

About Diagnosis Related Groups DRGs

In the Reply, the National Health Insurance Administration gives support to local medical insurance departments to pilot the CHS-DRG exclusion payment. For example, Beijing will exclude drugs, medical devices and diagnostics that meet certain conditions in the payment of CHS-DRG system.

The Administration also pointed out that in the process of centralized procurement, medical institutions determine the demand according to historical usage, clinical use and medical technology progress, and “set aside market space, outside of centralized procurement, for innovative products”.

In July 2022, the Beijing Municipal Medical Insurance Bureau issued a notice proposing that innovative drugs, medical devices, and medical service items can be paid separately without DRG.

DRG/DIP covers drugs and consumables into the operating costs of hospitals in the form of package charging, forcing hospitals to reduce costs and control consumables usage. If innovative drugs and devices are subject to DRG, doctors do not want to use them which will often increase the cost.

From 2014 to 2022, the NMPA approved a total of 189 innovative medical devices. In 2022 alone, it approved the 55 innovative devices, an increase of 57.1% compared with 2021.

About China Med Device

China Med Device provides regulatory and commercialization turnkey solutions for medical device, IVD, CDx and combination products in China. As a qualified NMPA legal agent with offices in Boston, Beijing and Hainan, we can represent manufacturers for the complete product life cycle without their need to create a local entity in China.

Our regulatory services include strategy, registration, type testing, product technical requirement (PTR), clinical evaluation report (CER), clinical trial, IVDs draft guidelines, GMP and post-market surveillance. Our commercialization services include market research, reimbursement, partnership strategy and distribution qualification.

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