China's Dual Drug Pricing System: CDR Registration to Support Global Expansion

China's Dual Drug Pricing System: CDR Registration to Support Global Expansion

China is implementing a transformative approach to pharmaceutical pricing with the introduction of the China Drug Registry (CDR). This database serves as a formal record of transaction prices occurring outside the public health insurance system, specifically in private hospitals, online platforms, retail pharmacies, and high-end medical institutions.

The Mechanism of the CDR

Unlike the heavily regulated provincial procurement platforms, the CDR operates on a self-reporting model:

• Authenticity: Manufacturers report their own prices, backed by a commitment letter confirming data accuracy.
• Verification: A state-owned operating unit conducts formal verification without interfering with the reported price level.
• Flexibility: Companies can apply to adjust prices based on clinical value, supply-demand dynamics, or competitive changes.

Overcoming International Reference Pricing (IRP) Challenges

The primary strategic goal of the CDR is to mitigate the impact of International Reference Pricing (IRP), where countries look at a drug's price in its home market to set their own limits.

• For Chinese Innovators: Companies seeking to launch in markets like Brazil have previously struggled because Brazilian regulators referenced low Chinese public insurance prices. The CDR provides authoritative proof of higher private-sector prices, facilitating fair market entry abroad.
• For Multinationals: Global firms can register private-market prices in China without fearing that these will be dragged down by public reimbursement rates, protecting their global price floors.
• Multilingual Certification: The registry provides multilingual certificates, allowing these prices to be officially recognized by international regulatory and procurement bodies.

A Broader Strategy for Innovation

The CDR is part of a larger wave of reforms aimed at making China a premier global hub for pharmaceutical innovation:

1. China-ASEAN Procurement: Facilitating the entry of Chinese medicines into Southeast Asian markets.
2. Confidentiality: Adoption of voluntary confidentiality pricing for the National Reimbursement Drug List (NRDL) and stricter rules for innovative drugs in commercial insurance.
3. Supportive Measures: Implementation of 16 government measures to boost R&D, medical insurance access, and commercial insurance integration.

By separating public reimbursement from private market value, the National Healthcare Security Administration (NHSA) is providing a standardized and transparent platform that encourages both the globalization of Chinese medicine and the launch of new foreign drugs within China.