China Financial Assistance Programs Market Analysis

China Financial Assistance Programs Market Executive Summary

The China Financial Assistance Programs Market is at around $2,278.1 Mn in 2023 and is projected to reach $6,477.4 Mn in 2030, exhibiting a CAGR of 16.1% during the forecast period 2023-2030.

Patients' out-of-pocket drug cost sharing is determined by their health plans or pharmacy benefit manager's (PBM's) formulary--a list of preferred and nonpreferred prescription drugs. Preferred status is based on a drug's effectiveness, price, and the level of rebate the payer receives from the manufacturer for giving the drug preference over its competitors. Generics and preferred brand drugs are generally assigned lower patient cost sharing than nonpreferred brand drugs. As drug prices have increased, so has patient cost sharing, causing some patients to stretch, forgo, or discontinue medication that is too expensive. Drug manufacturers often seek to mitigate these effects by providing or funding various forms of patient financial support. The aim of drug manufacturers' patient financial support is to minimize or remove out-of-pocket cost sharing as an obstacle when patients choose medications, thereby keeping them on brand-name drugs for longer. 

There is an increasing prevalence of chronic diseases in China, in 2022, there were around 197 deaths in China from major cardiovascular diseases per 100,000 population and 3.7 Mn people were living with diagnosed diabetes out of which 10.1% were males and 8.7% were females. Therefore, the market is predominately driven by factors such as chronic disease prevalence, and aging demographic whereas reimbursement challenges, lack of awareness and budgetary pressures restrict market growth.

Pharmaceutical companies providing financial assistance to patient are such as Merck, GSK, Pfizer, Johnson & Johnson, Novartis among others.

Market Dynamics

Market Drivers

Chronic disease prevalence: The national prevalence of any chronic diseases was 81.1% among Chinese adults. The growing number of patients requiring long-term, frequently costly therapies is due to chronic illnesses. This results in a long-term, ongoing demand for financial help. The treatment of chronic illnesses is a top concern in medicine, which motivates support for aid initiatives.

Rising population of people aged above 65: The aging population in China is increasing at a rate of 28%, will reach o population of 408 Mn by 2024, this is making them more prone to diseases requiring long time treatment and are more inclined towards help from pharmaceuticals and medications thus it is boosting the market of financial assistance in China.

Market Restraints

Reimbursement Challenges: Reimbursement challenges and limited coverage of financial assistance services under Saudi Arabia's healthcare system also pose barriers to wider adoption. Thus, limiting its accessibility and growth.

Lack of awareness: Lack of awareness and understanding about the benefits of financial assistance programs among both patients and healthcare providers in Saudi Arabia is a key challenge. Limiting the adoption financial assistance and ultimately limiting its growth.

Budgetary pressures: Pharmaceutical companies must balance the cost of assistance programs with maintaining profit margins. Economic downturns or changes in company strategy could lead to reduced funding for these programs. This pressure might result in more selective or limited assistance offerings.

Regulatory Landscape and Reimbursement Scenario

China's reimbursement mechanism significantly impacts the pricing of pharmaceutical products. The National Reimbursable Drug List (NRDL) is a key component, as it determines which drugs are eligible for reimbursement by the Basic Medical Insurance (BMI) scheme. Once a drug is included on the NRDL, the National Healthcare Security Administration (NHSA) negotiates with pharmaceutical companies to set a price for the drug, using methods such as benchmarking against prices in other countries, assessing clinical value, and considering production costs. The NHSA also leads volume-based procurement (VBPs) for drugs with a well-established clinical profile, aiming to reduce prices through economies of scale.

Additionally, the two-invoice system, introduced in 2016, improves transparency and reduces prices by requiring pharmaceutical manufacturers to issue invoices to distributors and distributors to issue invoices to medical institutions. As a result, the average percentage of price reduction for drugs included in the NRDL has been around 50% since 2016, putting pressure on pharmaceutical companies to maintain profitability while remaining competitive in the market. The mechanism also encourages market competition and value-based pricing, with the government considering value-based pricing for off-patent originators. Overall, China's reimbursement mechanism plays a crucial role in shaping the pricing of pharmaceutical products, ensuring that prices are reasonable and fair while balancing accessibility and affordability.

Competitive Landscape

Key Players

Here are some of the major key players in the China Financial Assistance Programs Market:

• CSPC Pharmaceuticals
• Cardinal Health
• Sinopharm Group Co Ltd
• Roche
• Pfizer
• Bayer
• Sanofi
• Novartis
• Merck
• GSK