The sales volume of China's innovative drugs and medical devices surged in 2025, while commercial insurance has become an important driving force in building a multi-level medical security system, according to a recent white paper.

The white paper, jointly issued by China Re Life and MediTrust Health on May 21, forecasts that the sales volume of China's innovative drugs would reach 195 billion yuan ($28.7 billion), growing significantly compared to that of last year. Basic medical insurance — as the main source of innovative drug and equipment payments in China — would have an expenditure of approximately 90.5 billion yuan. By 2025, the payment scale of commercial health insurance for innovative drugs and medical devices would reach 15.2 billion yuan, a year-on-year increase of 23 percent.

The driving force for payment growth of commercial health insurance comes from the increasing proportion of people with illnesses among the insured population of commercial health insurance. The healthy insured group is gradually transforming into innovative drug and equipment users as they age and their diseases progress, experts said.

"The construction of a multi-level medical security system is accelerating, and efforts are being made to accelerate the reform of the payment system and health service system," Seth Zhang, founder and CEO of MediTrust Health, said. "China's innovative pharmaceutical industry is standing at a critical juncture, with payment being the primary driving force."

Over the past eight years, China's innovative pharmaceutical and medical device industry has achieved a remarkable leapfrog development that has attracted global attention.

According to the white paper, from 2018 to 2025, the number of innovative drugs entering the clinical stage in China accounted for nearly 40 percent of the world's total. By 2025, the proportion rose to 47.4 percent, which means that almost one out of every two new drugs entering clinical research worldwide comes from China.

In the field of innovative medical devices during the 14th Five-Year Plan period (2021-25), China has approved a total of 292 innovative medical devices, an increase of 3.3 times compared to that of the 13th Five-Year Plan period (2016-20), according to the paper.

The revolutionary breakthrough in treatment paradigm has significantly improved clinical efficacy, while also raising the upper limit of disease treatment costs, according to the white paper. In this context, building a diversified payment system with commercial health insurance as an important pillar is no longer a multiple-choice question for industrial development, but a necessary answer to support the sustainable development of innovative drugs and improve patient access to medication.

"Innovative drug and equipment payment requires the establishment of a diversified system with medical insurance support, moderate social participation, and commercial insurance intervention," Wu Jinglei, president of the Shanghai Medical Association, said. "For commercial insurance, the public's awareness should be cultivated, tax should be reasonably reduced to purchase commercial insurance, insurance products should be innovated, and medical services and commercial insurance should be integrated to achieve efficient and convenient underwriting and claims processing."

Data from the National Financial Regulatory Administration showed that by 2025, the premium scale of commercial health insurance in China reached 997.3 billion yuan, with a compound annual growth rate of 15.3 percent in the past decade, becoming an important medical payer second only to basic medical insurance.