This Price Is Really Too Low

At nine o'clock, the National Medical Insurance negotiations officially began.

The venue fell completely silent, and the buzz of whispered conversations vanished in an instant.

Chen Linghui cleared his throat, fixed his gaze on Wei Kang, and began to speak.

He had noticed that Wei Kang was young, had taken over Sanqing Pharmaceutical less than a year ago, and was not the executive in charge of business. His negotiation experience was presumably limited. Chen therefore intended to take the initiative with an overwhelming show of force, hoping to intimidate his opponent from the outset and secure the greatest possible concession.

"Our medical insurance negotiation team has come here with tremendous resolve. We are negotiating primarily in accordance with the principle that the people's health comes first. Through today's negotiations, we hope to reduce the burden on patients to the lowest possible level while serving more patients."

"As everyone knows, spending on cancer treatment accounts for a very large share of medical insurance funds—13%, second only to cardiovascular and cerebrovascular diseases. Since the national drug negotiation mechanism was introduced, we have continually worked to include more anti-cancer drugs in the medical insurance catalog. In recent years, nearly a hundred new anti-tumor drugs have been added to the catalog."

"Of course, most of the drugs covered by medical insurance are domestically produced. New foreign anti-cancer drugs are very expensive. Take Sanqing Anti-Cancer Drug's biggest competitor, Merck's Keytruda. It has never been included in the medical insurance catalog precisely because its price is too high."

"If Sanqing Anti-Cancer Drug is priced substantially lower than Keytruda, then inclusion in the medical insurance catalog will certainly not be a problem."

"Sanqing Pharmaceutical previously issued a public announcement across the internet, saying it wanted every patient in the country to be able to see a doctor and afford medicine. Everyone has seen that compassion. Now that we have entered the negotiation process, I believe President Wei will certainly not go back on his word and will surely demonstrate the utmost sincerity."

"Sanqing Anti-Cancer Drug sells for a very high price overseas, so it must have already made a fortune. Therefore, its domestic price should involve the greatest possible concession. Only then can it shoulder the responsibility of a national enterprise and convince us of President Wei's sincerity."

"Of course, we have also considered Sanqing's substantial investment in developing new drugs. The state has always done its utmost to support high-tech enterprises. Therefore, as long as Sanqing lowers its price, we will do our best to raise the reimbursement rate. That is also our medical insurance side's demonstration of sincerity."

"With sincerity from both sides, I believe these negotiations will reach a fairly satisfactory outcome."

"President Wei, what do you think?"

With those words, he first invoked national duty and compassion, then made a great deal of Wei Kang's earlier remarks, demanding that the other party make the greatest possible concession. If Wei Kang did not cut the price by much, he would inevitably leave people with the impression that he lacked integrity.

Of course, Chen had not offered no benefits. If Sanqing truly gave a sincere price, he would adjust the reimbursement rate for the anti-cancer drug. That way, medical insurance would cover most of the cost, promoting sales of the drug. If sales soared, revenue would soar as well. Overall, it would benefit both sides.

Drugs in the medical insurance catalog were divided into three categories: Class A, Class B, and Class C. The reimbursement ratio differed for each category.

Class A drugs had proven efficacy and low costs. They were reimbursed at 100% of the applicable rate, requiring no out-of-pocket payment. Class A was determined uniformly by the state and could not be adjusted by local authorities.

Class B drugs came in many varieties and had good efficacy, but patients had to pay a portion themselves. The specific reimbursement rate varied according to local policies and the individual drug.

Class C drugs included health supplements and new drugs, and were essentially paid for entirely out of pocket.

It should be noted that not every drug in the medical insurance catalog was automatically reimbursable. Eligibility also depended on the disease category or specific patient group.

For example, Oseltamivir was a commonly used anti-influenza drug and a National Medical Insurance Class B drug, but it came with certain restrictions. For instance, standard oral formulations of Oseltamivir were limited to antiviral treatment for high-risk groups with severe influenza and severely ill patients, while granules were limited to children or patients with swallowing difficulties who were unsuitable for standard oral formulations.

If the conditions for use were not met, then patients could only pay out of their own pockets.

There were nearly 200,000 drugs in the domestic drug catalog in total, yet medical insurance could reimburse 95% of Class A drugs, which numbered only a little over two thousand, and around one thousand Class B drugs.

The overwhelming majority of the remaining drugs were Class C drugs and could not be reimbursed. Imported drugs for major illnesses, miracle drugs, and life-saving drugs were all in Class C.

This drug classification was extremely important and authoritative, because commercial medical insurance reimbursement was also benchmarked against medical insurance. Only Class A and Class B drugs reimbursable by medical insurance could be reimbursed proportionally by commercial insurers.

Wei Kang smiled faintly, seemingly unmoved, and merely nodded. "Team Leader Chen, I stand by my word. You can rest assured of that."

"Besides, I am very interested in Keytruda's market as well, so Sanqing's anti-cancer drug will definitely be cheaper than it."

At those words, everyone around them nodded inwardly. Sure enough, Sanqing was sincere—at the very least, far more sincere than Merck.

Chen Linghui's heart settled at once, and a faint smile appeared on his tightly drawn face.

"Very good. Then President Wei and we have reached a consensus on lowering the price. I believe the following negotiations will be much easier."

"Here, I need to emphasize something. Everyone knows that there has long been a saying in the pharmaceutical industry that anti-cancer drugs with annual costs exceeding 300,000 yuan cannot enter the medical insurance catalog. That is indeed true."

"However, I know that Sanqing's anti-cancer drug has excellent treatment results and basically achieves a complete cure within a few months."

"So annual costs are not really an issue here. From any perspective, that benefits both patients and medical insurance. Haha."

He rarely smiled, then looked at Wei Kang and asked, word by word, "President Wei, what price do you have in mind for the anti-cancer drug?"

Wei Kang smiled lightly. "I very much agree with you. If the annual cost exceeds 300,000 yuan, there is indeed no need for it to enter medical insurance. Sanqing will absolutely not exceed that figure."

"As for the price I have in mind, that depends on how much budget you have allocated for domestic drugs."

His expression suddenly turned stern. "I know that many domestic PD-1 anti-cancer drugs have already dropped to dirt-cheap prices. Competition among domestic drugs is extremely fierce, and their quotes to medical insurance have reduced annual costs to below 40,000 yuan."

"That pricing standard is based on generic drugs. Although Sanqing is also a domestic anti-cancer drug, ours is an independently developed new drug. It absolutely cannot be priced like a generic."

"If Team Leader Chen intends to demand that price from Sanqing, then it would be an insult to Sanqing. We could never accept it."

Chen Linghui relaxed. From Wei Kang's words, he had already gauged Sanqing's approximate target price range.

The annual cost should be much higher than domestic drugs, but lower than imported drugs. That seemed reasonable. Considering that Sanqing Anti-Cancer Drug required no follow-up treatment expenses, its overall price could be raised somewhat.

Now that the upper and lower limits had been set, the rest of the negotiations would depend on each side's bargaining skills.

He nodded with a smile. "Of course. Sanqing's is an independently developed new drug and has been recognized in overseas markets, so naturally it will be treated according to the standards for imported drugs."

He immediately perked up and began discussing the price with great enthusiasm.

"Then let us calculate the quote according to annual cost. I believe our goals are aligned, and neither of us wants to play any tricks. Our primary concern is what patients can afford."

"Everyone knows that annual income levels for urban residents in our country are still quite low. According to National Bureau of Statistics data, the average annual income of employees in non-private entities is under 100,000 yuan, while the average annual salary of employees in private entities is only a little over 50,000 yuan."

"As for residents' disposable income, that is even lower. This year, per capita disposable income for residents is only 32,189 yuan. That is quite low. If we set the price too high, far beyond what ordinary people can afford, then it would certainly be meaningless."

"According to the 'National Healthcare Security Benefits List,' the maximum payment limit for employee medical insurance combined with supplemental coverage for major employee medical expenses, and for resident medical insurance combined with critical illness insurance, should in principle reach around six times the local average annual wage of employees and per capita disposable income of residents."

Chen Linghui showed a troubled expression. "You see, when setting a price, we must consider the entire country. We cannot limit ourselves to one place. Otherwise, residents of first-tier cities might be able to afford the set price, but residents of small towns would likely have to sell everything they own."

He slowly named a price.

"So our first requirement is that the reimbursement cap for resident medical insurance must not exceed 200,000 yuan, and the cap for employee medical insurance must not exceed 250,000 yuan. As for the specific reimbursement rates in different regions, we can discuss those further."

"This is also based on the fact that the Sanqing Anti-Cancer Drug only involves a one-time treatment cost."

"President Wei, what do you think?"

Everyone in the room instantly held their breath and turned to Wei Kang, waiting for his response.

There was an unspoken hint of sympathy in their eyes.

Because compared to Sanqing's miraculous efficacy, this price was truly too low.

Moreover, the cost would be shared proportionally by patients and the medical insurance fund.

If it was included as a Class B drug, even assuming the highest out-of-pocket ratio of 80%, patients would only need to pay a little over a hundred thousand yuan.

Especially now that its price in Eagle Country—more than 800,000 US dollars—had been revealed, the domestic price was practically dirt cheap.

Seeing readers asking for more chapters, the author shed tears of excitement. Ah, could a newbie flop author like me actually receive requests for updates? Alright, I'll definitely try to update earlier over the weekend.