Systems Upgrade: China reforms digital health policies

China’s array of digital health platforms and mobile phone apps played an important role in tackling the challenges presented by the novel coronavirus (SARS-CoV-2) epidemic that broke out earlier this year. Online platforms swung into action to provide virus tracking, health codes, public advice on medical masks and preventive measures, or links to the latest government announcements. The digital health sector also received a major boost from policymakers, after the National Healthcare Security Administration (NHSA) for the first time indicated that national insurance coverage should be extended to the online sale of prescription drugs. GBI reviews the policies underpinning China’s digital healthcare space, recent national and provincial developments, and some of the partnerships struck by multinational pharmaceutical companies to ensure business continued as near as possible to normal during the outbreak conditions.

China’s evolving eHealth ecosystem
China issued a first license to an online pharmacy in 2005, but the digital health sector was relatively constrained until the entry of internet giant Alibaba in 2014. Ali purchased a controlling stake in CITIC 21BCN, later renamed Alibaba Health, in a move aimed at gaining control over the government’s drug product bar coding system. There were also two key policies released in 2014: an updated version of China’s telemedicine guidelines, 1 and draft regulations from the China Food and Drug Administration (CFDA) that indicated the government was toying with permitting online prescription drug sales.2 The perceived encouragement from policymakers produced a surge in VC investment into e-commerce sites, online physician-patient consulting platforms, and disease management apps.

Regulators subsequently decided to maintain a relatively tight grip over the sector, particularly over online sales of prescription drugs. The first cloud/internet hospitals began to be established within local level pilot schemes from 2014 onwards, offering online medical services, telemedicine consultations, and in some cases prescription drug purchasing and delivery. The “Internet+” action plan introduced in 2015 provided broad support for online innovations to be applied in the healthcare field. A State Council opinions paper in April 2018 gave the official nod for internet hospitals to move beyond experimentation and be more widely employed. The key National Health Commission (NHC) document defining the scope and service offerings possible through internet hospitals was released in September 2018.

By October 2019, a total of 269 Internet hospitals linked to real-world public-sector hospitals had been established across 19 provinces, according to a National Health Commission (NHC) spokesperson.3 Another NHC official revealed that the number of patients accessing online medical services in China increased over 17 times from 2018 to 2019. 4

Online drug sales were provided a legal basis within the new edition of the Drug Administration Law (DAL) released in August 2019 and taking effect from the beginning of 2020, while the National Healthcare Security Administration (NHSA) set out a range of internet medical services that could be included within the scope of items reimbursable under the Basic Medical Insurance (BMI) schemes. The NHC and NHSA include several provisos to online medical care in China, including forbidding patients from gaining a first diagnosis online, limiting online drug purchases to refill prescriptions for patients with real world records at a bricks and mortar facility, excluding several specialist or narcotic drug types and vaccines, and declining to extend BMI coverage to drugs purchased online.

With solid policy foundations already established, the outbreak of the new coronavirus in early 2020 and necessity to ensure patient access to health services amid lockdown conditions acted as a catalyst for the sector. A string of national level releases (see Table 2) entailed a degree of “noise” or repetition of previously stated policies, but also some significant relaxations in policy. Refill prescriptions were extended to three months (from the standard two), and BMI schemes were permitted to reimburse patients for both online medical services and online prescribing and sale of drugs during the outbreak, still limited to patients seeking follow up care or repeat prescriptions already obtained from a real-world doctor.

Real-world implementation by local governments

China’s more forward-thinking provinces responded quickly to national promptings with a string of policies promising to allow patients with common or chronic diseases access to reimbursed follow-up care from internet hospitals (see Table 3). Despite the flurry of on-message announcements, real-world implementation as always has been more fragmented and with various models adopted (see Table 4).

Dozens of individual hospitals invested in software or formed partnerships to establish internet hospital portals during the outbreak period. Once established, hospitals then apply for certification to connect to provincial/municipal Basic Medical Insurance (BMI) schemes. Beijing recently announced that 5 major hospitals are now certified to offer reimbursed online medical services including drug prescription and purchases for follow up patients, while another 14 hospitals are awaiting certification. Some municipalities have set up municipal-wide platforms providing a single portal for patients linked to multiple local institutions (for example Hangzhou and Nanjing). And third-party private sector players, are also becoming increasingly closely entwined with the national BMI schemes, such as Ping An Good Doctor’s recent partnership with Hubei’s BMI schemes. Ping An’s hospital cloud platform is able to partner with local hospitals and connect with IT systems, giving the app’s members in the region access to online services connected to real-world institutions.