China Mandates Priority Use of Essential Drugs in Hospitals

China’s National Health Commission (NHC) has issued a notice requiring all public medical institutions to prioritize the allocation and use of essential drugs, marking a significant policy shift in the country’s healthcare system. The directive, released on August 20, provides comprehensive implementation guidance for the 2026 edition of the National Essential Drugs List, which takes effect on September 1, according to Xinhua News.

A New Era for Essential Drugs

The notice transforms China’s essential drug system from a “catalog selection” phase to a “rigid use” phase, according to Zhang Yue, Chairman of Aoyou International. Zhang described the policy as turning essential drugs from a “recommended list” into a hard constraint for drug use in public hospitals at all levels.

Under the new requirements, all levels of public medical and health institutions must complete updates to their drug supply catalogs within two months of the new list’s implementation, specifying generic names, dosage forms, and specifications. Local health administrative departments are tasked with guiding institutions to improve drug supply catalog evaluation mechanisms and optimize drug use structures.

The 2026 edition of the National Essential Drugs List, released on July 9, represents a major expansion from the 2018 version, growing from 685 to 794 drugs. The revision was driven by China’s aging population, rising health needs, and advances in pharmaceutical research and development, as reported by China Economic Net.

Expanding Access at the Primary Level

A key focus of the new policy is improving medication access at primary-level healthcare institutions. The notice strengthens unified drug catalog management in compact medical consortiums and calls for continued expansion of essential drug varieties available at the grassroots level. The adjustment cycle for medical consortium drug catalogs should not exceed one year.

Gong Xiangguang, Director of the Drug Policy and Essential Drugs Department at the NHC, emphasized the goal of medication linkage: “We will further promote the management of essential drug allocation and use, improve the standardized use capacity of essential drugs, so that medical institutions at all levels can afford and use them well, promote medication linkage, and let people use the same drugs at primary-level medical institutions near their homes as in large hospitals.”

Drugs in the new catalog currently account for 71% of total drug usage in public medical and health institutions nationwide, according to Jiemian News. By institution level, essential drugs represent 78% of usage at primary-level institutions, 74% at secondary hospitals, and 65% at tertiary hospitals.

Chronic Disease and Pediatric Focus

The new catalog places significant emphasis on chronic and common diseases with high incidence rates. It adds 68 chemical drugs and biological products, including 5 diabetes drugs, 4 hypertension drugs, 7 chronic obstructive pulmonary disease drugs, and 8 common digestive tract disease drugs, as detailed by People’s Daily via Dazhong.com.

The list also includes 16 innovative drugs, among them 4 domestically produced Class I new drugs. Pediatric care received particular attention, with 31 pediatric-appropriate varieties added, including 5 pediatric-specific drugs. Varieties with clear pediatric usage and dosage increased to 317, while pediatric-appropriate dosage forms and specifications grew to 905, with emphasis on granules, oral solutions, and suspensions.

Beijing Hospital’s Chief Pharmacist Hu Xin noted that the additions “focus on diseases with high incidence rates and common conditions seen at primary-level medical institutions,” providing physicians with more treatment options and expanding the variety of drugs available at the grassroots level.

Enforcement and Accountability

The notice establishes robust monitoring and evaluation mechanisms. Provincial health administrative departments must determine indicators for essential drug allocation ratios, usage volume, amount, and prescription proportion in public medical institutions, with these targets increasing year by year. Medical institutions are required to set clinical department usage indicators and mark essential drugs in information systems for priority selection.

Essential drug rational use will become a key focus of prescription review and prescription evaluation. When physicians have equivalent drug options, they must prioritize national essential drugs while ensuring therapeutic efficacy.

The NHC will include essential drug allocation and use in medical reform and public medical institution performance evaluations. A results notification system will be established, with evaluation results linked to subsidy payments for the basic drug system at the primary level.

Industry Implications

Zhang Yue of Aoyou International said drugs entering the new essential drugs catalog gain a “priority access pass” to public hospitals nationwide, with new additions expected to see clear volume expansion opportunities. Conversely, adjuvant drugs and homogeneous generics not included in the essential drugs list will see their survival space in public medical institutions continue to narrow.

“The primary-level pharmaceutical market will undergo structural upgrading,” Zhang said. “The key additions of chronic disease and children’s drugs precisely match primary-level diagnosis and treatment needs, and related generic drug and children’s drug companies will enjoy policy dividends from primary-level volume expansion.”

The policy also coordinates with China’s medical insurance system. Xu Na, Deputy Director of Medical Services Management at the National Healthcare Security Administration, confirmed that all newly added drug varieties in the essential drugs list adjustment are medical insurance drugs, as reported by 21st Century Business Herald. The medical insurance catalog will be adjusted to prioritize essential drugs in A/B classification, ensuring higher reimbursement ratios.

What to Watch For

As the September 1 implementation date approaches, all public medical institutions must complete their drug supply catalog updates by November 1. The coming months will reveal how effectively the “rigid use” mandate translates into practice across China’s vast healthcare system, particularly at the primary level where access improvements could have the greatest impact on patient care.

The policy’s success will also depend on the pharmaceutical industry’s ability to ensure stable supply of essential drugs, especially in remote and underserved regions. As Gong Xiangguang noted, the essential drugs list is an important basis for what doctors prescribe and what patients receive - making its effective implementation a critical measure of China’s healthcare reform progress.

For patients, the most tangible outcome will be greater consistency in medication availability across different levels of care. The promise of using the same drugs at neighborhood clinics as at major hospitals represents a significant step toward more equitable healthcare access in China.