Changes in drug-related insurance in the past three years: low prices, selling points and perceptions

In 2019, more and more insurance products listed drug catalogs, mainly to increase their own selling points to attract customers

Judging from the trend of changes since 2019, the number of covered drugs is increasing, which is consistent with the continuous addition of insurance products, and the superposition in details is consistent

1.

Chart 1: Comparison of the average number of drugs covered in H1 from 2019 to 2021

Data source: Latitude Health database

From 2019 to 2020, the average number of drugs covered by separate drug insurance (according to the conclusions drawn from the Latitude Health database for personal insurance, property insurance company’s drug insurance and drug insurance group insurance) has a large leap, 2021 The first half of the year was basically the same as that of 2020

Chart 2: Comparison of the distribution of the number of drugs covered in H1 from 2019 to 2021

Data source: Latitude Health database

The increase in the number of drugs in the drug catalog is consistent with the addition of insurance, which attracts customers by constantly accumulating details

2) Changes in the insurance coverage of drugs: the proportion of products with an insurance coverage of less than 1 million has increased year by year

In the first half of 2021, products with insurance coverage of 1 million and below accounted for 50% (mainly 1 million), compared to about 40% in 2019 and 2020; products with 1 million to 2 million products accounted for The ratio shows a trend of decreasing year by year, from 43% in 2019 to 31% in the first half of 2021, and the proportion of products with more than 3 million yuan is basically stable at about 20%

Chart 3: 2019-2021H1 pharmaceutical insurance coverage distribution comparison

Data source: Latitude Health database

On the one hand, the increase in low-insurance products is affected by the massive increase in products.

3) The top ten drugs covered by the drug insurance: more drugs in the medical insurance

In terms of drug insurance, eight drugs are among the top ten drugs in 2019-2021, namely Pertuzumab, Fruquintinib, Lenvatinib, Pembrolizumab, Aletinib, and Xin Dilimumab, Tereprizumab, Nivolumab

The top ten drugs in 2019, pyrrotinib (for breast cancer), fell out of the top ten in 2020 and 2021

Chart 4: 2019-2021H1 Drug Insurance Top Ten Drug Distribution Comparison

Note: The red bottom represents the medicines covered by the medical insurance, and the yellow bottom represents the medicines outside the medical insurance.

Data source: Latitude Health database

From the perspective of the top ten medicines, mainly high-priced drugs newly included in the medical insurance catalogue, which can effectively control risks.

In addition, outside of the medical insurance catalog, the main strategy of drug insurance is to include popular new drugs to increase its own selling points

2.

Chart 5: Comparison of the average number of drugs covered by the three types of insurance

Note: The data on million medical insurance products is relatively small, and products from 2020 and the first half of 2021 are used; Huiminbao has product data for 2020 and selected products with drug protection, and drug insurance chooses products in 2020 for horizontal comparison

Data source: Latitude Health database

According to the data from the Latitude Health database 2020 Huiminbao products and the million-dollar medical insurance data in the first half of 2020 and 2021, the average number of drugs covered by the million-dollar medical insurance that includes drug protection and provides a drug list is more than that of individual drug insurance.

Chart 6: Comparison of the distribution of the number of drugs covered by the three types of insurance

Data source: Latitude Health database

Compared with Huiminbao, the number of medicines covered by the million-dollar medical insurance is also significantly larger.
The proportion of million-dollar medical insurance with less than 20 kinds of drugs is only 25%, while Huiminbao (2020) is as high as 74%
.
However, medical insurance with more than 80 kinds of medicines accounted for as high as 35%, while medicine insurance accounted for only 15%
.
It can be seen that the competition of million medical insurance is still very fierce, and it needs to be used as a selling point to attract users to buy
.

2) The difference in drug coverage: drug insurance has more products with a coverage of 1 million to 2 million

Both Million Medical Insurance and Huimin Insurance’s drug coverage are mainly 1 million and below, and the drug coverage of drug insurance is relatively evenly distributed (4:2:2)
.
The proportion of products with a high drug coverage of 3 million and above, the million medical insurance is up to 27%, followed by drug insurance at 22%, and Huiminbao’s special drug protection has almost no products with a drug coverage of more than 3 million.

.

Chart 7: Comparison of the distribution of insurance coverage of the three types of insurance drugs

Data source: Latitude Health database

The distinction between insurance coverage reflects the demands of different types of insurance.
After all, Million Medical Insurance only uses medicines as a selling point, and risks still need to be controlled.
Only some insurance products are more radical, and the market is more differentiated
.
This is especially true for Huimin Insurance.
Most products will control the insured amount.
Even the radical products only increase the insured amount to less than 2 million.
They dare not reach the 3 million insured amount like the million-dollar medical insurance
.
Pharmaceutical insurance is different.
Its main appeal is to obtain customers through this type of product.
Since the compensation is generally not high, increasing the selling point in the insurance amount has become one of its main strategies
.

3) The difference between the top ten drugs covered by the three types of insurance

The top ten drugs of Million Medical Insurance and Huimin Insurance have a high overlap, while the top ten drugs of Pharmaceutical Insurance and the other two do not have a high overlap
.

Chart 8: Comparison of the distribution of the top ten drugs in the three types of insurance

Note: The red bottom represents the medicines covered by the medical insurance, and the yellow bottom represents the medicines outside the medical insurance.

Data source: Latitude Health database

From the perspective of the top ten drugs, drug insurance is the least included product out of the medical insurance list.
The top ten only have 3 products out of the list, while Million Medical Insurance and Huimin Insurance each have 5 drugs that are out of the medical insurance list
.
Only O drug and piperacillil appeared in the catalogs of the three at the same time, showing their popularity as a selling point
.
In addition to the drugs used outside of the two medical insurance catalogs, the top ten drugs that appear in both the drug insurance and the million medical insurance, as well as the million medical insurance and Huimin Insurance drug catalogs, are the products in the medical insurance catalog.
It can be seen that various products are in the list.
Convergence on controlling risks and attracting users
.
Of course, K medicine is an exception.
As an out-of-list product, it has not entered the top ten in the million medical insurance, but it has entered the top ten in the pharmaceutical insurance and Huimin Insurance.
This shows that the two types of products are more pursuing marketing and selling points, especially Products with stronger public awareness, of course, this is also because these two types of products rely more on Internet channels and lack interpersonal interaction explanation and communication
.

Therefore, for drugs outside the medical insurance catalog, the main strategy of insurance products is to cover the most popular high-priced drugs in the market to increase selling points, rather than whether these high-priced drugs have real value to users
.
There are three reasons behind this strategy: low price, supplement and user awareness
.

First of all, whether it is million medical insurance, Huimin Insurance or pharmaceutical insurance, low price is its core feature, so it must control the actual loss ratio
.
If the products outside the medical insurance catalogue are fully opened, the existing premiums cannot be supported.
Therefore, only a small part of the medicines outside the catalogue can be covered
.
Since most users are only willing to pay less than 500 yuan, and are unwilling to pay thousands of yuan for medical insurance, or only have the ability to purchase a few hundred yuan of commercial insurance (the average annual premium for individuals with China’s 1 billion residents’ medical insurance is less than 300 yuan, and the rest 70% is financial subsidy)
.
As a result, the total amount of payable medical insurance is always very low, and it is particularly important to control risks
.

Second, the positioning of commercial insurance is always a supplement to medical insurance, not a substitute for medical insurance
.
Since medical insurance is the main payment force, the size of commercial insurance is always small, and bargaining power does not exist.
A more realistic way is to supplement medical insurance
.
On the one hand, the self-paid part after medical insurance reimbursement is included in the scope of reimbursement, and on the other hand, it is also appropriate to increase products out of the catalog to attract customers and improve its own sales capabilities
.
However, with the current size of commercial insurance, it is impossible to cover all the drugs and consumables that are not in the medical insurance catalog.
Only appropriate drugs with marketing value that can increase sales can be selected to increase the scale of their premiums
.

Finally, how the drug catalog is established is affected by the front-end sales demand.
Because users do not have a clear concept of what drugs will enter the commercial insurance catalog, but because of the successful promotion of drugs like O and K, the user’s awareness has been very strong.
Including it is difficult to convince users.
At the same time, adding some newly approved new drugs will help reflect the immediacy of their products
.
For other drugs, they are distinguished according to their risks and attractiveness to customers, and it is not necessary to add drugs that are not in the medical insurance list
.

In general, drug-related insurance mainly uses drugs as a selling point to improve sales capabilities as the main starting point, and uses users' existing knowledge to drive the increase in the scale of their own premiums
.
However, due to the low premium price, the scale of premiums that can be brought is relatively limited, and it is difficult to achieve real scale, which in turn limits the scale of compensation, and the value of improving the availability of drugs outside the medical insurance catalog is relatively limited
.