JP Morgan: Accelerating innovation drug commercialization through adjustments in healthcare directory, with a preference for INNOVENT BIO (01801) and others.

J.P. Morgan released a research report stating that the National Medical Insurance Administration issued the "Work Plan for Adjusting the Drug List and Commercial Health Insurance Innovative Drug List of the National Basic Medical Insurance, Maternity Insurance, and Work Injury Insurance in 2026 (Consultation Draft)", introducing several favorable market rule changes, which are expected to further improve the commercial prospects of Chinese innovative drug developers and their CXO partners. The bank believes the most important change is the first-time allowance for drugs to apply for inclusion in the medical insurance list before obtaining formal approval, expecting to significantly shorten the time difference between drug approval and inclusion in medical insurance from one to two years in history. In addition, the new plan formally establishes a connection mechanism between commercial insurance and the national medical insurance list, pioneering a "commercial insurance leading, medical insurance following" model, opening doors for high-priced innovative drugs that previously had difficulty entering medical insurance due to pricing issues. JP Morgan stated that the pre-application mechanism is a direct catalyzing factor for innovative drug companies with assets in NDA review stage or close to NDA stage, earlier inclusion in medical insurance means faster sales growth and clearer revenue visibility. The report points out that the formal establishment of the bridge path from commercial insurance to the national medical insurance list validates the dual-list strategy that many innovative drug companies have been pursuing. Currently, drugs covered by commercial insurance but not included in the national medical insurance list, have particular significance under the new rules as their retail prices have historically exceeded the acceptable range of medical insurance negotiations. The bank believes that clear renewal rules will provide innovative drug companies with a more transparent long-term pricing roadmap, and the acceleration of the commercialization process of Chinese innovative drugs will directly benefit their CXO partners. J.P. Morgan reiterated its positive views on INNOVENT BIO (01801), SKB BIO-B (06990), WuXi AppTec (02359) and WUXI XDC (02268), and listed them as top picks in the industry.