China's National Healthcare Security Administration (NHSA) will soon roll out stricter regulation of medical insurance funds through a nationwide implementation of drug traceability codes.
According to Chinese news agency Xinhua the initiative intends to curb fraudulent activities such as the resale and substitution of insured medications, as well as the misuse of medical insurance cards and counterfeit prescriptions.
The drug traceability code is a unique electronic ID for each medication and, will be used to build large-scale data models to enhance regulatory oversight. The NHSA will use this data to identify and crack down on violations, strengthening enforcement actions against illegal activities.
According to industry sources it is necessary to upgrade the national medicine supply security code, which can track the medical distribution process to ensure transparency and accountability.
A statement by NHSA said that it had launched a nationwide pilot program for the collection and use of traceability codes in April 2024 and in November 2024 it publicly questioned 46 designated medical institutions about duplicate claims associated with these codes. This exercise marked the first step toward regulating medical insurance funds through traceability technology.
The NHSA has held two rounds of discussions with over 100 pharmaceutical companies to guide self-inspection, address potential violations, and clarify regulations. The local health authorities have also been asked to organise similar outreach activities in their respective areas.
The NHSA has called for strict adherence to regulations and ensure self-checks and report violations.
NHSA has said that other fraudulent practices like empty billing and dealing in illegally sourced drugs should also be avoided and ethical procurement practices should be ensured.
In September 2024, the Chinese authorities had detected medical insurance funds suspected of violating relevant regulations to the extent of over CNY2.2bn ($313.83m).