China’s Rare Disease Market: Why Now Is the Time for Pharma to Invest and How to Succeed

Authored by: Marc Yates

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In previous articles, we examined how China’s digital platforms like WeChat are transforming patient behavior and access to care and how fully integrated digital ecosystems are redefining the delivery of healthcare. In this latest article, we shift focus to the next wave of innovation and how artificial intelligence is reshaping clinical practice, improving outcomes, and advancing a more responsive, data-driven healthcare system across China.

China’s healthcare landscape is undergoing a much-needed rare disease revolution. Before 2018, the country lacked an official classification system for rare diseases, which posed significant challenges for diagnosis, treatment, and drug development. The first official list was developed in 2018, followed by a major expansion in 2023. Since then, China has made remarkable progress, regulatory frameworks have matured, incentives have grown, and new channels for patient access are emerging. For rare disease drug companies eyeing international expansion, China is becoming an increasingly viable and compelling market. To ensure commercial success, however, companies must navigate a dynamic and complex environment with precision. Companies must also consider ethical engagement, ensuring access, affordability, and collaboration with local stakeholders to deliver long-term patient benefit.

A Market Now Defined – and Growing

China’s rare disease market was once fragmented, underregulated, and poorly understood. Today, it’s governed by a clearer definition (prevalence below 1 in 10,000 or fewer than 140,000 patients). This definition differs from those in the US and EU. While the US defines rare diseases as those affecting fewer than 200,000 people nationwide (~6.4 per 10,000), and the EU uses a threshold of fewer than 5 per 10,000, China’s lower prevalence threshold reflects its large population (approximately 1.4 billion)¹. Consequently, even diseases with relatively low prevalence can represent a significant absolute number of patients. China’s approach also incorporates economic and policy considerations, such as disease impact and treatment feasibility, beyond pure prevalence metrics.

Policy Incentives and Regulatory Progress

To stimulate orphan drug development, China has introduced various incentives, including tax reductions on imported orphan drugs and expanded insurance coverage. The National Reimbursement Drug List (NRDL) has progressively included rare disease medications, with over 90 drugs now covered². Since 2017, 28 orphan drugs have been added through price negotiations, achieving an average price reduction of nearly 56%. In 2023 alone, 15 orphan drugs covering 16 rare diseases were included, targeting conditions with high unmet needs such as Gaucher disease and myasthenia gravis³.

Enhanced Diagnosis and Patient Support

A nationwide collaborative hospital network now spans all provincial-level regions, encompassing 419 hospitals. This network has dramatically reduced the average diagnostic waiting time from four years to less than four weeks and cut diagnostic costs by up to 90%⁴.

Technological innovation is also playing a vital role. The China Alliance for Rare Diseases (CARD) has launched a digital health platform that supports intelligent diagnosis, patient management, clinical research, education, and drug development⁵. Building on the infrastructure discussed in our article on China’s digital healthcare transformation, additionally, Peking Union Medical College Hospital (PUMCH), in partnership with the Chinese Academy of Sciences, developed PUMCH-GENESIS, a large language AI model designed to improve diagnostic accuracy and efficiency using extensive rare disease datasets⁶.

Unique Regional Initiatives and Research Funding

Hainan’s Boao Lecheng International Medical Tourism Pilot Zone offers a novel regulatory approach by allowing access to 45 internationally approved rare disease drugs not yet authorized elsewhere in China⁷.

Moreover, funding from the National Natural Science Foundation of China and the Ministry of Science and Technology supports research on complex and rare diseases and the establishment of a national key laboratory, fostering innovation and scientific breakthroughs.

Patient Advocacy and Social Support

Patient organizations such as the Beijing Illness Challenge Foundation and CARD have strengthened networks connecting patients, healthcare experts, and policymakers. These collaborations provide emotional and social support, helping to reduce isolation and improve quality of life for individuals living with rare diseases. Integrating patient perspectives early in research, trial design, and commercialization, will not only improve outcomes, but also align with ethical principles of respect and transparency.

Commercialization Challenges

Despite these measures, commercialization is far from straightforward, and entry barriers remain high. Approval delays still average 5 years behind other markets like Japan, the EU, and the US, something the Chinese government is trying to address. Drug affordability, infrastructure gaps, and regional disparities create additional hurdles. As with the digital transformation outlined in our earlier piece on evolving patient behavior, to navigate this terrain, companies are going to need more than regulatory guidance; they need deep market insight.

Where Insights Add Value

Robust market research is essential to:

• Understand patient demographics and diagnostic journeys: Despite progress, delays in diagnosis and low awareness remain common. Mapping these journeys helps identify where interventions can make the greatest impact and where commercial efforts should focus.
• Inform pricing and reimbursement strategy: With budget pressures and regional funding mechanisms at play, understanding what payers value – and how competitors position themselves – is critical to negotiating NRDL inclusion or designing alternative access models.
• Assess stakeholder behavior: Research can illuminate how physicians, patients, and policymakers perceive rare disease treatments, including willingness to prescribe, use, or fund novel therapies.
• Size the opportunity: Epidemiological research can quantify addressable markets, while segmentation work helps prioritize regions, hospital networks, or HCP specialisms.
• Track the evolving policy and access landscape: China’s regulatory environment is still maturing. Regular market scans and stakeholder interviews help ensure companies stay ahead of change.
• Evaluate competitive positioning: Benchmarking local and multinational competitors can uncover white space opportunities and inform partnership or licensing strategies.
  

Looking Ahead: Tailor-made Insights for a Complex Market

We see lots of opportunity, but also amid great complexity and ethical consideration. Companies cannot afford to rely on assumptions or one-size-fits-all models. They must invest in primary market research that reflects the unique cultural, policy, and healthcare dynamics at play. For those who invest in understanding and addressing local needs, the potential for both patient impact and commercial success is significant.

Interested to find out more?

If you would like to find out how to play and win in China, speak to one of our experts.

References 

1. Lu, Y., & Han, J. (2022). The definition of rare disease in China and its prospects. Intractable & Rare Diseases Research, 11(1), 29–30. https://www.jstage.jst.go.jp/article/irdr/11/1/11_2022.01034/_pdf/-char/en
2. (2024, November). Promoting access to innovative drugs: A review of national drug price negotiation in China [Conference presentation]. ISPOR Europe 2024. https://www.ispor.org/heor-resources/presentations-database/presentation/euro2024-4014/144625
3. Lu, C.-F., Zhang, D. (Dan), & Zhang, E. (2024, March 7). China NHSA publishes 2023 NRDL, implements pricing discounts: Lessons from China’s 2023 national negotiation of drug prices. National Law Review. https://natlawreview.com/article/china-move-lessons-chinas-2023-national-negotiation-drug-prices
4. Xinhua News Agency. (2025, May 26). China builds momentum in rare disease treatment and care. China Daily. https://govt.chinadaily.com.cn/s/202505/26/WS6837c9f9498eec7e1f7381fa/china-builds-momentum-in-rare-disease-treatment-and-care.html
5. Peking Union Medical College Hospital (PUMCH). (2025, February 16). PUMCH GENESIS: Groundbreaking AI model for rare diseases officially begins clinical use, facilitating tiered healthcare. https://www.pumch.cn/en/detail/40162.html
6. Xinhua News Agency. (2025, May 25). China Focus: China builds momentum in rare disease treatment and care. Xinhua. https://english.news.cn/20250525/be704d7741e94bbaa15fe2969b7468c6/c.html
7. China Daily. (2024, November 24). China’s real-world medical data pilot project makes major progress. China Daily. https://www.chinadaily.com.cn/a/202411/24/WS6742cce2a310f1265a1cf410.html