DRG/DIP Payment 3.0 Adjustment Plan Released - What Impact Does It Have on the Pharmaceutical Industry?

Daily Economic News Reporter | Zhang Hong Daily Economic News Editor | Zhang Yiming

On March 20, the National Healthcare Security Administration announced the adjustments to the 3.0 version of the Diagnosis-Related Group (DRG) payment grouping plan.

In July 2024, the National Healthcare Security Administration issued version 2.0 of the DRG payment grouping plan, which refined and optimized the 1.0 version released in 2020. In August 2025, the administration formulated the “Interim Measures for Medical Insurance Payment Management by Diagnosis-Related Groups,” clarifying that the grouping plan will generally be adjusted every two years.

According to reports from the Daily Economic News (hereinafter referred to as the Daily), this adjustment involved merging or splitting some disease groups, while also considering medical development and the application of new technologies. To accommodate the widespread use of robot-assisted orthopedic surgeries, a new dedicated code “17.4100 Open Robotic Assistance Operation” has been added to the disease groups under review. The adjustment also focused on disease groups with high clinical demand, such as “M17 Knee Joint Disease,” “S32 Lumbar Spine and Pelvic Fractures,” and “S72.0 Femoral Neck Fractures,” establishing corresponding groupings.

The latest news from the National Healthcare Security Administration indicates that version 3.0 of the DRG payment grouping plan is expected to be released this July, with official implementation planned for January 2027.

What impact will this have on the industry?

Which adjustments are worth noting? How will this impact the pharmaceutical industry?

Senior healthcare security expert Tian Haoling told the Daily that the fundamental logic behind the 3.0 adjustment remains unchanged. The more detailed grouping—considering disease types, treatment methods, and severity—maximizes the interests of all major stakeholders involved in healthcare payment, allowing the fund’s efficiency to be fully realized. The biennial adjustment cycle and iterative updates of the grouping version not only promote rapid policy implementation but also enable precise, dynamic valuation of medical technologies.

She believes there are several key directions in this disease group adjustment worth paying attention to.

First, refined surgical grouping will drive innovation in high-value consumables and surgical techniques.

Separately grouping bilateral/unilateral or combined surgeries (such as bilateral knee replacements or combined liver-pancreas resections) prevents high-resource-consuming cases from being lumped together with ordinary cases. This means high-value consumable companies need to develop products better suited for complex surgical scenarios, such as specialized prostheses for bilateral joint replacements. Hospitals will prefer cost-effective consumables, shifting industry focus from “price competition” to “value competition.” The value of advanced technologies like surgical robots will be more accurately recognized, providing related companies with greater market opportunities.

Second, incorporating full-course management into grouping creates new opportunities for innovative drugs and off-site markets.

Including the entire pathway of radiotherapy, chemotherapy, targeted therapy, and immunotherapy for malignant tumors allows the value of innovative drugs to extend from inpatient use to full-course management, facilitating the promotion of anti-tumor medications. This can be achieved through dual-channel off-site pharmacies providing in-depth services to insured patients with needs.

Third, differentiating disease weights based on populations such as children, chronic disease patients, the elderly, rare diseases, and severe cases, while also refining grouping for critical and severe cases. This will stimulate R&D enthusiasm among related pharmaceutical companies and better focus on product value.

Exploring the integration of DRG and DIP

He Yazhen, head of the DIP technical guidance team, explained that DIP (Diagnosis-Related Group Point-based Budgeting) is a method for hospital inpatient cost settlement based on regional point systems and DRG payment. It leverages big data to establish a healthcare payment management system, including regional total budgets, disease groupings, payment standards, cost settlement, and supervision. It features significant advantages in theory and grouping strategies, representing an original Chinese healthcare payment model with distinctive characteristics of the era.

This adjustment is based on recent real settlement data, maintaining the basic rule of “main diagnosis + main procedure (+ related surgical procedures).” About 80% of disease groups will be automatically clustered according to this rule. Additionally, the grouping process has been optimized, following the overall principle of “coarse when coarse, fine when fine,” exploring the integration of DRG (Diagnosis-Related Group) and DIP, including practices like exclusion lists and preliminary grouping from DRG, to refine grouping rules through merging, splitting, and auxiliary factors.

“Coarse when coarse” refers to merging related surgical procedures and diagnoses; “fine when fine” involves more detailed grouping based on clinical practice, possibly incorporating individual patient features as auxiliary factors. Specifically, this includes four aspects: first, merging related procedures performed during the same hospitalization that meet clinical standards; second, merging diagnoses with similar procedures and resource consumption; third, subdividing diagnoses with significant resource differences due to severity; and fourth, grouping based on auxiliary factors like age, complications, or severity when primary diagnosis codes do not fully reflect resource use.

Tian Haoling pointed out that the implementation of DRG version 3.0 will promote hospitals toward lean operations: through precise clinical pathway management, cost accounting for disease groups, and data quality control, reshaping a performance system that prioritizes quality and controllable costs. For pharmaceutical companies, this will mark the end of the “price war” era—innovative drugs will need to demonstrate clinical value through real-world data and gain market access via dynamic negotiations, special agreements, and insurance catalog pathways. Mature drugs should focus on their advantageous disease groups and collaborate with clinicians to optimize product structures. Ultimately, patients will benefit from transparent medical costs and balanced resource allocation, ensuring sustainable healthcare funds, improving hospital service efficiency, and enabling pharmaceutical companies to return to innovation, maximizing the win-win situation among healthcare, medical, pharmaceutical, and patient interests.