<div id="readability-page-1"><div>JPMorgan issued a research report noting that the National Healthcare Security Administration released the &#34;Work Plan for the Adjustment of the 2026 National Reimbursement Drug List for Basic Medical Insurance, Maternity Insurance and Work Injury Insurance and the Innovative Drug List for Commercial Health Insurance (Draft for Consultation)&#34;, introducing multiple market-friendly rule changes. The bank expects the measures to further improve the commercialization outlook for innovative drug developers in China and their CXO partners.The bank believes the most important change is the first-time allowance for drugs to submit NRDL applications prior to formal approval, which is expected to significantly narrow the historical one- to two-year gap between drug approval and NRDL inclusion. In addition, the new plan formally establishes a linkage mechanism between commercial insurance and the national NRDL, creating a &#34;commercial insurance first, NRDL follow-up&#34; model. This opens the door for high-priced innovative drugs that previously struggled to enter the NRDL due to pricing constraints. JPM stated that the pre-application mechanism serves as a direct catalyst for innovative drug companies with assets in the NDA review stage or approaching the NDA stage. Earlier NRDL inclusion implies faster sales ramp-up and clearer revenue visibility.The report pointed out that the formal establishment of a bridging pathway from commercial insurance to the NRDL validates the dual-list strategy long pursued by many innovative drug companies. For drugs currently covered by commercial insurance but not included in the NRDLoften because their retail prices previously exceeded the acceptable range in NRDL negotiationsthe new rules are particularly meaningful. The bank believes that clearer renewal rules will provide innovative drug companies with a more transparent long-term pricing roadmap, while the acceleration of innovative drug commercialization in China will directly benefit their CXO partners. JPM reiterated its positive view on INNOVENT BIO (01801.HK) -0.050 (-0.057%) Short selling $229.66M; Ratio 17.428% , SKB BIO (06990.HK) +4.200 (+0.935%) Short selling $23.57M; Ratio 8.326% , WUXI APPTEC (02359.HK) -0.700 (-0.507%) Short selling $192.96M; Ratio 33.556% and WUXI XDC (02268.HK) +1.200 (+2.190%) Short selling $15.80M; Ratio 4.583% , naming them as sector top picks. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-11 16:25.)</div></div>

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JPMorgan's report highlights the National Healthcare Security Administration's new plan for the 2026 National Reimbursement Drug List, which allows drugs to apply for NRDL inclusion before formal approval. This change is expected to enhance the commercialization prospects for innovative drug developers in China. The report identifies INNOVENT BIO, WUXI APPTEC, WUXI XDC, and SKB BIO as top picks, benefiting from clearer pricing rules and faster market access for high-priced drugs.

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WUXI APPTEC

SKB BIO

WUXI BIO

TEDA BIOMEDICAL

INNOVENT BIO

WUXI XDC

ChinaAMC CSI Biotechnology Theme ETF

China Southern Hang Seng Biotech ETF(QDII)

E Fund Hang Seng SCHK Innovative Drug ETF

ChinaAMC Hang Seng Biotechnology Technology ETF(QDII)

Penghua SSE STAR Biology and Medicine ETF

GF CSI HK Innovative Drugs Industry ETF(QDII)

Minsheng Royal CSI Biotechnology Theme ETF

E Fund CSI Biotechnology Theme ETF

ICBCCS SSE STAR Biology and Medicine ETF

ChinaAMC SSE STAR Biology and Medicine ETF

China Universal CNI HK Connect Innovative Drugs Industry ETF

Huaan Hang Seng Biotech ETF

Tianhong CNI BIOMEDICINE ETF

E Fund CSI 300 Health Care ETF

China Merchants CSI Biotechnology Theme ETF

Guotai CSI Hugangshen Innovative Drugs Industry ETF

Fullgoal Hang Seng SCHK Innovative Drug & Healthcare ETF

Yinhua CSI Innovative Drugs Industry ETF

Guotai CSI Bio-medicine ETF

Huatai-PB Hang Seng Innovative Drugs Industry ETF(QDII)

Guotai SSE STAR Brand Name Drug ETF

ChinaAMC SSE Health Care ETF Initiating Fund

Bosera Hang Seng SCHK Innovative Drug Select ETF

Ping An CSI Medicine and Medical Device Innovation ETF

Penghua CSI HK Connect Health Care Composite ETF

Hwabao WP Hang Seng SCHK Innovative Drug Select ETF

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JPM: NRDL Adjustment to Accelerate Commercialization of Innovative Drugs; Top Picks INNOVENT BIO , WUXI APPTEC , WUXI XDC , SKB BIO