20 Million Patients Stranded at the Last Mile: How Shanghai’s Rare Disease专项 Fund Could Reshape Pharmaceutical Supply Chain Resilience

For over two decades, global supply chain professionals have optimized logistics networks for speed, cost, and traceability—yet one of the most consequential supply chains remains stubbornly unoptimized: the last-mile delivery of life-sustaining rare disease therapies. Unlike consumer goods or even standard chronic disease medications, rare disease drugs face a uniquely complex convergence of clinical, regulatory, financial, and operational constraints. As of early 2026, an estimated 20 million people in China live with a rare disease, yet fewer than 100 rare disease drugs are covered under the national basic medical insurance (BMI) catalog, spanning just 42 disease indications. This leaves more than 58 rare diseases with zero reimbursed treatment options—and for those with partial coverage, systemic bottlenecks persist far beyond formulary inclusion. The challenge is no longer primarily about drug development or regulatory approval; it is about supply chain integrity across policy, payment, procurement, and clinical implementation layers.

The Anatomy of a Systemic Breakdown

Rare disease pharmaceutical supply chains operate under what industry analysts term ‘inverse scalability economics’: high R&D costs, ultra-low patient volumes, and steep manufacturing complexity—yet demand uninterrupted, lifelong continuity of care. Take Gaucher disease, a lysosomal storage disorder affecting ~3,000 patients in China. Enzyme replacement therapy (ERT), the standard-of-care, carries an annual treatment cost of ~¥1 million per patient. While several ERTs have entered China’s market via the National Medical Products Administration’s (NMPA) expedited review pathway, only select formulations are included in BMI—and crucially, none currently cover pediatric indications for all approved agents. This creates a paradox: a drug may be ‘available’ on paper, but clinically unusable for children due to labeling restrictions.

Compounding this, the nationwide rollout of Diagnosis-Related Groups (DRG) and Disease-Severity Based Payment (DIP) systems has introduced a powerful disincentive for hospitals. Under DRG/DIP, rare disease cases are often classified into low-weighted, generic categories that fail to reflect their true resource intensity. A single Gaucher patient admission may trigger an average hospital loss of ¥280,000–¥420,000—not from drug cost alone, but from extended ICU stays, multidisciplinary diagnostics, genetic counseling, and infusion monitoring. Consequently, hospitals increasingly defer admissions, refer patients out-of-network, or decline prescriptions altogether—even when the drug is BMI-covered. This is not a failure of logistics; it is a failure of payment architecture that fractures the end-to-end supply chain at its most critical node: the point of care.

From Fragmented Pilots to Integrated Infrastructure

China’s response to this challenge has been highly decentralized and experimental. Since 2013, Shanghai pioneered a multi-channel ‘ad hoc’ model for Gaucher disease—leveraging temporary hospital-level procurement, corporate donations, charitable funds, and the Shanghai Children’s Hospitalization Fund. At its peak, this patchwork enabled over 20 pediatric patients to receive continuous ERT for more than a decade, some returning to school and employment. Yet as revealed in 21st Century Business Herald reporting, this model is now at risk of collapse: the original fund, administered through a single tertiary hospital, faces discontinuation due to lack of statutory backing, shifting administrative priorities, and donor fatigue.