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Health insurance programs have changed rapidly over time in China. Among rural populations, insurance coverage shifted from nearly universal levels in the 1970s to 7% in 1999; it stands at 94% of counties in 2009. This large increase is the result of a series of health reforms that aim to achieve universal access to healthcare and better risk protection, largely through the rollout of the health insurance programs and the gradual increase in subsidies and benefits over time. In this paper, we present the development of the rural and urban health insurance programs, their modes of financing and operation and the benefits and reimbursement schemes at the end of 2009. We discuss some of the problems with the rural and urban residents' schemes including reliance on local government capacity, reimbursement ceilings and rates, and incentives for unnecessary care and waste in the design of the programs. Recommendations include increasing financial support and deepening the benefits packages. Strategies to control cost and improve quality include developing mixed provider payment mechanisms, implementing essential medicines policies and strengthening the quality of primary-care provision. Copyright © 2011 John Wiley & Sons, Ltd.

Generic drugs should be interchangeable with originators in terms of quality and efficacy. With relative lower prices, generic drugs are playing an important role in controlling health expenditures and ensuring access. However, the widespread understanding of “cheap price equals low quality” has a negative impact on the acceptance of generic drugs. In China, medical doctors doubt the efficacy and quality of generic drugs manufactured domestically. To address these concerns, the Chinese State Council released a policy in 2016 to ensure the interchangeability by re‐evaluating the quality and efficacy of generic drugs. It intends to make up a missed lesson in the regulation to be in line with internationally accepted practices. Generic drugs firms, depends on the availability of appropriate comparators, should conduct either comparative bioequivalence studies or full scale clinical trials. The re‐evaluation will be implemented in a stepwise approach with the essential medicines covered in the first step. The policy could achieve several benefits by increasing confidence on the Chinese produced generic drugs, upgrading regulatory standards, streamlining the Chinese generic drug industry and creating a healthy competition market. Nevertheless, enormous challenges remain in enlarging the capacity to review applications, selecting appropriate comparators, ensuring the capacity of domestic clinical research sites, and achieving the acceptance of re‐evaluated generic drugs.