Local authorities have been tasked with compiling a so-called whitelist of medical products that can be purchased at retail pharmacies using personal healthcare insurance accounts, in a bid to crack down on the illicit use of such funds to buy cosmetics, health supplements and other unrelated items, according to a notice released on Tuesday.

The whitelist may include drugs, medical devices such as thermometers, blood pressure monitors, blood glucose testers and rehabilitation aids, as well as medical consumables including masks, plasters and pregnancy test strips, said the document jointly issued by the National Healthcare Security Administration and the Ministry of Finance.

The notice explicitly bans groceries, including rice, cooking oil and flour, as well as cosmetics and health supplements, from the list. Also excluded are toothpaste, dental floss, facial masks, sunscreen products, sanitary pads, contact lenses and lifestyle gadgets such as massage devices, smartwatches and fitness trackers.

Provincial-level healthcare security administrations are required to formulate the whitelists by the end of September, authorities said.

China's basic medical insurance program for employees covers nearly 389 million people nationwide, accounting for about 30 percent of the total population.

The program includes personal healthcare accounts that can be used to purchase medicines at designated pharmacies and cover part of outpatient and hospitalization expenses. However, authorities have found that money in these personal accounts has been used to purchase nonmedical items.

In a recent case, retail pharmacies in Hunan and Henan provinces were found to have settled payments for cosmetics, health supplements and daily necessities by fraudulently recording them as insurance-covered medications.

According to authorities, the latest move to establish the whitelist is aimed at "regulating the use of employee basic medical insurance personal accounts in a reasonable, prudent, flexible and measured manner, preventing the inclusion of unreasonable expenses that fall outside the scope of basic medical coverage, and resolutely safeguarding the security of medical insurance funds".

The notice added that the whitelist is dynamic and will be adjusted based on public demand and advances in medical technology.

Some products currently excluded could be added in the future if their medical functionality becomes primary and their pricing becomes appropriate, it said.