What is the reasonable price of a pill? This problem has puzzled China’s medical reform for many years. The game among patients, hospitals, pharmaceutical companies and medical insurance departments around drug prices has almost run through the whole process of medical reform in China. After 2018, after the establishment of the National Health Insurance Bureau, a series of national big moves led the medical reform in China to the deep water area step by step. Nowadays, quantity purchasing (centralized purchasing) and medical insurance negotiation have become two mechanisms for the formation of medical prices. After the announcement of the results of the seventh batch of centralized drug procurement organized by the state, the prices of many drugs have been greatly reduced, and the centralized drug procurement system has continuously brought long-term and profound changes to the medical field, especially to the prices of drugs and the interests of patients. At the same time, the supporting system of centralized drug procurement with quantity is also facing many difficulties and challenges to be solved urgently. It is of great significance to continuously reform and improve the supporting system and promote the normalization and efficiency maximization of the centralized drug procurement system to create a good medical environment and enhance people’s livelihood and well-being.
1. Centralized drug procurement benefits people’s livelihood and enhances well-being.
What is centralized drug procurement? Centralized drug procurement with quantity is an important measure to promote the supply-side reform of medical services. Since the 19th National Congress of the Communist Party of China, in accordance with the decision-making arrangements of the CPC Central Committee and the State Council, the reform of centralized drug procurement with quantity has achieved remarkable results, which has played an important role in enhancing people’s livelihood and well-being, promoting the linkage reform of the three hospitals, and promoting the healthy development of the pharmaceutical industry. On July 18th, the Office of Joint Procurement of Drugs organized by the State issued the Notice on Announcing the Successful Results of National Centralized Procurement of Drugs (GY-YD2022-1). According to the notice, the results of this centralized procurement will be implemented in November 2022. 60 kinds of drugs were successfully purchased in this collection, and the average price of the selected drugs was reduced by 48%, involving 31 treatment categories. According to the agreed purchase volume, it is estimated that the annual cost can be saved by 18.5 billion yuan.
Since its establishment in May 2018, the National Health Insurance Bureau has resolutely implemented the decision-making and deployment of the CPC Central Committee and carried out the procurement of drugs with quantity. Up to now, it has carried out seven batches of centralized procurement of drugs organized by the state, covering a total of 294 drugs. According to the Blue Book on the Progress and Effectiveness of Medical Insurance Drug Management Reform in China released by China Pharmaceutical Association and China Medical Insurance Research Association on November 3, 2021, from the five batches of centralized drug purchase carried out from 2018 to September 2021, the centralized drug purchase organized by the state has covered the mainstream drugs of chronic diseases and common diseases such as hypertension, diabetes, hyperlipidemia and chronic hepatitis B, covering 218 varieties, with an average decline of over 50%. Since the reform of centralized purchasing, as of September 2021, the accumulated cost savings are about 250 billion yuan.
The advantage of national centralized drug procurement is that the top-level design and supporting measures are more perfect. At the same time, the seventh batch of centralized purchasing fully considers the actual production capacity of enterprises, and introduces the standby supply mechanism for the first time. Each province will have a main supplier and a standby supplier at the same time, that is, "one province and two suppliers", which not only strengthens the enterprise’s performance responsibility, but also provides patients with "double insurance" — — Even if the main supplier fails to supply, the auxiliary supplier can immediately continue to supply. This adjustment ensures the stability of clinical use and puts more emphasis on supply guarantee. The procurement with quantity is normalized, and the rules are gradually moderate and perfect. This procurement method is very conducive to reducing the burden of medical insurance funds and significantly reducing the cost of medication for patients. At present, quantity purchasing and medical insurance negotiation have become two main mechanisms for the formation of medical prices, and it is a policy that benefits the people and the country to jointly promote the rationality of medical prices.
2. The major reform of drug procurement system is both an opportunity and a challenge.
Under the organization and guidance of the National Medical Insurance Bureau and other relevant departments, all provinces in China formed a procurement alliance to carry out the seventh batch of centralized procurement of drugs organized by the state, and the results of the proposed selection were produced on July 12 and announced on July 18. The new mode of centralized drug procurement has brought long-term and profound influence to hospitals, pharmaceutical companies, medical insurance and patients. So how do we view the seventh batch of centralized drug procurement organized by the State Medical Insurance Bureau?
From a macro point of view, the centralized procurement of drugs organized by the State Medical Insurance Bureau is a drug procurement mode that the State Medical Insurance Bureau implements the strategy of healthy China and takes people’s lives and health as the fundamental starting point of reform. It squeezes out the water in the drug sales industry by administrative means, saves the national medical insurance fund as much as possible, and uses the precious medical insurance fund to the cutting edge to ensure the lives and health safety of ordinary people.
From a microscopic point of view, the National Medical Insurance Bureau took the initiative to perform its duties, set up a comprehensive service platform for centralized drug procurement organized by the state through investigation, analysis, demonstration and absorption of public participation, invited medical insurance negotiators to negotiate with domestic and foreign pharmaceutical companies, and implemented centralized drug procurement organized by the state, so that pharmaceutical companies can enter the centralized procurement market at the lowest price on the premise of ensuring drug safety, efficacy, specifications and dosage, thus realizing the accessibility of patients’ medication.
At the same time, the centralized drug procurement organized by the state is a "double-edged sword", which is an opportunity and a challenge for all stakeholders.
For pharmaceutical companies, the opportunities are: the profit margin is greatly compressed, the unreasonable drug price moisture is squeezed out, and a huge sales market is obtained by reducing unnecessary expenses in intermediate links; To a certain extent, it can encourage pharmaceutical companies to increase investment in research and development, accelerate the introduction of innovative drugs, promote the formation of industrial clusters and large-scale production in the pharmaceutical industry, and promote the healthy development of the pharmaceutical industry. The challenges faced by pharmaceutical companies include the following: First, how to reduce costs while ensuring the safety, efficacy and specifications of drugs are not adjusted. At the macro level, the state hopes to really use the medical insurance fund on drugs with safe and reliable curative effect and good quality and low price. Therefore, in the aspect of drug use, some drugs that are dispensable, have poor curative effect or have obvious toxic and side effects will be squeezed out. At the micro level, the state also hopes that pharmaceutical companies can better serve the people, improve the overall level of China’s pharmaceutical industry, change the situation of relying on generic drugs in the past, and change the situation that pharmaceutical companies emphasize marketing and neglect research and development. Therefore, pharmaceutical companies should improve the level of technological innovation and R&D capabilities, instead of sacrificing product quality in order to save costs, promote the benign development of the pharmaceutical market through technological upgrading, and eliminate enterprises that are only willing to produce generic drugs or low-end drugs. Second, at the same time, it is necessary to be vigilant to prevent individual pharmaceutical companies from breaking the contract without authorization after winning the bid. For example, because the quotation is too low, there is no profit or even loss, and the agreed purchase quantity cannot be supplied according to the agreement, and it is no longer supplied to medical institutions. At the same time, it also reminds enterprises that it is more rational to bargain with each other in the future bidding for centralized procurement, and the bidding strategy for centralized procurement must be carefully formulated.The price and production capacity must fully evaluate the existing conditions and potential risks, and leave a reasonable profit margin for themselves. Once winning the bid, they must accept strict contract management, otherwise they will pay the corresponding price. Third, it is also necessary to put an end to the phenomenon that individual pharmaceutical companies cut corners during supply after winning the bid. In order to win the bid, some enterprises control the production cost at the expense of reducing the quality of drugs, and must strictly supervise the successful pharmaceutical companies to supply according to the standard to prevent the occurrence of inferior quality products.
For hospitals, since 2018, seven batches of centralized drug procurement organized by the state, including this centralized procurement, have covered 294 kinds of drugs. According to the price before centralized procurement, the amount involved accounts for about 35% of the annual procurement of chemical drugs and biological drugs in public medical institutions. Centralized drug procurement has become an important mode of drug procurement in public hospitals. The opportunities are as follows: First, the centralized drug procurement organized by the state standardizes the drug use behavior of hospitals, so that doctors no longer directly face medical representatives and prevent them from being corroded by individual medical representatives. Second, the normalization of national centralized drug collection will purify the environment of hospital pharmaceutical industry. The national centralized drug purchase defines the purchase quantity, and ensures the use of drugs in hospitals by "exchanging the price for the quantity", so that the winning pharmaceutical companies no longer have to worry about drug sales, and there is no need to promote clinical use through kickbacks and other forms of "sales with gold", breaking the unspoken rules of drug sales, and legalizing and sunshine the income of doctors. The challenges are as follows: First, the centralized purchase of drugs with quantity affects the payment rate of medical insurance and the benefits of hospitals to a certain extent, and there is no positive incentive and long-term mechanism for medical institutions. In the process of centralized purchase, hospitals only have the report of the catalogue and the right to choose the winning varieties. It is necessary to deepen the reform of medical insurance payment methods, establish an incentive and risk sharing mechanism of "balance retention and reasonable cost overruns sharing" between medical insurance agencies and medical institutions, promote medical institutions to use selected drugs with appropriate prices, and reduce the operating costs of public medical institutions. Second,How to improve their own operation and management capabilities. National procurement with quantity will have a profound impact on the management mode of hospitals, and the development strategy of hospitals needs to be adjusted accordingly. Hospital management must grasp the needs of the new era of quantity procurement, from scale expansion to high-quality development, from extensive management to refined management. Gradually increase the income of hospital doctors, and make their income sunny and legal, comprehensively improve the medical service ability, and promote the high-quality, healthy and sustainable development of the pharmaceutical industry. Thirdly, how to gain the recognition of patients, increase the number of outpatients and hospitalizations and obtain more medical income through the continuous improvement of medical technology, medical effect and medical safety level. Medical institutions can set up the procedure of giving priority to the selection of centralized and quantity-purchased varieties in the doctor’s prescription information system, clinicians can prescribe according to common names, and pharmacists can strengthen prescription review and deployment. The procurement and use of selected drugs by medical institutions will be included in the performance appraisal of public medical institutions and the target responsibility assessment of the heads of medical institutions, and will be used as an important basis for the formulation of total medical insurance indicators to ensure that medical institutions give priority to the use of selected drugs according to clinical drug demand. At the same time, medical institutions should strengthen the monitoring of adverse reactions of selected drugs, and report suspected adverse reactions in time according to procedures.
For patients, especially those with chronic diseases, senile diseases and rare diseases, the state organizes centralized drug procurement to enable them to afford drugs and see diseases, and to use higher-quality drugs at lower prices, thus reducing the burden on patients. In the field of lowering blood pressure, sustained and controlled release dosage forms were included for the first time in the seventh national acquisition. The price of nifedipine controlled release tablets and metoprolol sustained-release tablets was reduced by 58% and 53%, respectively, and the drug burden of patients with hypertension was significantly reduced. The antiviral drug oseltamivir dropped from average 4.5 yuan to 1 yuan per tablet. In addition, tigecycline from Pfizer in the United States, micafungin from Anstalai Company in Japan, ebastine from Emmero Company in Spain and iopamidol from Boleko Xinyi Company in Italy were selected, with an average price reduction of 67%. The revolutionary anti-cancer drug Ranvartinib has been listed in China since 2018, and it has been collected this year. The people of China have benefited from the reform of "collecting all the medicines" and can use it at the lowest price in the world, one pill of 3.2 yuan.
3. There is an urgent need to improve the relevant supporting systems for centralized drug procurement.
At present, China is promoting the normalization and institutionalization of centralized drug procurement, improving the working mechanism of government organization, alliance procurement and platform operation, and accelerating the formation of a unified and open national centralized drug procurement market. According to the current situation of centralized drug procurement organized by the state, the reform goal is being realized step by step. With the normalization and institutionalization of centralized drug procurement, it is urgent to improve the relevant supporting systems. Based on the problems and challenges in the implementation of the system reform, the author puts forward the following suggestions.
The first is to achieve synergy at the national and local levels. At the national level, drastic reforms are being carried out, even those with inward cutting edges. However, due to local protectionism, all localities are unwilling to reform some backward production capacity and backward enterprises, and such a situation must be avoided. The National Medical Insurance Bureau should earnestly shoulder the responsibility of overall coordination, supervision and guidance for the normalization and institutionalization of drug centralized procurement, improve relevant policies and measures, and carry out monitoring and analysis, supervision and inspection, and summary and evaluation in a timely manner. The Ministry of Finance, the Ministry of Commerce, the General Administration of Market Supervision and other relevant departments should strengthen policy coordination and work cooperation to form a joint force. The local people’s governments should strengthen the organization and leadership of the centralized drug procurement in the region, thoroughly implement various policies and measures, actively carry out exploration and innovation, and ensure the orderly progress of the centralized drug procurement.
Second, in view of the problems in the reform process, make timely policy adjustments and improve the procurement mechanism. At the national level, we should do a good job in research, analysis and judgment while formulating policies, and do a good job in monitoring during the reform process to find and solve problems in time. On November 4, 2021, the Office of the National Health Insurance Bureau issued the Notice on Doing a Good Job of Continuation after the Expiration of the Purchase Agreement of Centralized Drugs Organized by the State, so as to ensure the smooth continuity after the expiration of the purchase agreement and stabilize the current price. Provincial and municipal levels should continue to take into account comprehensive quality, production capacity, credit and other factors, adhere to the integration of recruitment and procurement, and link quantity and price, stabilize the current price, safeguard the interests of the selected enterprises, and ensure the normal supply of drugs. In addition, it is necessary to constantly improve supporting policies such as drug quality supervision, production and supply, circulation and distribution, medical services, medical insurance payment, and market supervision, strengthen departmental linkage, pay attention to reform system integration, coordination and efficiency, and support and promote each other with the centralized drug procurement system. At the same time, we will further improve the alliance procurement mechanism and promote the construction of regional and national alliance procurement mechanisms in accordance with the requirements of government organizations, alliance procurement and platform operation. The medical security department shall, jointly with relevant departments, guide or organize relevant regions and medical institutions to form a centralized drug procurement alliance, strengthen work coordination, deploy and implement key tasks, and further improve the normalized and professional operation mechanism of centralized drug procurement organized by the state.
The third is to strengthen drug quality assurance measures. One problem that deserves attention is that the biggest focus of our current reform is price, but the price means is not omnipotent or unique. We must do a good job of "combination boxing" and find ways to make pharmaceutical companies willing to reduce the price of drugs and have the motivation to improve the safety, efficacy and availability of drugs. At the same time, it is necessary to strengthen the quality assurance of drugs, strengthen the main responsibility of selected enterprises to ensure product quality, implement the territorial supervision responsibility of local governments, include selected drugs in key supervision varieties, strengthen the quality supervision of the whole chain of production, circulation and use, improve the mechanism of departmental coordination and supervision information communication, and accelerate the construction of a traceability system for the whole process of drug production, circulation and use. For domestic enterprises, it may be necessary to cooperate with the science and technology department, the finance department and the development and reform department to truly enhance the competitiveness of enterprises, improve our pharmaceutical level, and give enterprises the motivation, confidence and ability to produce inexpensive drugs.
The fourth is to strengthen the punishment of drug supply interruption in the winning bidder. From the "4+7" pilot project of national centralized procurement in 2019 to 2021, the supply of selected pharmaceutical companies has been cut off every year. The behavior of stopping the supply of drugs after winning the bid will have a series of negative effects on ensuring the stable supply of drugs and the normal development of centralized procurement, and the lack of profit after winning the bid is one of the main reasons why enterprises choose to stop supplying drugs. In view of this problem in the process of centralized purchasing, first of all, it is suggested that the credit evaluation of the selected enterprises in centralized purchasing should be strengthened on the basis of the current credit evaluation standards for access, and specific credit evaluation system standards for recruitment should be formulated as the basis for the punishment of untrustworthy enterprises. Enterprises that are seriously unable to supply goods on time and in quantity during the period of the purchase agreement will be listed in the "violation blacklist", and enterprises that are untrustworthy will face penalties such as canceling the qualification of winning the bid and participating in the procurement declaration. If the circumstances are serious, the impact is bad, and the relevant regulations are violated, they will be subject to corresponding administrative penalties. Secondly, the centralized purchasing mechanism still needs to be further improved, and a corresponding guarantee mechanism should be established for drugs with low prices and urgent clinical needs. When the relevant centralized purchasing drugs are renewed, reasonable price adjustment space can be given, which can improve the enthusiasm of production enterprises to some extent and solve the problem of low enthusiasm in the production and distribution process because of low profit space. Finally, the quotation strategy for centralized purchasing of pharmaceutical companies must be carefully formulated, and the capacity estimation and market risk prediction and prevention of the selected products should be done well, the contract spirit should be enhanced, the production scheduling and supply of the selected products should be actively planned, and the phenomenon of supply interruption and short supply should be resolutely put an end to.Fully guarantee the agreed supply and patient demand of the products selected by the enterprise in the selected area.
The fifth is to improve the incentive mechanism for medical institutions. For the medical insurance funds saved by centralized procurement, the medical institutions will be given incentives to retain the balance in accordance with relevant regulations. In the case of centralized procurement with a large number of drugs, a large amount of money and many medical institutions involved, it is necessary to carry out dynamic adjustment and evaluation of medical service prices, and adjust the medical service prices in a timely manner in line with the conditions. Designated medical institutions should improve the internal assessment methods and salary mechanism, promote rational drug use by clinicians and pharmacists, and encourage the priority use of selected products. In addition, in order to protect the development of innovative enterprises, group evaluation and price comparison should be carried out appropriately to alleviate the problem of squeezed profit space of innovative drugs caused by centralized mining.
Reform can’t be "one size fits all". It is necessary to strengthen equal communication between managers and managed people, and at the same time, it is necessary to respect market rules and abide by the basic production cost-benefit analysis method. It is not possible to let enterprises cut prices blindly without considering manufacturing costs. Only by paying attention to the systematic integration, coordination and high efficiency of the reform of centralized drug collection system can we better protect the people from diseases and get medical treatment.
(Author: Deng Yong, a special researcher at the Beijing Supreme Leader New Era Socialism with Chinese characteristics Thought Research Center, a professor at Beijing University of Chinese Medicine, and the head of the decision-making consultation project of Beijing Social Science Fund "Research on the Legal Protection of Beijing Baojin Traditional Chinese Medicine Inheritance and Innovation Development")