China to advance reform of centralized drug bulk-buying to ease patients’ financial burden

BEIJING, Jan. 15 (Xinhua) — China will take a step forward in its centralized drug bulk-buying program, and make it a regular and institutionalized practice to lower medical costs for the general public, the State Council executive meeting chaired by Premier Li Keqiang decided on Friday.

The country has undertaken the major reform of bulk-buying and use of drugs in recent years, to make medical treatment more affordable to the public. By the end of last year, three rounds of such bulk-buying were conducted, and drugs under the program saw an average price cut of 54 percent. Over 53 billion yuan have been saved and several hundred million patients benefited each year. The fourth round of procurement will soon start, during which more high-value medical consumables will be covered.

“The bulk-buying program has worked well. It is a major step in reforming medical institutions,” Li said. “The scheme has helped to lower, over time, medical costs for the public, and keep the operation of medical insurance funds sustainable.”

The Friday meeting decided to advance the coordinated reforms of medical services, medical insurance and pharmaceuticals, and put centralized bulk-buying on a regular and institutionalized basis.

Under the principle of ensuring essential and clinical needs, high-demand yet expensive drugs on the drug catalogue of basic medical insurance will be prioritized in the procurement. The program will extend, over time, to other clinically needed and quality drugs and consumables available on the domestic market.

All public medical institutions are expected to participate in the centralized bulk-buying. Special arrangements will be made for the procurement regarding “orphan drugs” of rare diseases.

Eligible copycat drugs, original drugs and reference drugs will participate in the centralized bulk-buying all under their generic names. Drug manufacturers and their drug and consumable products will be selected through fair competition on quality and price. Medical institutions shall use the selected drugs on a priority basis, and expand procurement as much as demand allows.

Successful bidders must ensure that price cuts shall in no way compromise the quality and effects of their products. Tighter control will be exercised over the production, circulation and use of selected drugs.

“Essential drugs and consumables should be the mainstay of the procurement, as our basic medical insurance scheme intends to meet primary medical needs. We must firmly bear this in mind. The program will not obstruct hospitals, Tier-Three hospitals in particular, from prescribing drugs of their own choosing,” Li said.

While lessening the financial burden on patients, corporate profitability will also be duly considered under the bulk-buying program. Pharmaceutical and consumable producers will be encouraged to develop sectoral concentration amid competition, and pursue product innovation and upgrading.

The medical insurance costs saved under the drug procurement will be given to medical institutions as an incentive in accordance with relevant regulations. The goal is to make the drug bulk-buying reform beneficial for both patients and pharmaceutical companies as well as medical institutions. 

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