Health system reduces unreasonable drug prices through centralized drug procurement system

A bottle of asparagus tablets with an ex-factory price of only ten yuan was sold for more than 200 yuan. In May of this year, the incident of high-priced asparagus in the Xiangya Second Hospital of Hunan Province attracted the attention of the central leadership and the Ministry of Health. It also triggered a heated debate on pricing of medicines in various sectors of society. Some people can not help but wonder if the use of centralized drug procurement methods to control the high drug prices in the end have no effect? Some people even further questioned the direction of such reforms?

In July, the “Code for the Centralized Purchasing of Drugs for Medical Institutions” (hereinafter referred to as “the Code”) issued by seven ministries and commissions including the Ministry of Health, the State Council Corrective Office, the National Development and Reform Commission, the Ministry of Supervision, the Ministry of Finance, the State Administration for Industry and Commerce, and the State Food and Drug Administration. The Measures for the Supervision and Administration of Centralized Procurement of Pharmaceuticals (hereinafter referred to as the "Measures") were implemented. What kind of role can these rules and regulations play in managing drug prices? A few days ago, the reporter took these problems and visited the competent department of health. He asked relevant people to respond to public questions and interpret the system of centralized drug procurement.

Response 1: The basic system of centralized drug procurement must adhere to

After the occurrence of the high-priced asparagus film incident, the Ministry of Health immediately conducted a large number of investigations and studies and successively conducted field investigations in Jiangxi, Ningxia, Beijing and other provinces (autonomous regions and municipalities) and the China National Pharmaceutical Corporation, and convened drug manufacturers and operating companies. The leaders of public medical institutions, private medical institutions, and social pharmacies held discussions to discuss how to more effectively manage drug prices.

Judging from the actual situation in recent years, the people's complaints about the high cost of visiting patients are mainly reflected in the relatively high price of medicines. Under such circumstances, only by grasping the key to drugs can we gradually solve a series of problems that plague the field of medicine. After careful analysis and in-depth thinking, they believe that the promotion of centralized drug procurement on the Internet, which is government-led and provincial (autonomous regions and municipalities) as the unit, is an effective way to control drug prices in line with China's national conditions.

Li Xi, head of the Discipline Inspection Group of the Central Commission for Discipline Inspection at the Ministry of Health, explained to the reporter: The reason why this approach is implemented is because it conforms to the basic principles of economics, meets the requirements of relevant international organizations, meets the current social development trends, and complies with China's pharmaceutical production. The actual conditions of the circulation system and price formation mechanism are conducive to the control of drug prices, as well as ensuring the quality of medicines, helping to control commercial bribery in the field of pharmaceutical purchases and sales from the source, facilitating the optimization and integration of the pharmaceutical industry, and achieving comprehensive policies. effect.

From the perspective of economics, centralized drug procurement can exert the scale advantage of group procurement, get the best price/performance ratio, and guarantee the quality while minimizing the purchase price. Therefore, the WTO and WHO clearly stipulate in relevant work rules that procurement of goods that meet a certain amount should be subject to tender procurement. The facts also prove that it is very effective for all countries and regions to adopt centralized drug procurement methods to solve the rapid rise in medical expenses.

The data shows that there are more than 4,700 drug manufacturing enterprises that have passed GMP certification in China, there are more than 13,000 drug business enterprises that have passed GSP certification, and retail drug stores have reached 360,000. In addition, China currently uses the common name to calculate 12,000 kinds of drugs in total, of which only 2,700 (23%) are under the government guideline price in the Medicare Catalog, and the remaining 9300 drugs (about 77%) are completely corporate. Autonomic pricing. There are a large number of pharmaceutical production and distribution companies, but the gap between enterprises is obvious. The government has a small number of varieties for price guidance, and most of them still rely on market regulation. This is the reality of the pharmaceutical production and distribution system and price formation mechanism in China.

Pharmaceutical production and business enterprises, as economic entities, will pursue profit maximization. They hope that the higher the price of medicines, the better; medical institutions are currently implementing a 15% drug addition policy and they have no incentive to reduce prices. Therefore, the self-interests of enterprises and medical institutions are in contradiction with the interests of society and patients. Only the government can represent the interests of the broad masses and patients, and through government-led centralized procurement of drugs, it can effectively reduce intermediate links, reduce transaction costs, realize economies of scale, and change the conditions in which bidders and bidders are reluctant to reduce prices, and ultimately provide quality for the masses. Excellent and inexpensive medicines. At the same time, the centralized procurement of drugs adheres to the guideline of “quality first”. Through the review of the qualifications of bids for pharmaceutical companies and products, strict access control is implemented, illegal enterprises and drugs are minimized, and unlicensed companies and counterfeit medicines are lost. The speculative space ensures the safety of people's medication.

The implementation of centralized drug procurement can make the whole process of procurement transparent and "sunny", establish an open, fair and impartial operation mechanism, and eliminate the soil and conditions that cause unhealthy wind due to obscure operations from the institutional and institutional levels. At the same time, centralized procurement has reduced the price of drugs to high prices, squeezed profit margins of operating companies, and objectively reduced the economic ability and conditions of unscrupulous enterprises to pay bribes. In this sense, centralized drug procurement is an effective measure to control commercial bribery in the field of pharmaceutical purchases and sales from the source, and has the important role of treating both the symptoms and the causes.

In addition, centralized drug procurement can play a good guiding role for drug production and management companies, and to a certain extent, it can help regulate the order of drug production and circulation.

“The implementation of centralized procurement of drugs on the government-led and provincial (region, city)-based units is obvious and the importance is self-evident. The basic direction of centralized drug procurement is completely correct. This basic system must be adhered to. We will attach great importance to the questions posed by some people, but we will never shake our confidence and determination in advancing this work," said Li Xi.

Response 2: Correct analysis of the current situation and tasks of centralized drug procurement

In the late 1990s, the purchase price of medicines in public medical institutions remained high. In 1999, the State Council deployed trial medical procurement of medical institutions. From 2000 to 2001, the Ministry of Health took the lead, together with the State Council Steering Office, the former State Planning Commission and other relevant departments issued a series of trial rules.

However, new situations have emerged in practice. Pharmaceutical manufacturers, pharmaceutical companies, intermediaries, and medical institutions all lack enthusiasm for controlling and reducing drug prices; intermediaries have their own economic interests, and it is difficult to check the company’s quotations; the intermediate links are too numerous and spread at different levels. There are even some operating companies that control key issues such as drug declarations and quotation.

On the basis of summing up experiences and lessons learned, Sichuan and other provinces explored the implementation of a centralized government-led approach to the procurement of drugs on the Internet, and transferred the dominance of procurement from the original agency to the hands of the government. For the bidding and purchasing of the unit, it is converted to the provincial purchasing unit. Due to the implementation of government-led and provincial units, the intermediate links have been reduced, transaction costs have been reduced, and the concentrated procurement of drugs has achieved significant results. In 2005, the Ministry of Health and the State Council Corrective Office jointly held an on-site meeting in Sichuan. Since 2006, the General Office of the State Council has issued a series of documents demanding the implementation of this system throughout the country.

In early 2009, six ministries and commissions including the Ministry of Health, the State Council Corrective Office, and the National Development and Reform Commission convened a national conference on the centralization of pharmaceutical procurement, and successively issued the “Opinions on Further Regulating the Drug Centralized Purchasing Work of Medical Institutions” and “further stipulating the centralized procurement of pharmaceuticals by medical institutions. Opinions on “Explanation of relevant issues” comprehensively promoted the centralized procurement of drugs on the government-led and provincial (region, city)-based institutions nationwide. Through one-year hard work, this work has made breakthrough progress. Thirty provinces, autonomous regions, municipalities, and municipalities (not mentioned in Tibet) have established leading agencies and working agencies for centralized procurement of pharmaceuticals, and established non-profits led by the government. The centralized drug procurement platform has implemented centralized drug procurement on the government-led and provincial (region, city) basis.

Over the past year, centralized procurement of drugs has achieved remarkable results in ensuring the quality of drugs and reducing the prices of drugs. Statistics show that the average price reduction of successful bids in provinces (regions, cities) that have completed procurement in 2009 reached 21%, and some provinces and municipalities saw a larger decline. In 2009, the retail price of the winning bid medicines in Jiangxi Province was 35.33% lower than the national guideline price, an average decrease of 9.5% from the bid price in 2008, and the profit-bearing people in the year was 2.614 billion yuan. In 2009, the winning bid price in Jiangsu Province was 44.37% lower than the national guideline price. In some localities, the average price of actual purchases decreased by 13.84%. In the recent centralized procurement of pharmaceuticals in Beijing, the prices of successful drugs have been reduced by an average of 36% from the national guidance prices, and have fallen by an average of 16% from the bid prices for centralized procurement in 2006. It is expected that the prices will be for the people throughout the year. Save 3 billion yuan. The centralized procurement of drugs has greatly reduced the burden on the medical expenses of the society, especially the majority of patients, and safeguarded the interests of the people.

Of course, since the centralized procurement of drugs is a new system exploration, it is not yet a long time to run in the country. How to reduce the high price of drugs, how to ensure the quality of drugs, how to ensure the distribution and timely payment, etc. There are different problems. Among them, the issue of quality and price is the most prominent issue, that is, how to effectively reduce the inflated prices of drugs under the premise of ensuring the quality of drugs. Regarding these issues, relevant responsible persons of the Ministry of Health stated that they will work with relevant departments to further strengthen their research and take more effective measures to effectively solve the problems.

“2009 was a landmark year for the centralized procurement of pharmaceuticals. This year we mainly established the system and implemented it in an all-round way. Through the concerted efforts of all parties, we have made breakthroughs in the centralized procurement of pharmaceuticals and received a phased The main task of centralized drug procurement this year and in the next few years is to standardize operations, strengthen supervision, and focus on solving outstanding problems.” Li Xi analyzed the current situation and tasks of centralized drug procurement.

Response 3: Drug procurement has entered a critical period

At present, the centralized procurement of drugs has entered a critical period, and the tasks facing it are arduous and heavy.

To solve the problems in the price of drugs that people are concerned about, it is necessary to analyze the causes and take practical measures. In the next step, the Ministry of Health will extensively collect price information from various sources and establish a relatively complete drug price information database. This information database will be open to all provinces (autonomous regions and municipalities) for centralized drug procurement agencies and be used to determine the bid price. Reference. At the same time, through the combination of price-limit and auction prices at the time of bidding, the implementation of protective prices for a few low-priced classic old drugs, active exploration of “provisioned procurement” and “quantity-price linkage”, etc., the price of drugs is controlled, and the price is unreasonable. Profit margins.

If there are acts of commercial bribery by sales personnel of drug manufacturing and operating companies, they will be announced in accordance with the “Regulations on Establishing a Record of Bad Commercial Conduct in the Field of Pharmaceutical Purchase and Sale” of the Ministry of Health, and the qualification for enterprises to participate in centralized drug procurement shall be cancelled within two years.

In order to standardize the centralized procurement of drugs and strengthen supervision, the “Specifications” and “Measures” make clear provisions. The "Regulations" require that provincial (district, city) people's governments shall be responsible for the establishment of leadership and management agencies for centralized procurement of pharmaceuticals composed of relevant departments, and the establishment of working agencies and non-profit drug centralized procurement and trading platforms. Medical institutions and pharmaceutical production and marketing companies must purchase and sell drugs through non-profit drug centralized procurement platforms established by the governments of all provinces (autonomous regions and municipalities) to implement unified organization, unified platforms, and unified supervision. At the same time, the "Code" put forward further requirements for the behavior of medical institutions and drug production and operation enterprises, and made necessary adjustments to the standards and procedures for centralized procurement.

"Implementing centralized government-led procurement of pharmaceutical products by province (region, city) as a unit involves the adjustment of the interest pattern. It is a redistribution of benefits. All aspects of interest are bound to safeguard their interests through various means. The person in charge of the Inspection Department of the Discipline Inspection Group of the Ministry of Health stated that "In the centralized procurement work, we must pay special attention to preventing the risk of corruption and prevent corruption from decentralized corruption to concentrated corruption." The "Procedures" require the supervision and administration of centralized drug procurement. Responsible for classification, with provinces (autonomous regions, municipalities) as the mainstay, various levels of health administrative departments, supervisory organs and correction offices, price management departments, financial departments, industrial and commercial administrative departments, food and drug supervision and management departments and other relevant departments in accordance with the statutory duties Responsibility, close cooperation, and comprehensive regulation and control of the operation of power in centralized procurement. The regulatory object in the Measures covers all parties involved in drug procurement work. The regulatory content covers all aspects of drug procurement work. The supervision method implements real-time network monitoring, and the supervision links cover the entire process of drug procurement.

“Each locality should adopt measures such as formulating a code of conduct for staff members, detailing work processes and business procedures, establishing a decentralized checks and balances mechanism, and implementing regular staff rotation exchanges to strengthen the internal supervision of centralized procurement agencies. At the same time, special supervision and society should be strengthened. The supervision will ensure that the centralized procurement of drugs will be conducted in an open, fair and impartial manner," the person in charge of the Discipline Inspection Department of the Ministry of Health told reporters.

Before the end of this year, the Ministry of Health and the State Council's Correction Office will organize an inspection team with relevant departments to go to various provinces (autonomous regions and municipalities) for supervision and inspection. We have reason to believe that there is a bright future for centralized drug procurement.

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