China’s bulk procurement program unifies demand of medical institutions

When Li Hui recently visited the hospital for a reexamination and refill prescription, she found that the cost of her regular cancer medicine had been slashed to just 5 percent of its previous price.

Lenvatinib, a first-line targeted drug for the treatment of intermediate and advanced liver cancer, was priced at 16,800 yuan (about 2,366 U.S. dollars) a packet when it was first approved for sale in China in 2018, said Li’s doctor, Zeng Zhiming.

Thanks to the Chinese government’s unified bulk buying scheme, its price is now down to 789 yuan per packet, which means more patients can afford it, said Zeng, a doctor at the First Affiliated Hospital of Guangxi Medical University.

As an important part of China’s medical reform to solve the problem of expensive medical care, the bulk procurement program unifies the demand of medical institutions and orders medicines and high-value medical supplies as a single entity to increase purchase amounts and bargaining power.

Since it was launched in 2018, the program has substantially altered the artificially high prices of drugs and medical supplies, easing the burden of medical costs on patients.

Xie Yuluan, who lives in Zibo City in east China’s Shandong Province, needs to take medicine on a regular basis for high blood pressure.

The medicine she takes was included in the eighth round of bulk buying in March. “I’m very happy that the price has fallen from 27 yuan to 7.10 yuan, and I can just get it from the local clinic,” Xie said.

China’s National Healthcare Security Administration (NHSA) has organized nine rounds of bulk buying for drugs, on average more than halving the prices of 374 different medicines.

The scheme has also reduced the prices of eight high-value medical consumables, including coronary stents and artificial joints, by an average of more than 80 percent.

The latest bulk drug procurement concluded in Shanghai in November, with 41 medicines selected and an average price cut of 58 percent. Among the procurements were medications for common and chronic illnesses such as infections, tumors and cardiovascular and cerebrovascular diseases, as well as those for emergency use.

The scheme has been improved over several years of development, and it now has a greater coverage of medicine types and more sophisticated procurement rules, both of which are good for patients and producers.

The program began with medicines in major-illness categories and has gradually covered various key drugs for supportive clinical treatment, offering more medication options, said Gao Xiaoyan, vice president of the Shanghai Seventh People’s Hospital.

An important change in the latest bulk procurement was the extension of the contract purchase period to four years, the longest purchase period since the scheme began.

This will help hospitals stabilize worries over switching drug suppliers in the short term, said Lu Yun, a professor at China Pharmaceutical University’s School of International Pharmaceutical Business.

Longer contracts also enable pharmaceutical companies to make long-term development plans and arrange their production cycles in an improved manner, lowering costs further.

The latest unified procurement included medication for the treatment of the herpes zoster virus, as such cases are rising these days. It shows the scheme responds quickly to the new needs of clinic patients, said Yao Yu, a research fellow at the Chinese Academy of Social Sciences’ Centre for International Social Security Studies.

The program this year adopted a model of one main supplier and two backup suppliers to guarantee sufficient production volumes should demand grow suddenly.

“To address the unreasonably high prices of drugs and high-value medical consumables, it is necessary to continue improving the management of unified procurement to ensure patients can truly benefit from the price reductions,” according to NHSA official Wang Guodong.

In an official work plan to deepen the reform of medical and healthcare systems in the second half of 2023, China pledged to make the bulk procurement of medicines and medical consumables a regular, institutional practice.

Next, the NHSA will continue to expand the scheme’s coverage and strengthen the quality control and supply security of the products selected. It will also promote the use of these products in medical institutions so that more people can benefit from the reform. Xinhua