Financial Services Association, May 21 (Reporter Lu Afeng) Yesterday evening, the National Health Insurance Administration issued a new notice on “improving the quality and scope” of collection. Among them, many provincial alliance procurement will soon be upgraded to national joint procurement, which has attracted strong attention from the industry. In particular, the provinces and cities involved in the Sanming Alliance drug collection for diseases such as cancer and respiratory diseases and the Henan Alternative Drugs Alliance will be further expanded.

A number of industry experts told the Financial Federation reporter that the publication contains a large amount of information. It summarizes and affirms the collection models of past national and provincial alliances, etc., and also makes detailed arrangements for the next stage of collection work, indicating that the trend of full coverage of domestic conventional medicine and consumables collection has been further affirmed. Relevant enterprises, especially proprietary Chinese medicines and Chinese medicine tablet companies, should prepare early and follow the trend.

On the evening of the 20th, the National Health Insurance Administration issued the “Notice on Strengthening Regional Collaboration to Improve the Quality and Expansion of Centralized Pharmaceutical Procurement in 2024" (Health Insurance Administration (2024) No. 8, hereinafter referred to as the “Notice”). According to reports, the notice is to implement the 2024 “Government Work Report” deployment, improve the centralized pharmaceutical procurement system, promote the upgrading and expansion of centralized procurement work, further enhance the capacity and scale of local procurement alliances, achieve vertical linkage and collaborative promotion at the national and local levels, clarify work priorities for 2024, and ensure the completion of the “14th Five-Year Plan” goals within the year.

In terms of specific content, the notice proposed four parts of this year's collection work, including expanding the scope of alliances, strengthening coordination, focusing on key areas, and improving implementation mechanisms.

In terms of new procurement, provincial alliance procurement is about to be upgraded to nationwide joint procurement, which proposes to carry out centralized procurement of new batches of nationally organized drugs; in terms of continuing work, the notice proposes to carry out special unified and continuous procurement of insulin throughout the country, and to take the lead in carrying out continuous procurement by the National Organized Drug Collection Alliance, mainly from Shanghai, Jiangsu, Henan, and Guangdong. The Joint Drug Procurement Office will sort out the previous batches of varieties collected by national organizations (including continuation) that will expire at the end of 2025, and research and coordinate them into one batch to carry out continuous procurement in the form of an alliance.

The notice also clarified the scope of collection: the state-organized drug collection focuses on drugs that have passed consistent evaluations of quality and efficacy, and the state-organized collection of high-value medical consumables focuses on varieties that are inflated, representative, and strongly expressed by the public. Provinces that are in a position to do so are encouraged to take the lead in nationwide joint procurement, focusing on chemical drugs, proprietary Chinese medicines and Chinese medicine tablets that have not undergone consistent evaluation, focusing on “large varieties” of clinically commonly used drugs and consumables with large procurement amounts and covering a wide range of people, as well as pharmaceuticals and consumables that can be replaced or related to clinical use of varieties collected by the state.

“By the end of 2024, each province will have collected at least 1 batch of drugs, bringing the total number of drugs collected at the national and provincial levels (including participating in the alliance procurement) to more than 500.” The notice emphasizes.

At the same time, the notice clearly elevates eligible provincial alliance procurement to national alliance procurement. The leading province should strengthen communication and coordination with the National Health Insurance Administration and invite all provinces to participate to form a nationwide joint procurement. The “Notice” states that “in principle, all provinces should participate in the national joint mining”.

The notice clarifies the national joint procurement work to be guided this year, that is, provincial alliance procurement that is about to be upgraded: Hubei takes the lead in procurement of new batches of the National Alliance of Proprietary Chinese Medicines and continued procurement of the first batch of the National Proprietary Chinese Medicine Collection Agreement; Shandong takes the lead in the procurement of alternative medicines from nationally organized groups; and the Sanming Alliance carries out drug collection for diseases such as cancer and respiratory diseases.

In terms of provincial consortium procurement of high-value medical consumables, Jiangxi is leading the procurement of biochemical in vitro diagnostic reagents, Anhui is leading the procurement of in vitro diagnostic reagents such as tumor markers, Guangdong is leading the procurement of ultrasound needles, Zhejiang is leading the procurement of breast circumcision needle alliances, Fujian is leading the procurement of ligation clips for vascular tissue closure, Henan is leading the procurement of coronary artery amputation balloons, etc., and Hebei will also lead the procurement of consumables such as vascular intervention.

“In the past, national harvesting and provincial alliance collection were in parallel. At this stage, the Health Insurance Administration has decided to gradually upgrade allied procurement under the guidance of the spirit of 'exhaustive harvest' and 'improving quality and expansion'.” Shen Yong, chairman of Beijing Shengshi Kanglai Traditional Chinese Medicine Marketing Planning Co., Ltd., analyzed to the Financial Federation reporter that the notice clearly will provide technical and expert support for the provincial alliance to upgrade the national joint procurement. The support is very strong, and the notice mentions words such as “local protection,” “water release,” and “release,” which is equivalent to reminding some provinces and enterprises that they must participate in nationwide joint mining with unified data and standards. The wording is quite strict, showing that nationwide joint procurement is imperative.

Yang Tao, an executive of a listed pharmaceutical company and a senior pharmaceutical industry expert, also told the Financial Federation reporter, “With the issuance of the notice, the current trend of full coverage of domestic conventional drug use and consumables collection has been determined, and there are no dead spots or omissions.”

An industry insider told the Financial Federation reporter that the notice contains a huge amount of information. It can be said that it should be all covered. Special attention should be paid to the procurement by the Henan Alternative Drug Alliance and the Sanming Alliance's collection of drugs for diseases such as cancer and respiratory diseases.

“In the past, the Sanming Alliance included pharmaceuticals, high-value consumables, IVD reagents, and even hospital equipment in the collection of alliances. The full range of categories, large spans, drastic price cuts, and strict enforcement are rare in China. The industry needs to focus on studying past details and rules. Also, alternative drug collection in Henan is a large variety of 'price crusher'.” The industry insider mentioned above pointed out to reporters.

“The issuance of the notice will actually have an obvious impact on the collection of proprietary Chinese medicines and Chinese medicine tablets. Because the scale of collection of traditional Chinese medicines is not large compared to the varieties involved, the relevant companies must make plans to reduce prices and exchange amounts. Furthermore, prices of raw materials for proprietary Chinese medicines and Chinese medicine tablets fluctuate greatly due to climate and natural disasters, and supply sustainability after inclusion in collection is also a major challenge. All in all, improving the quality and expansion of collection is a good policy that is generally trending. Relevant enterprises must thoroughly consider the details of the relevant policies, make targeted pre-arrangements based on their product characteristics and raw material procurement and supply situation, and follow the trend.” Shen Yong said.