According to Zhitong Finance APP, on December 26, 2024, the National Medical Insurance Administration will hold a symposium on centralized procurement of medicines, inviting representatives from the National Medical Products Administration, selected pharmaceutical companies, clinical and pharmaceutical experts, media, and representatives from Capital Markets research institutions to communicate and discuss issues of social concern regarding the quality assurance of centralized procured drugs and the innovative development of the industry, and to gather opinions and suggestions. Shizihai, a member of the Party Leadership Group and Deputy Director of the National Medical Insurance Administration, attended the meeting. At the symposium, leaders from enterprises such as Qilu Pharmaceutical, CSPC PHARMA, Sichuan Kelun Pharmaceutical, Zhejiang Jingxin Pharmaceutical, Better Pharmaceutical, Gan & Lee Pharmaceuticals, and Blue Sail Medical introduced their participation in drug consumables centralized procurement and directly addressed public concerns, particularly responding to the measures they have taken to strengthen cost control and ensure the quality and supply of selected products.

Pharmaceutical companies: The scale effect of centralized procurement and market expansion effect drive companies to reduce costs.

A representative from Qilu Pharmaceutical stated that the company's manufacturing equipment level is now in sync with international standards, with over 190 drugs passing the consistency evaluation, and 100 products chosen for centralized procurement, supplying over 7 billion tablets (Brackets) of selected drugs annually, effectively stabilizing production capacity expectations through centralized procurement, leveraging scale effects, and some selected products have also been exported to Europe and the USA.

The first-priority selected enterprise for enteric-coated aspirin tablets is the listed company Zhejiang Jingxin Pharmaceutical. The company representative stated that the production process of enteric-coated aspirin tablets is very mature, with effective cost control achieved through front-end design, process control, and automated large-scale production. Given the enormous national demand of several billion tablets annually, the selected price can fully cover production and distribution costs, achieving thin profits with high sales volume. CSPC PHARMA had 15 products selected in the tenth batch of national organized drug procurement, with 8 of them being selected at the lowest price, with major advantages being self-supplied Active Pharmaceutical Ingredient and Intelligent Manufacturing level, as enteric-coated aspirin tablets can reach a batch production of 8 million tablets, ensuring stable product quality while increasing efficiency.

Attending companies generally reported that the raw material costs and production processes for drugs are relatively transparent within the industry, making it impossible to quote below cost price for selected procurement. According to a domestic chemical service platform, the market price for raw Active Pharmaceutical Ingredient of aspirin is about 30 yuan per kilogram, which converts to a raw material cost of 0.03 yuan for a 100 mg/tablet, with even lower prices for bulk purchases; therefore, companies can effectively control costs.

A representative from Sichuan Kelun Pharmaceutical stated that the company has already had 59 drugs selected for national organized procurement, leading to stable sales expectations. For example, in the eighth batch of procurement, the selected price for metronidazole sodium chloride injection was approximately 3.6 yuan/bottle, with a contract quantity of about 9 million bottles, and actual annual sales exceeding 20 million bottles after selection. The company's annual production and sales of large-volume injectables are around 5 billion bottles (bags), and centralized procurement can leverage the competitiveness of large-scale and intensive production, fully utilizing production capacity, improving production efficiency, and significantly reducing marginal production costs; at the same time, it can also enhance the company’s bargaining power with upstream suppliers to save costs.

After the centralized procurement, the coverage of enterprise products entering Medical Institutions has significantly expanded, greatly saving the time and cost of product hospital access. Gan & Lee Pharmaceuticals stated that through two rounds of insulin centralized procurement, nearly 12,000 new insulin products have entered hospitals, currently covering about 39,000 Medical Institutions. As a company mainly producing insulin, profits have increased year by year in 2023 and 2024 after the centralized procurement. After the centralized procurement of cardiac Brackets, the number of Medical Institutions covered by Blue Sail Medical's cardiac Brackets has increased from over 1,400 to more than 2,100, significantly raising market share.

Pharmaceutical enterprises state that quality is the lifeblood of a company, and the quality of selected products in centralized procurement is guaranteed.

Attending enterprises believe that quality is the lifeblood of a company, and regardless of price or profit, quality safety must be ensured. The person in charge of Sichuan Kelun Pharmaceutical, whose multiple injection products were selected in the tenth round of centralized procurement, stated that quality derives from design and advanced technology. The company widely adopts technology such as informationization, automation, and continuous monitoring, and continuously optimizes processes and upgrading equipment to achieve dual benefits in quality and cost.

Selected products in centralized procurement are strictly monitored by regulatory authorities. Qilu Pharmaceutical reported that its five production bases will accept more than 200 inspections from the drug regulatory authorities in China, the USA, and the EU in 2024, all passing smoothly. The company's Acetate Abiraterone tablets have conducted multiple clinical trials both domestically and internationally, proving that the generic drugs are equivalent to the original research drugs. Since 2019, subsidiaries of Kelun Group have cumulatively undergone over 600 drug supervision inspections, with products subject to over 7,000 random inspections by national, provincial, and municipal drug regulatory departments, all qualifying in quality. Many enterprises stated that products meet international standards, with multiple selected pharmaceuticals simultaneously exported to overseas markets, and production bases passing strict inspections and certifications from the European Medicines Agency and the US FDA.

Experts attending the conference expressed that after more than two years of follow-up, the quality and efficacy of selected artificial joints in centralized procurement have been mutually recognized by both medical staff and patients. At the same time, the price reduction from centralized procurement has facilitated the wide use of better ceramic-polyethylene material selected products, with decreased costs for artificial joints promoting the deployment of joint replacement technology, which has significantly increased the surgical volume in local hospitals, positively contributing to the healthy development of the disciplines.

Drug regulatory authorities and experts state that the consistency evaluation of the quality and efficacy of generic drugs is trustworthy.

The relevant person in charge of the Drug Regulatory Department of the National Medical Products Administration stated that the department promotes the consistency evaluation of the quality and efficacy of generic drugs according to the same standards as original research drugs. In specific work, a complete set of technical evaluation systems in line with international standards has been established, which not only adheres to strict standards during the review and approval process but also maintains comprehensive regulatory coverage after drug market approval, requiring enterprises to produce strictly according to the processes used at the time of applying for consistency evaluation, with significant changes needing re-approval. The drug regulatory department implements 100% coverage of inspections for production enterprises and random inspections for selected varieties, ensuring that "price reductions do not result in quality reductions."

Attending pharmaceutical experts stated that countries around the world regard generic drugs as mainstream products for supplying patients, with prescriptions for generic drugs in the USA accounting for 90%. The consistency evaluation technical requirements implemented in China compare generic drugs to original research drugs for pharmaceutical evaluation, bioavailability evaluation, etc., which is recognized as one of the best standards internationally. China is a major country in Active Pharmaceutical Ingredients, with internationally leading quality control levels, such as impurity control levels for Azithromycin and Vancomycin ranking near the top globally.

Experts at the conference introduced the latest real-world study on the clinical efficacy and safety of pharmaceutical procurement. The third-phase real-world study focused on the selected pharmaceutical products from the fourth and fifth batches of the national organized procurement, involving 26 representative and widely used pharmaceuticals across six major therapeutic areas. The study results indicated no statistical difference in clinical effects and adverse reactions between selected generic drugs and original research drugs during procurement. As of now, 63 pharmaceuticals have undergone real-world clinical studies, with nearly a hundred tertiary Grade A hospitals nationwide participating, and the patient sample size exceeding 0.3 million. The results consistently show that the generic drugs are equivalent to the original research drugs.

Pharmaceutical companies and experts: Centralized procurement promotes innovation and development in the industry.

Industry players generally believe that after 6 years of 10 rounds of national organized pharmaceutical procurement, the procurement policy is conducive to guiding companies to strengthen cost control and innovate for transformation, which is significant for enhancing industry concentration and promoting high-quality development. CSPC PHARMA adheres to a strategy that combines innovation and production; on one hand, it actively participates in procurement, winning bids for 48 pharmaceutical products while maintaining large-scale production to dilute costs; on the other hand, it continuously increases innovation to gain high added value, with research and development investment maintaining double-digit growth in recent years, amounting to about 5 billion yuan in 2023. In recent years, 10 pharmaceuticals have passed negotiations for inclusion in the national medical insurance catalog, with over 130 projects for new drugs in the research pipeline, laying a solid foundation for sustainable health development in the future. The person in charge of Beite Pharmaceuticals stated that over the past 6 years of national procurement, 52 varieties have been selected, enabling the company to achieve rapid development, improving its ranking from 88th to 46th on the list of top 100 pharmaceutical companies.

Experts at the conference believe that over the past 6 years, the national implementation of centralized procurement of pharmaceutical consumables has created space for the entry of new drugs and technologies, as well as adjustments to medical service prices. The new drug agreement period in the national medical insurance catalog negotiations has seen sales nearing 500 billion yuan, with medical insurance fund expenditures exceeding 340 billion yuan. Such large-scale financial expenditures have mainly been achieved through the optimization of spending structures.

Experts in the field of Traditional Chinese Medicine at the conference introduced the procurement situation of Traditional Chinese medicine decoction pieces, stating that the procurement of Traditional Chinese medicine decoction pieces overcomes challenges in unified quality standards and significant price fluctuations. Based on price competition, a relatively scientific evaluation system was formed at the procurement end by comprehensively introducing indicators such as the recognition of medical institutions, Traditional Chinese medicinal material planting bases, traceability system construction, and authentic medicinal materials. The demand from nearly 0.032 million medical institutions reached over 97 million kilograms, effectively stabilizing expectations, supply, and prices. Driven by the strategic procurement initiatives, it will promote the standardization of geographical production areas for Traditional Chinese medicinal materials and facilitate the implementation of relevant production quality management policies for quality traceability and standardized large-scale production in the whole industry chain, which is of great significance for the standardized development of Traditional Chinese medicine decoction piece enterprises.

Officials from the National Medical Insurance Administration's Office and Pricing Procurement Division participated in the discussion.

This article is compiled from the "National Medical Insurance Administration" public account, edited by Jiang Yuanhua from Zhitong Finance.