China launches an interprovincial medicine procurement regime

China

Following the fifth meeting of the Central Comprehensively Deepening Reforms Commission of the Communist Party of China, the Joint Procurement Office of the People’s Republic of China (“JPO”) recently released the Medicine Centralised Procurement Document (“Document”).

According to the Document, the JPO will conduct centralised procurement of medicines on behalf of all public hospitals in the following 11 cities: Beijing, Tianjin, Shanghai, Chongqing, Shenyang, Dalian, Xiamen, Guangzhou, Shenzhen, Chengdu and Xi’an (“Pilot Cities”). Meanwhile the JPO published the 31 varieties of medicine (including Amlodipine, Clopidogrel and Atorvastatin, amongst others) and the quantity to be purchased for each medicine to be procured. The winning bidder for each variety of medicine will be responsible for supplying the total quantity to be purchased for that medicine. Within 12 months of the procurement result, public hospitals in the Pilot Cities must give priority to the successful bidder when purchasing the relevant medicine.

Only domestic pharmaceutical manufacturers or general agents of imported medicines were eligible to participate in the centralised procurement as potential bidders. Each bidder must have the production capacity to meet the proposed purchase quantity.

The centralised procurement was conducted on 6 December 2018. According to the announcement of the authority issued on 7 December 2018, 25 of the 31 varieties of medicines had successfully reached a procurement agreement via the centralised procurement process.  Among those 25 kinds of medicines, 22 are generic drugs that have passed the quality and efficacy evaluation whilst only three varieties are original drugs. Additionally, the purchase price of these drugs procured during this year’s centralised procurement process had reduced in price by an average of 52%, the largest price reduction being 96%, in comparison to the procurement price of the same variety of drugs in the Pilot Cities last year.

Currently, the centralised procurement of medicines is mainly conducted at a provincial level. However, the release of the Document indicates the potential for a more centralised regime, i.e. an interprovincial medicine procurement regime.

Please click here to read the full text of the Document (in Chinese only).