In a press briefing held on September 10, titled “Promoting High-Quality Development,” Yan Qinghui, the Deputy Director of the National Healthcare Security Administration, discussed the government’s ongoing dedication to advancing pharmaceutical procurement initiatives. He revealed plans to broaden the scope and enhance the quality of drug procurement efforts, with high-value medical items, including cochlear implants, set to be included in forthcoming national procurement rounds.
Yan pointed out three significant impacts stemming from this initiative:
First, there’s been a noteworthy reduction in the financial burden on patients, alongside improved access to and quality of medications. He cited that prior to the procurement initiative, annual costs for antiviral medications like Entecavir and Tenofovir for hepatitis B patients could soar between $600 and $750. Post-implementation, these costs drastically fell to just $15 to $30 annually. Clinical studies across healthcare facilities have shown a significant uptick in treatment rates and patient compliance for hepatitis B. Additionally, the procurement efforts resulted in considerable price reductions for insulin, with the market share of more effective third-generation insulin increasing dramatically from 58% to over 70%.
Secondly, this initiative is nurturing a more sustainable and healthier pharmaceutical industry. The procurement strategy is transforming the industry’s ecosystem and mindset by shifting the focus from marketing-driven competition to one centered on quality and research. Previously, companies prioritized sales channels, often sidelining the importance of quality and innovation. The new procurement approach fosters fair competition, enabling high-quality products to quickly secure market access. The significant reductions in costs are largely attributed to lower distribution expenses, which have minimally impacted manufacturers’ profits while allowing for reinvestment into innovation. As a result, more companies are now channeling efforts towards enhancing product quality and scaling production.
Lastly, the initiative aids public hospitals in refocusing on their core mission of serving the public good. By addressing gray market practices within drug and consumables supply chains, the procurement process has standardized prescription behaviors among healthcare providers. For instance, the misuse of antibiotics has decreased, with the intensity of use dropping from 37.8 in 2018 to 33.8 in 2022. The accompanying policies from the procurement reform aim to bolster transparent revenue streams for healthcare institutions and providers. Savings gleaned from procurement will be reinvested in these institutions, potentially supporting salary reforms for medical staff after thorough assessments. Moreover, pilot programs for pharmacy service fees are in place to acknowledge the professional contributions of physicians and pharmacists, further promoting higher quality developments in healthcare.
Looking ahead, Yan confirmed that the healthcare security administration plans to intensify efforts in expanding and refining pharmaceutical procurement. This involves extending procurement coverage and organizing new rounds for high-value medical consumables such as cochlear implants. There will be a particular emphasis on regional collaboration, especially in promoting local procurement of traditional Chinese medicines and diagnostic reagents. The administration aims for a seamless transition in ongoing procurement efforts, with careful management and oversight to ensure timely adoption by hospitals and prioritization of selected products. Measures will also be implemented to hold participating companies accountable for their quality and supply obligations.
