China Lays Out Path Forward for Volume-Based Procurement, Tendering

Date: March 10, 2021 | Country: CHINA | Region: ASIA & SOUTH PACIFIC | Type: Policy | Keywords: #bidding #centralizedprocurement #contracts #drugpriceandtenderpurchasedepartment 
#drugsupply #hospital #insulin #nhsa #pricingandreimbursement #regulation #specializedtender 
#tender #volumebasedprocurement

PRICENTRIC BRIEF:

  • The National Healthcare Security Administration’s (NHSA) Drug Price and Tender Purchase Department recently convened in Nanjing, China, bringing together representatives from provincial joint drug procurement offices to discuss introducing specialized drug procurement, renewing contracts for volume-based procurement (VBP) prevailing products upon expiration, and improving tender selection rules for the national, centralized VBP scheme
  • According to Chinese media, the central government will roll out specialized VBP starting with insulin and it was determined that local governments will have the authority to decide on contract renewals for VBP-prevailing drug products
  • China will now consider 131 drug products for the next round of national, centralized VBP, echoing previous government announcements that the scheme would be expanded nationwide to cover the top 250 drugs by national purchase value in 2021 and then 80% of leading drugs by national purchase value in 2022

 

THE DETAILS

NANJING, China – The National Healthcare Security Administration’s (NHSA) Drug Price and Tender Purchase Department recently convened in Nanjing, China, bringing together representatives from provincial joint drug procurement offices to discuss the future of procurement in China.

Conference attendees explored introducing specialized drug procurement, renewing contracts for volume-based procurement (VBP) prevailing products upon expiration, and improving tender selection rules for the national, centralized VBP scheme.

According to Chinese media, the central government will roll out specialized VBP starting with insulin, however, biologic formulations and formulated traditional Chinese medicines (TCMs) will be omitted for the time being, pending further research. In addition, it was determined that local governments will have the authority to decide on contract renewals for VBP-prevailing drug products.

Regarding national, centralized VBP, China will now consider 131 drug products, although which products will be included was not disclosed. The announcement echoes previous comments from the government about the expansion of this purchasing scheme.

China’s national, centralized procurement has expanded significantly since its pilot known as the “4+7 tender trial” launched in 11 select cities in 2018. On average, China has secured medicines through VBP at price cuts of 53%-54%. At the start of February, China’s fourth round of VBP commenced, seeking 45 drugs across a variety of therapeutic areas including hypertension, diabetes, gastrointestinal diseases, mental illnesses, and malignant tumors.

In January, Premier Li Keqiang announce that China will be institutionalizing its national centralized drug bulk-buying program to continue to help lower medical costs. “The bulk-buying program has worked well,” said Li. “It is a major step in reforming medical institutions. The scheme has helped to lower, over time, medical costs for the public, and keep the operation of medical insurance funds sustainable.”

National centralized procurement will continue in China through 2022, according to purchasing officials from China’s provinces who laid out the trajectory for centralized procurement over the next couple of years. Going forward, the national volume-based procurement (VBP) will expand nationwide to cover the top 250 drugs by national purchase value in 2021 and then 80% of leading drugs by national purchase value – a list that includes over 500 products – in 2022. The market size of these 500 drugs is estimated to be CNY 1.1 trillion.

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