Guocai "Renewal Season": "Shanghai Plan" is here!

With the continuous advancement of national and local volume procurement, the issue of "renewal of bids" for nationally-sourced varieties that have won the bid has attracted much attention from the industry
.

With the continuous advancement of national and local volume procurement, the issue of "renewal of bids" for nationally-sourced varieties that have won the bid has attracted much attention from the industry
.

Recently, representatives of the National Medical Insurance Bureau and the 11 “4+7” joint procurement offices of the 11 provinces and cities made it clear in the centralized drug procurement work meeting that the contract renewal work after the expiration of the national mass-purchasing products will be carried out by local organizations
.

Today, the "renewal" methods of the provinces are not the same.

On June 8, Shanghai Sunshine Purchasing Network announced the results of the proposed bid-winning bids for 9 "4+7" categories
.

According to the procurement documents, volume procurement in the Shanghai area conducts comprehensive bidding for fully competitive products that have experienced national procurement, further consolidating the achievements of the national drug procurement reform, and substantively promoting the normalization and institutionalization of pharmaceutical volume procurement

The "Shanghai Plan" for the contract renewal of this centralized procurement has reduced the price score and strengthened the quality and comprehensive evaluation scores of the company.
Will this reflect a new signal?

Table 1 List of 9 repurchased categories

01 Formation of a price mechanism guided by centralized drug procurement

01 Formation of a price mechanism guided by centralized drug procurement

On November 15, 2018, the Joint Procurement Office issued the "4+7 City Drug Centralized Procurement Document" (GY-YD2018-1), which will carry out mass procurement of drugs in 11 cities including Beijing, Tianjin, and Shanghai, and the selected drug prices The average drop is 52%, and the largest drop will reach 96%, which will be officially implemented in April 2019
.

The "4+7" centralized procurement with volume has achieved good results in reducing drug prices.
In the second three quarters of 2019, about 80% of the sales of the winning bidder category dropped significantly compared with the second three quarters of 2018, with an average drop of 47.
54%! Among them, flurbiprofen axetil injection dropped the most, with a year-on-year decrease of 72.
23%!

It can be seen that the implementation of the "4+7" centralized procurement policy has greatly reduced the price of medicines in China, reduced the moisture content of medicines, and ensured the availability of medicines for the common people, making room for the establishment of a dynamic adjustment mechanism for medical service prices
.

This marks a new chapter in the history of further deepening the reform of the medical and health system with centralized drug procurement as a breakthrough

Under the premise of quality consistency, the "4+7" centralized and volume procurement adopts the "single bidding mechanism" in line with international conventions and bidding principles
.

On this basis, on the basis of responding to the call of the state, taking into account the diversification of supply and ensuring the flexibility of the supply market, various localities have explored a bidding strategy that allows multiple selections and allows certain price differences.

02 Comprehensive bidding promotes high-quality medicines at low prices

02 Comprehensive bidding promotes high-quality medicines at low prices

1.
Put forward new requirements at the national level

The "Opinions of the General Office of the State Council on Promoting the Normalized and Institutionalized Development of Centralized and Volumetric Procurement of Drugs" (Guobanfa [2021] No.
2) stated that after the expiration of the procurement agreement, it should focus on stabilizing market expectations, stabilizing price levels, and For clinical medication, comprehensive consideration should be given to factors such as reliable quality, stable supply, good credit, and clinical demand
.

This has laid the institutional foundation and theoretical guarantee for the implementation of the comprehensive bidding mechanism

2.
The volume purchase price has bottomed out

The average drop of the first batch of centralized purchases reached 52%, and the price of medicines may have been close to the cost price
.

The nine varieties of the re-collection are in fierce competition in the pilot and nationwide expansion.

3.
Potential risks in the supply of selected drugs

According to the company’s main business income rankings compiled by the Ministry of Industry and Information Technology's 2018 "China Pharmaceutical Statistics Annual Report", among the top three batches of nationally selected companies, the top 100 and those below the 400 occupy the main position and offer lower prices; Those selected at the price of 0.
1 yuan are more small companies ranked after 400
.

These small companies often do not have historical sales records or have very low sales.

Based on this, Shanghai has solicited opinions from clinical and pharmaceutical experts and representatives of pharmaceutical companies, and introduced a comprehensive bidding mechanism in the re-collection process of nationally sourced varieties whose agreement period has expired, from both the pharmaceutical and corporate dimensions.
In terms of building a diversified index system
.

From the perspective of the drug dimension, price level, technical content, clinical applicability, safety, and market share are the main indicators; while the corporate dimension is a comprehensive consideration of its technological innovation capabilities, drug supply capabilities, quality management levels, and social responsibility.
And credibility
.

It can be seen that the comprehensive bidding mechanism aims to make an objective and accurate evaluation of drugs purchased in a centralized manner
.

As a result, the applicant company has gradually transitioned from the initial bidding habit of simply pursuing low prices to a rational strategy that fully considers the price, quality and full life cycle cost of medicines, and pursues the best cost-effectiveness to provide patients with cheap and high-quality drugs
.

Table 2 Comprehensive bidding index system

03 Conclusion

03 Conclusion

The single bidding mechanism and the comprehensive bidding mechanism do not exist in opposition, but are inevitable historical choices in different periods
.

For enterprises, the number of largest winning bidders continues to increase, and the probability of winning bids for bidders continues to increase.
The temptation to win bids will gradually decrease, and the pain caused by bid failure will not be unacceptable
.
With the continuous adjustment and running-in of centralized procurement rules, pharmaceutical companies will bid more rationally, and centralized procurement does not only mean low prices
.

As long as the quality is outstanding, the supply is stable, and the price is right, whether it is the original research product or the domestic product, it will usher in its own "spring"
.
We look forward to the early establishment of a new type of medical insurance policy that saves the government's worry, enterprises' peace of mind, and people's peace of mind to collect, supply, and use medicines.
Let's wait and see!