Average price reduction of 56%! The eighth batch of national drug procurement has been gradually implemented, with 39 selected drug patients | proportion | drugs

Starting from July 1st, the results of the eighth batch of national organized drug procurement and selection have been implemented in many places such as Henan, Jiangxi, and Hebei, with 39 selected drugs and an average price reduction of 56%, further reducing the burden of medication on patients.

Recently, the daughter of Li Qiang, a resident of Zhengzhou, Henan, developed a high fever. Her family took her to the pediatric outpatient department of the First Affiliated Hospital of Henan University of Traditional Chinese Medicine for treatment. After being diagnosed with influenza A, the doctor prescribed oseltamivir phosphate suspension for her.

Beibei's mother Li Qiang: I bought this medicine before, and it costs about 90 yuan per box. Now, 15 yuan per box is much cheaper.

The oseltamivir phosphate suspension is one of the selected drugs in the eighth batch of centralized procurement, selected by 7 production enterprises, with an average price reduction of 83%, significantly improving the accessibility of this antiviral drug. Moreover, when doctors prescribe drugs in the hospital system, they can simultaneously see the oseltamivir produced by multiple companies. Among them, high-quality and cost-effective drugs selected from centralized procurement will be prioritized.

Guo Qingyin, Chief Physician of the Pediatric Department of the First Affiliated Hospital of Henan University of Traditional Chinese Medicine: When I enter the keyword oseltamivir, our system will display three oseltamivir drugs. The drugs that are centrally purchased are ranked first and are the drugs we prioritize for use.

Among the 39 drugs selected from the eighth batch of national organized drug procurement, they cover common and chronic diseases such as anti infection, cardiovascular and cerebrovascular diseases, anti allergy, and mental illnesses. The commonly used antihypertensive drug amlodipine atorvastatin calcium tablets also reduced their price by 48%. For the first time, heparin drugs have been included in this centralized procurement, which are widely used in the treatment of a series of diseases such as myocardial infarction and dialysis, benefiting more patients. According to the agreed procurement volume, it is estimated that the country can save 16.7 billion yuan annually.

Zhou Jiangbo, Director of the Medical Pricing and Tendering Procurement Department of Henan Provincial Medical Insurance Bureau: There are 2952 pharmaceutical institutions participating in this centralized procurement in Henan Province. We plan in advance and organize the selected enterprises, distribution enterprises, and medical institutions to sign tripartite supply agreements in a timely manner. At present, there is sufficient supply of selected drugs. Especially for some special drugs, having one main supplier and two backup suppliers can better meet clinical supply needs.

"Consistency" evaluation to improve the quality level of centralized procurement of generic drugs

According to the rules of national drug procurement, generic drugs are only eligible to participate in centralized procurement if they pass the "consistency evaluation". Since 2018, the cumulative number of drugs that have passed the consistency evaluation of generic drugs in China has rapidly increased from less than 200 at the time to over 3000 at present. At the same time, the proportion of patients using original research drugs and high-quality drugs such as generic drugs that have passed the consistency evaluation has increased from 50% before centralized procurement to over 90%.

So what is consistency evaluation? What role can it play?

"Consistency evaluation" refers to the consistency of quality and efficacy between generic drugs and original drugs, with specific requirements such as consistent stability, consistent in vitro and in vivo dissolution patterns, and consistent impurity mass spectrometry. Under the promotion of centralized procurement, high-quality generic drugs are gradually occupying the mainstream of clinical medication.

Jiang Changsong, Director of the Price Procurement Department at the National Medical Security Research Institute of Capital Medical University: This consistency evaluation is actually simply referred to as bioequivalence. Are you clinically equivalent? Is it generally equivalent and effective when used on patients. This requires a real-world evaluation in clinical practice. The medical insurance department, in collaboration with this health department and more than 30 large tertiary hospitals across the country, conducted a real-world consistency evaluation of generic and original drugs for the first three batches of 37 drugs. With over 200000 cases, big data analysis, and rigorous statistical evidence, the selected generic drugs in our centralized procurement have no statistically significant differences in safety and efficacy compared to the original research drugs.

Centralized procurement promotes the improvement and upgrading of clinical medication structure

There is a large population of diabetes patients in China. In 2022, the country carried out a special intensive purchase of insulin, with an average price reduction of 48%. The selected products have been on the market for more than a year. Let's look at the drug use of patients.

Ms. Liu, a citizen of Nanning, suffers from type 2 diabetes. In order to control her condition, she needs to inject Degu insulin twice a day and consume about two per month. She calculated for the reporter the difference in insulin expenditure before and after centralized procurement.

Ms. Liu, a resident of Nanning, Guangxi: Before the price adjustment in May last year, one unit was priced at 150 yuan. In a month, about two units were priced at over 300 yuan. After the price adjustment, this unit is priced at over 70 yuan. Two pieces a month is 150, and over the course of a year, we have to save 1800 yuan, which also reduces the burden a lot.

Before the centralized procurement, the prices of commonly used second-generation and third-generation insulin on the market were higher, and the difference was twice. After the centralized procurement, the overall price of insulin decreased, with the third-generation insulin with better therapeutic effects experiencing a greater decrease. The change in price also guided the clinical use.

Qin Yingfen, Director of the Department of Endocrinology at the First Affiliated Hospital of Guangxi Medical University: Some old patients actually want to switch plans and choose better dosage forms when their blood sugar control is poor. However, because patients consider price issues, they refuse to switch to such a new plan. After the price reduction, the conversion of treatment plans for these patients will be easier for them to accept.

Nowadays, the specialized insulin procurement has been implemented for over a year, and the proportion of third-generation insulin usage in this hospital has reached 90%. Price is no longer the main consideration factor for doctors and patients to choose which insulin treatment plan, and different clinical needs are fully met.

Xu Guangbao, Deputy Director of the Medical Security Bureau of Guangxi Zhuang Autonomous Region: The insulin special procurement covers commonly used second-generation and third-generation insulin in clinical practice, including well-known enterprise products commonly used by medical institutions as well as emerging enterprise products. While reducing the burden on patients, it achieves a high match with clinical demand. Based on the first year's reported procurement volume of approximately 3.64 million medical and health institutions in Guangxi, an annual cost savings of 105 million yuan can be achieved.

Centralized procurement changes the competitive landscape and promotes innovative development of enterprises

We see that centralized procurement guides pharmaceutical companies from the past of "channel and sales" to the current "quality and price". Products within the scope of centralized procurement bid farewell to the era of high gross profit margins, and selected enterprises in centralized procurement have also ushered in new development changes.

In the production workshop of Qilu Pharmaceutical Group in Jinan, Shandong, the fully automated intelligent production line is operating at full capacity, producing selected products through national centralized quantity procurement. Qilu Pharmaceutical has participated in 7 national organized drug procurement events, except for insulin specific procurement. The first batch of procurement by Qilu Pharmaceutical selected atorvastatin tablets, which are used to prevent and treat cardiovascular and cerebrovascular diseases caused by hyperlipidemia. Patients generally need to take medication for a long time, and the market demand is high. In the first batch of national drug procurement in 2019, 5 companies participated in the bidding, and ultimately 3 were selected. Qilu Pharmaceutical offered the lowest price, reaching 0.12 yuan per tablet, even about 78% lower than the price of the previous centralized procurement pilot.

Bao Haizhong, Vice President of Qilu Pharmaceutical Group: At the time of centralized procurement, atorvastatin tablets were a newly launched product with a market share of 0. From the current centralized procurement perspective, although the price of this product has significantly decreased, for Qilu, the total profit of this product has significantly increased.

With the support of the centralized procurement policy, atorvastatin tablets have become one of the most stable sources of revenue for the company in just a few years, with a cumulative sales revenue of 1.33 billion yuan. Sales have been guaranteed, and Qilu Pharmaceutical will actively participate in the following centralized procurement, further expanding the market size.

Bao Haizhong, Vice President of Qilu Pharmaceutical Group: The payment cycle has been shortened from six months to the next month, which greatly reduces the pressure on corporate funds and economic risks.

With a solid foundation, Qilu Pharmaceutical has increased its research and development speed of innovative drugs, with over 80 innovative drug projects under development. It will invest no less than 10% of its annual revenue in research and development. According to data released by the National Medical Insurance Administration, among the top 10 pharmaceutical companies in the A stock market, the total R&D investment in 2022 was 2.48 times that of 2018.

Jiang Changsong, Director of the Price Procurement Department at the National Medical Security Research Institute of Capital Medical University, said that its sales can be greatly increased, which provides a good financial guarantee for the enterprise. At the same time, after centralized procurement, its costs can also be reduced, including sales costs, management costs, and financial costs. This is equivalent to the net profit of the enterprise. Therefore, when we look at the annual reports of the companies participating in centralized procurement, the profit margin of most listed pharmaceutical companies has not actually decreased, and they have also moved towards innovation. Their research and development expenses have increased significantly compared to five years ago.

National centralized procurement drives a 19% decrease in drug procurement price index

The National Medical Insurance Administration stated that in recent years, the effectiveness of centralized procurement has been continuously showing, and it has begun to reverse the continuous upward trend of drug prices in China. According to calculations, the drug procurement price index in China decreased by 19% in 2022 compared to 2018.

The Drug Purchase Price Index is a comprehensive index calculated based on the prices of over 12000 drugs on the national medical insurance information platform. Experts say that drug procurement has contributed more than 70% of the decrease in prices of Western medicine in the procurement price index.

Jiang Changsong, Director of the Price Procurement Department at the National Medical Security Research Institute of Capital Medical University: This is actually closely related to the medication structure in our country. In the structure of Western medicine in our country, generic drugs account for the majority, and their amount also accounts for the majority. When you do centralized procurement, the price of generic drugs drops significantly, so the price index of the entire Western medicine decreases. So the contribution rate of collective procurement is even greater.

At the same time, some "imported old drugs", although they have passed the patent period, were still sold domestically at relatively high prices, such as imatinib for treating leukemia. The original research drug was priced at over 10000 boxes before centralized procurement. Although the first batch of national centralized procurement of original research drugs was not selected, the price of imatinib original research drugs has also decreased from over 10000 yuan per box to over 7000 yuan due to the impact of the decrease in generic drug prices.

Jiang Changsong, Director of the Price Procurement Department at the National Medical Security Research Institute of Capital Medical University: Basically, each batch has a 10% to 15% proportion of varieties, and the original research drugs will also be selected, with a significant price reduction. In fact, after the centralized procurement is completed, there are some original research drugs that have not been selected, and he will also choose to actively reduce prices to improve his competitiveness. Through the mechanism of volume based procurement, this market competition response has occurred, achieving a reasonable reduction.