Yicai:

What are the impacts of centralized procurement of medicines and high-value medical consumables on patients, hospitals, and the pharmaceutical industry? And what specific tasks will be accomplished to implement the achievements of the reform and expand the scope of the reform? Thank you.

Shi Zihai:

Thank you for your questions. For a long time, the prices of pharmaceutical drugs and high-value medical consumables in China have been inflated; especially for certain "imported old drugs," even though their patent periods have expired, they are still sold at relatively high prices in China. And the high-value medical consumables are priced at an even much higher level above the international standards. To address this situation, in accordance with the decisions and deployments of the CPC Central Committee and the State Council, the NHSA has worked with relevant departments to actively promote centralized procurement of medicines and high-value medical consumables, reduce the prices of selected products by reducing the production and marketing costs for selected enterprises.

Over the past five years of reform, the effectiveness of centralized procurement has been demonstrated. First, the burden of pharmaceutical expenses for the general public has significantly reduced. Through centralized procurement, we started to reverse the trend of continuous rise in drug prices in China. According to relevant calculations, compared with 2018, the medicine purchase price index decreased by 19% in 2022. Many people may remember the movie "Dying to Survive," released a few years ago. In the movie, there was a medicine called imatinib, which is used in the treatment of leukemia. The original drug was priced at over 10,000 yuan per box. When the first batch of centralized procurement was launched, we included this drug in the procurement scope. With centralized procurement, the price of generic drugs winning the bid was reduced to about 600 yuan per box. Although the original drug was not selected, its price was also affected by the centralized procurement, and it dropped from over 10,000 yuan per box to just over 7,000 yuan per box, which brought real benefits to leukemia patients. At the same time, the main consumables for cardiology and orthopedics, which people are strongly concerned about, have also been included in the centralized procurement; and the prices of the selected products have decreased significantly; as a result, there was a clear reduction in the burden on patients.

Second, medicine quality has been significantly improved. We paid great attention to the quality of selected products during centralized medicine procurement. By reducing medicine prices, the accessibility of high-quality drugs and consumables has been effectively improved. For example, the proportion of patients using high-quality medicine, such as original drugs and eligible copycat drugs that passed quality consistency evaluation increased from 50% to over 90% after the centralized medicine procurement was launched. The using ratio of chrome alloy stents which have better properties and perform better raised from 60% to more than 90%, after centralized medicine procurement, while stainless-steel stents which originally occupied a larger share of market and have average properties have been generally phased out.

Third, the pharmaceutical industry has become healthier and more sustainable. The centralized medicine procurement guided pharmaceutical enterprises changed their focus from channels and sales towards quality and price. Enterprises' internal driving force – pursuing development through quality improvement – has been strengthened constantly. Since 2018, thanks to centralized medicine procurement, the number of copycat drugs that passed quality and curative effect consistency evaluation rapidly increased to more than 3,000 from less than 200. High-quality drugs are gradually occupying the mainstream of clinical drugs.

Next, we will continuously expand the scale and improve the quality of centralized medicine procurement. Central and local governments will work together to advance progress. On a state level, we have already carried out the eighth round of centralized medicine procurement this year and will work on the fourth round of centralized medicine procurement for high-value medical consumables, mainly intraocular lens and orthopedic sports medicine consumables. A new round of centralized drug procurement will also be carried out. On local level, cross-provincial cooperative procurement will be carried out for those drugs not included in national-level centralized medicine procurement, such as chemical drugs, Chinese patent medicines, interferon, neurosurgical consumables, and in-vitro diagnostic reagents. We will also work with relevant departments to strengthen quality control and supply assurance for products of centralized medicine procurement and urge medical institutions to prioritize purchasing and using selected products so as to ensure the people truly enjoy the fruits of reform. Thank you.