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Beijing\'s drug procurement, the key is "negotiation" rather than "bidding"
Createdate:2015-07-13

The long-brewing "Beijing public medical institutions pharmaceutical products sunshine procurement plan" was finally announced and launched on July 7, and the plan is not much different from the contents of the previous circulation, it is still based on medical institutions as the main procurement, through the formation of hospital groups and pharmaceutical companies to negotiate prices, and all drugs used by medical institutions are included in the scope of sunshine procurement. It is worth noting that the key word is "negotiation" rather than "bidding", that is, drug prices will be negotiated through different forms of negotiations to reach the final result. Beijing Pharmaceutical Central Procurement Service Center answered questions on related issues late on July 9.

Beijing\'s drug sunshine procurement model, in accordance with the relevant spirit of No. 7, No. 70, the implementation of drug classification procurement, batch implementation. It is reported that the first batch of procurement has been delimited, mainly for Western medicine varieties (including chemical drugs and biological products). By the end of 2015, we will promote the procurement of proprietary Chinese medicines.

Organizational structure and functions

As the highest decision-making and leading organization of drug procurement, the leading group of pharmaceutical products Sunshine Procurement is composed of the mayor of Beijing Municipal Government as the leader, health, development and reform, economic informatization, finance, human social security, commerce, industry and commerce, drug supervision, traditional Chinese medicine and other departments. The office of the leading group is located in the Municipal Health and Family Planning Commission, responsible for the daily organization and management of Sunshine procurement.

Among them, the Beijing Municipal Commission of Health and Family Planning is responsible for the formulation of the plan, the Municipal Development and Reform Commission is responsible for the price supervision, the municipal Human Resources and Social Security Bureau is responsible for promoting the reform of the payment system, and the municipal food and drug regulatory department is responsible for the formulation of economic and technical tender indicators and audit standards, forming a multi-directional drug procurement plan, implementation and supervision system. Among them, the drug regulatory department is involved in the formulation and review of the "double envelope" technical target indicators, and plays its specific function of drug quality supervision.

Four major procurement catalog delineation

Beijing will collect the list of drugs actually purchased by the city\'s medical institutions in the previous year to form the "Beijing Medical Institutions Drug Procurement Catalogue", which is divided into "National Negotiation Drug Catalogue", "Shortage Drug Catalogue", "Low Price Drug Catalogue" and "Beijing Medical Institutions Bidding Negotiation Drug Catalogue" according to the classification procurement spirit of document No. 7. Medical institutions set up hospital groups to purchase (tan) and purchase (pan) in different groups.

These four categories of drugs are as follows:

1. The National Negotiation Drug List is a drug list formulated by the National Health and Family Planning Commission for national negotiation or designated production, mainly involving some patented drugs, exclusively produced drugs, and some clinically necessary drugs with small dosage and short market supply.

2. The List of Drugs in Short supply is a list of drugs formulated according to the situation of shortage and out of stock in the supply guarantee of urgent (rush) rescue and clinically essential drugs in Beijing medical institutions.

3. The Catalogue of Low-cost Drugs is a catalogue of drugs determined in accordance with the list of low-cost drugs issued by the pricing authority.

4. The procured varieties not included in the above list shall be included in the List of Drugs for Bidding Negotiation in Beijing Medical Institutions.

The first three catalogs have a strong nature of supply and demand docking, and the operation mode of bidding and procurement in various provinces and cities is either directly hanging the network procurement or negotiating the price. The drugs outside these three catalogues will be classified into the "Beijing Medical Institution bidding negotiation Drug Catalogue", it is not difficult to see Beijing\'s determination to negotiate the purchase of drugs to the end.
Purchase in batches

After the procurement catalogue is delineated, not all the catalogues are purchased simultaneously, but in different batches.

The first batch of procurement scope mainly includes the varieties in the "Shortage of Drugs Catalogue" and the "Beijing Medical Institutions bidding negotiation drug Catalogue" Western medicine varieties (including chemical drugs and biological products). Among them, the "low-cost drug Catalog" completed in 2015 is not included in the first batch of procurement. Low-cost drugs are currently conducted by the Beijing Municipal Hospital Authority, Chaoyang District, Yanqing County, three units of the hospital group low-cost drugs Sunshine procurement bidding negotiation pilot exploration, after mature to promote to the city. In addition to the "National negotiation Drug List", the remaining catalogs will be classified and batch centralized procurement organization, after the completion of Western medicine procurement, by the end of 2015 to promote the purchase of proprietary Chinese medicine.

Some friends may ask: "The National negotiation drug Catalogue" is formulated by the National Health and Family Planning Commission, the catalogue has not yet been published, how does Beijing determine such varieties?" Because only by excluding such varieties, can the remaining varieties be included in the "Beijing Medical Institutions bidding negotiation drug Catalog". In this regard, the Beijing Pharmaceutical centralized Procurement Service Center made a question later on July 9, the varieties in the "National negotiation drug Catalog" should participate in sunshine procurement before the implementation of the catalog, and after the national negotiation results are out, they will be uniformly purchased according to the state.

To sum up, the order of batch procurement in Beijing should be "Low price drug catalogue" (completed), then "shortage drug catalogue" + "Bidding negotiation catalogue" (Western medicine), and finally "National negotiation catalogue". First western medicine, then Chinese medicine.

In this way, the varieties that enter the bidding negotiation in the early stage but belong to the national negotiation catalog do not exist two prices, one of Beijing and one of the country. If the latter is lower than the former, the implementation of the low price is finished, if the former is lower than the latter, which purchase price should be implemented? Don\'t worry, there are price linkage policies and regulatory measures to solve this problem.

Price linkage and supervision

In addition to having a strong negotiating nature, the plan also reflects the strong desire to urgently reduce the price, and even introduces the national lowest price as the basis for negotiation. For example, the buyer and seller of varieties shall take the national lowest price provided by the procurement platform and the lowest transaction price of various medical institutions in Beijing as an important basis for negotiation. When the medical institution (or hospital group) negotiates the price with the production enterprise, it should also take into account the principle of stable price and dynamic adjustment, and if the transaction price is significantly higher than the transaction price of other medical institutions in Beijing and other provinces, it should promptly share the negotiation results of other medical institutions to ensure that the transaction price is at a reasonable level.

Will the GPO land in Beijing?

As for the specific procurement method, it has been rumored that Beijing will operate through the internationally popular GPO (Group Purchase Organization) mode, but the plan has no specific content for the time being. It only mentions "optimizing the drug procurement process and functions of the procurement platform to support diversified online drug procurement transactions such as conventional procurement, group procurement, and joint procurement".

The GPO model has a precedent in Beijing, and Jiashitang cooperates with Shougang hospitals to centrally purchase and supply the medical products (including drugs and consumables) they need. Therefore, it is not ruled out that third-party procurement agencies should be entrusted with the GPO model in the subsequent formal programmes and in the procurement methods of the hospital groups.

This is still a certain distance from the GPO model in developed countries, which can only be regarded as the prototype of GPO, but from the current form of national drug bidding and procurement, strengthening the price negotiation between institutions and downplaying point-to-point sales is already the development trend of future bidding and procurement, from which a real GPO is born. Until the transition to higher-level PBM (pharmacy Benefit Management) is not impossible, there is a huge market opportunity.

Information source: Medical Economic News

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