As a pilot province for medical reform, Guangdong has once again started a new round of exploration in the reform of basic drug bidding.
On May 27, the Guangdong Provincial Medical Procurement Platform formally issued the “Notice on requesting some production companies to confirm the price of grass-roots purchases rising by 10%†(hereinafter referred to as the “Noticeâ€). According to the "Notice", the 334 items in the attached Annex are allowed to win the bid at the price of 10% of the purchase price of the basic medicine.
According to the Guangdong Provincial Procurement Center for Medicines, the price of the above 334 items was more than 110% of the average purchase price of the grass-roots at the time of winning the bid, which was ultimately in line with the implementation plan for the centralized procurement of essential medicines of the primary health care institutions of the Guangdong Provincial Government in 2011. This arrangement was made in accordance with the provisions of the "Program".
Enterprises generally welcome these practices and believe that this move will help reduce the negative impact of “only low prices†and further promote the stable development of the industry.
Although only 10%, it means "a big step"
“In principle, the centralized procurement of grass-roots medicines must not be higher than the actual purchase and sale price of the market, and the level of average purchasing prices of grass-roots units should not be too different.†This was issued on June 10 last year in Guangdong Province and issued by the Government of the People's Republic of China on the Basics of Printing and Distributing Government-run Basic Medical and Health Institutions. Proceedings of the Measures for Implementing the Centralized Procurement of Medicinal Products (Trial) (Guangdong Office [2011] No. 32).
However, this provision was eventually loosened in the "Notice" issued on November 18 last year. According to the new regulations, the bid price of each species is not higher than the price of 10% of the basic drug purchase price announced by the national and provincial price administrative departments, and is 10% higher than the purchase price of the basic drug, and the bid price is adjusted to be low. The price of 10% increase in the purchase price of the basic drug base is confirmed by the company and then won the bid at the price.
For enterprises that do not confirm within the specified time, the measures taken by the Guangdong Provincial Pharmaceutical Procurement Center are to cancel the enterprise's qualification for winning bids, and substitute the Other non-winning bids in the same group in descending order of price.
For this price increase, the person in charge of a pharmaceutical company in Guangzhou told Nandu reporters that there were 334 varieties compared to more than 3,300 items. There are 551 kinds of basic medicines in Guangdong. According to the calculation of one product, two rules and three dosages, usually there will be 6 for each variety. About about 3,300 essential product specifications in the whole province of Guangdong, that is, the basic medicines for which the price of the winning bid is only up to 10% of the specifications of all varieties. The number of price increases is not much, and the rate of 10% price increase is not too large, but at least it means that basic drug bidding has been reformed in a good direction.
Guojin Securities even asserted that through the revision of the Guangdong Province's plan, the correction of the bidding policy for basic medicines is gradually occurring. The extreme tendering policies in each province will be a small probability event, and signs of an improvement in the industry's policies have emerged.
The "New Deal" at or above the county level has been reserved for space. As the "Programme" stipulates, sub-county and higher-grade breeds at and above the county level are not limited by the 10% increase in the average purchase price of the grass-roots level. The original research drug also saw hope.
In fact, the so-called higher-quality drugs are mostly referred to as foreign-invested pharmaceutical companies' original research products and local drug companies that are priced separately. Foreign investors have always had illusions about China's basic drug market.
According to report, as early as last year, the China Association of Pharmaceutical Manufacturers (RDPAC) of the China Association of Enterprises with Foreign Investment had dispatched delegations to Guangdong before and after the introduction of the Guangdong-based medicine program and held discussions with local authorities in charge of drug bidding in Guangdong.
In RDPAC's view, the Pearl River Delta can be comparable to Shanghai, but there is a certain gap between northern and northern Guangdong and western Guangdong. Therefore, Guangdong cannot adopt the Shanghai model completely. However, the Pearl River Delta has the possibility of learning from the "Shanghai model."
Due to the adoption of the method of comprehensive evaluation, the weight of quality was increased, and the weights of quality and price were divided into seven and three parts, and quality levels such as differential pricing were used. The results of the winning bid under the "Shanghai Model" have for the first time allowed more brand-name pharmaceutical companies to win the bid in the basic drug market. According to the statistics from Shanghai's pharmaceutical tendering department, there are more than 60 varieties of joint ventures and foreign drugs involved in the successful bid rules, covering nearly 30 foreign pharmaceutical companies such as Pfizer.
The reform of the “Anhui model†has become a general demand in the industry. According to the “Notice†announced by Guangdong recently, 334 varieties will receive a relative price increase of 10%. Among these varieties, there are both forsythia and poison pills with a minimum unit of less than one point and biosynthetic human insulin injections for as much as several tens of yuan. The former has a size of 6 grams of water pellets per 100 kernels, and the final bid price per tablet is only 0.005 yuan. The latter, 10ml: 400iu size small volume injection, each bid price of 53.9 yuan.
However, if the relevant provisions in the “Anhui Model†continue to be implemented, the above 334 product specifications will not be higher than the average price of the centralized procurement of essential medicines in other provinces of the same species.
This seems to some companies, if the above provisions are implemented, the result will be regrettable. Because, if the final bid price is even lower than the price in Anhui, the successful bidder may only be ultra-low prices. However, such ultra-low prices cannot be sustained for a long period of time due to normal feeding operations.
According to the Zhejiang Pharmaceutical Industry Association’s research report on basic medicine bidding in Anhui last year, Anhui won the bid for 863 items, with a unit price of RMB 1 or less accounting for 20.9%, RMB 5 or less accounting for 66.9%, and RMB 10 or less accounting for 82%. Some of these "low-priced" drugs, even if the bid price is as low as if produced according to Pharmacopoeia standards, could not achieve the cost of raw materials and packaging.
In the eyes of people in the industry, the "Anhui model" clearly ignores many factors such as raw materials, labor, etc. In recent years, both raw materials and labor have risen more noticeably.
On May 27, the Guangdong Provincial Medical Procurement Platform formally issued the “Notice on requesting some production companies to confirm the price of grass-roots purchases rising by 10%†(hereinafter referred to as the “Noticeâ€). According to the "Notice", the 334 items in the attached Annex are allowed to win the bid at the price of 10% of the purchase price of the basic medicine.
According to the Guangdong Provincial Procurement Center for Medicines, the price of the above 334 items was more than 110% of the average purchase price of the grass-roots at the time of winning the bid, which was ultimately in line with the implementation plan for the centralized procurement of essential medicines of the primary health care institutions of the Guangdong Provincial Government in 2011. This arrangement was made in accordance with the provisions of the "Program".
Enterprises generally welcome these practices and believe that this move will help reduce the negative impact of “only low prices†and further promote the stable development of the industry.
Although only 10%, it means "a big step"
“In principle, the centralized procurement of grass-roots medicines must not be higher than the actual purchase and sale price of the market, and the level of average purchasing prices of grass-roots units should not be too different.†This was issued on June 10 last year in Guangdong Province and issued by the Government of the People's Republic of China on the Basics of Printing and Distributing Government-run Basic Medical and Health Institutions. Proceedings of the Measures for Implementing the Centralized Procurement of Medicinal Products (Trial) (Guangdong Office [2011] No. 32).
However, this provision was eventually loosened in the "Notice" issued on November 18 last year. According to the new regulations, the bid price of each species is not higher than the price of 10% of the basic drug purchase price announced by the national and provincial price administrative departments, and is 10% higher than the purchase price of the basic drug, and the bid price is adjusted to be low. The price of 10% increase in the purchase price of the basic drug base is confirmed by the company and then won the bid at the price.
For enterprises that do not confirm within the specified time, the measures taken by the Guangdong Provincial Pharmaceutical Procurement Center are to cancel the enterprise's qualification for winning bids, and substitute the Other non-winning bids in the same group in descending order of price.
For this price increase, the person in charge of a pharmaceutical company in Guangzhou told Nandu reporters that there were 334 varieties compared to more than 3,300 items. There are 551 kinds of basic medicines in Guangdong. According to the calculation of one product, two rules and three dosages, usually there will be 6 for each variety. About about 3,300 essential product specifications in the whole province of Guangdong, that is, the basic medicines for which the price of the winning bid is only up to 10% of the specifications of all varieties. The number of price increases is not much, and the rate of 10% price increase is not too large, but at least it means that basic drug bidding has been reformed in a good direction.
Guojin Securities even asserted that through the revision of the Guangdong Province's plan, the correction of the bidding policy for basic medicines is gradually occurring. The extreme tendering policies in each province will be a small probability event, and signs of an improvement in the industry's policies have emerged.
The "New Deal" at or above the county level has been reserved for space. As the "Programme" stipulates, sub-county and higher-grade breeds at and above the county level are not limited by the 10% increase in the average purchase price of the grass-roots level. The original research drug also saw hope.
In fact, the so-called higher-quality drugs are mostly referred to as foreign-invested pharmaceutical companies' original research products and local drug companies that are priced separately. Foreign investors have always had illusions about China's basic drug market.
According to report, as early as last year, the China Association of Pharmaceutical Manufacturers (RDPAC) of the China Association of Enterprises with Foreign Investment had dispatched delegations to Guangdong before and after the introduction of the Guangdong-based medicine program and held discussions with local authorities in charge of drug bidding in Guangdong.
In RDPAC's view, the Pearl River Delta can be comparable to Shanghai, but there is a certain gap between northern and northern Guangdong and western Guangdong. Therefore, Guangdong cannot adopt the Shanghai model completely. However, the Pearl River Delta has the possibility of learning from the "Shanghai model."
Due to the adoption of the method of comprehensive evaluation, the weight of quality was increased, and the weights of quality and price were divided into seven and three parts, and quality levels such as differential pricing were used. The results of the winning bid under the "Shanghai Model" have for the first time allowed more brand-name pharmaceutical companies to win the bid in the basic drug market. According to the statistics from Shanghai's pharmaceutical tendering department, there are more than 60 varieties of joint ventures and foreign drugs involved in the successful bid rules, covering nearly 30 foreign pharmaceutical companies such as Pfizer.
The reform of the “Anhui model†has become a general demand in the industry. According to the “Notice†announced by Guangdong recently, 334 varieties will receive a relative price increase of 10%. Among these varieties, there are both forsythia and poison pills with a minimum unit of less than one point and biosynthetic human insulin injections for as much as several tens of yuan. The former has a size of 6 grams of water pellets per 100 kernels, and the final bid price per tablet is only 0.005 yuan. The latter, 10ml: 400iu size small volume injection, each bid price of 53.9 yuan.
However, if the relevant provisions in the “Anhui Model†continue to be implemented, the above 334 product specifications will not be higher than the average price of the centralized procurement of essential medicines in other provinces of the same species.
This seems to some companies, if the above provisions are implemented, the result will be regrettable. Because, if the final bid price is even lower than the price in Anhui, the successful bidder may only be ultra-low prices. However, such ultra-low prices cannot be sustained for a long period of time due to normal feeding operations.
According to the Zhejiang Pharmaceutical Industry Association’s research report on basic medicine bidding in Anhui last year, Anhui won the bid for 863 items, with a unit price of RMB 1 or less accounting for 20.9%, RMB 5 or less accounting for 66.9%, and RMB 10 or less accounting for 82%. Some of these "low-priced" drugs, even if the bid price is as low as if produced according to Pharmacopoeia standards, could not achieve the cost of raw materials and packaging.
In the eyes of people in the industry, the "Anhui model" clearly ignores many factors such as raw materials, labor, etc. In recent years, both raw materials and labor have risen more noticeably.
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