More bulk buys to further lower medical costs

Eighth round of procurement to bring greater benefits after previous success

The National Healthcare Security Administration said this week that it will roll out more bulk procurement programs for drugs and medical consumables this year to lower the public's financial burden.

An eighth round of centralized drug procurement will be launched this year, the administration said in a notice released on Wednesday evening. It said in an earlier document that the latest round will cover about 40 types of medications such as treatments for infections and drugs for cardiovascular diseases.

Since the administration was set up in 2018, it has been pushing forward the program where pharmaceutical companies participate in a bidding process and cut their prices to compete for permission to sell products via large-volume, government-led procurement.

"By the end of this year, each provincial-level region should have at least 450 types of drugs that have been involved in regional or national procurement programs, including 130 types involved in regional programs," said the administration.

The variety of such drugs should cover chemical drugs, traditional Chinese medicine drugs and biological drugs, it added.

The administration will also expand the bulk buying of medical consumables, with a focus on products used for cardiology and orthopedics.

It will guide more provinces to launch bulk-buy initiatives for consumables used for general surgery such as staples and ultrasonic knives, as well as explore approaches to procure in vitro diagnostic test kits.

The administration will continue to govern the pricing of dental implants, it added.

So far, the administration has launched seven rounds of centralized bulk buying for drugs, leading to an average price cut of 50 percent for 294 medications as well as three rounds of bulk buying for medical consumables that resulted in a price cut of over 80 percent.

The bulk-buy mechanism at the national and regional levels has so far saved patients more than 400 billion yuan ($58.2 billion) in total.

Separately, the administration said on Thursday that it has deployed multiple approaches to ramp up its capability to enhance oversight over healthcare funds in the past five years.

"First and foremost, we have promoted regular and comprehensive supervision of agencies, medical institutions and insured people, while rolling out random checks and pledged zero tolerance against irregular practice," said Gu Rong, an official with the administration's fund supervision department.

Since 2019, the administration has dispatched 184 teams to randomly examine 384 medical institutions and found malpractices involving 4.35 billion yuan of healthcare funds.

The administration has also banded together with health and public security authorities to crack down on insurance fraud. Last year, officials cracked about 2,700 cases and arrested around 7,300 suspects. A total of 1.07 billion yuan of improperly used medical funds have been retrieved.

Wang Zhen, a researcher at the Chinese Academy of Social Sciences' Institute of Economics, said that the country has developed 155 supervision teams for medical funds comprising 8,600 staff members. That means each supervision staff member is responsible for about 100 medical institutions or 160,000 insured people, compared with one supervision staff member for every 40,000 insured people in the United States.

Wang said that the lack of per capita supervision can be made up by improving the capabilities of these teams.