People's Daily: New rules for centralized drug procurement bring about new changes

    Many experts who observed and guided this centralized procurement said that in the future, the centralized procurement rules will continue to be optimized. However, the "anti-involution" in the generic drug sector should not be limited to the downstream procurement stage. Relevant departments have the responsibility to guide enterprises to scientifically initiate projects, avoid the concentrated production of the same drug and the intensification of homogeneous competition, and prevent "involution" from the source. Otherwise, it is neither scientific nor realistic to pin all the goals of the industry's "anti-internal competition" on the new rules of centralized procurement.

The results of the 11th batch of national organized drug centralized procurement are about to be officially announced. The adjustment of rules has become a highlight of this centralized procurement. The new rules focus on "stabilizing clinical practice, ensuring quality, opposing internal competition, and preventing bid rigging". Medical institutions can report sales volume by brand, set "anchor prices" and revival mechanisms, guide the market to engage in healthy competition, and create a favorable environment for the healthy development of the pharmaceutical industry.

On October 31st, the public announcement of the proposed winning results of the 11th batch of national organized drug centralized procurement, which has attracted much social attention, came to an end. The result is about to be officially announced. It is expected that patients will be able to use a new batch of high-quality and reasonably priced selected Chinese medicines in February 2026.

At the drug centralized procurement application information disclosure conference held in Shanghai on October 27th, 453 products of 55 types from 272 enterprises were qualified for the proposed selection. This means that since the establishment of the National Healthcare Security Administration, the number of drug varieties included in the national organized drug centralized procurement has increased to 490.

Before the bid opening of this centralized procurement, the information of "comprehensive optimization of rules" had already raised expectations in the industry. A series of principles such as "stabilizing clinical practice, ensuring quality, opposing internal competition, and preventing bid rigging" have been adjusted in aspects such as the reporting volume of medical institutions, the bidding threshold for enterprises, and the entry of bidders through competitive bidding. Have these principles and the corresponding new rules been effective and achieved the expected results? Journalists interviewed relevant personnel at the scene of the public disclosure conference on the application for centralized drug procurement.

More than 70% of the brands successfully reported their sales volumes, and most of the mainstream enterprises with strong supply capabilities and quality guarantees were selected

The types of drugs involved in this centralized procurement cover commonly used and life-saving drugs for chronic and major diseases, including anti-infection, anti-tumor, anti-allergy and asthma, diabetes, cardiovascular disease drugs, etc. In the past, when the selected drugs were placed in hospitals through centralized procurement, there might be situations where the preferred drug brands used by hospitals were different from those originally used by patients. Although this alleviated the burden on patients, it also brought some troubles.

This centralized procurement has optimized the reporting method for quantities. Medical institutions can report quantities either by generic name or by specific brand. According to the statistics before the bid opening, among 46,000 medical institutions, 77% registered the brand. This is conducive to enabling more medical institutions and patients to use lower-priced drugs without changing brands.

From the selected results, it can be seen that 75% of the reported quantities of the purchased products by medical institutions have been met. Most mainstream enterprises with strong supply capacity and quality guarantee were selected. In each region, there are multiple selected enterprises providing supplies, and the selected varieties are more diverse and rich.

Compared with price, the quality of drugs is also highly concerned. The new rules for this centralized procurement place greater emphasis on the quality control level of enterprises, raise the quality threshold for enterprises to bid, put forward requirements for the actual production experience of enterprises, and clearly stipulate that the bidding drugs must not have failed random inspections within two years, and the production lines where they are located must not have violated GMP (Good Manufacturing Practice for Drugs) within two years.

The fact that a few enterprises failed to obtain the participation qualification due to not meeting the above conditions indicates that the rule of raising the quality threshold has truly taken effect. A relevant official from the National Healthcare Security Administration said. In addition, the drug regulatory authorities will incorporate the selected drugs into the scope of key supervision and inspection, achieving full coverage of both the inspection of selected enterprises and the sampling inspection of selected products, and making every effort to ensure the quality and safety of the centralized procurement drugs.

The "anti-involution" rule has played a certain role. If it is lower than the cost, enterprises rationally do not accept it

October 27th was a long day for many representatives of the manufacturers participating in the centralized procurement.

My colleague went to queue up at around 6:30 in the morning and was lucky enough to get a relatively early position. We have already handed in the materials. Early in the morning of October 27th, outside the venue, the sales director of a Zhejiang pharmaceutical company in the East China region told the reporter, "We have invested in three varieties. I heard that if everything goes smoothly, the results will be out in the evening. I hope it can end soon."

According to statistics from the National Office for Joint Drug Procurement, due to the large number of enterprises participating in this centralized procurement, the intensity of competition is much higher than before.

     No longer simply taking the lowest quote as the sole reference for price difference control, setting an "anchor price" (taking the higher of the "lowest quote" and 50% of the "average entry price" as the "anchor point") to prevent extreme low-price shocks, two types of revival mechanisms, namely "entry revival" and "non-entry revival", are introduced to guide the market to engage in healthy competition. Moreover, all bidding enterprises must commit to offering quotations no lower than the cost. For enterprises whose quotations are lower than the "anchor price", they are required to make a statement on the rationality of the quotations and explain the specific cost structure (such as manufacturing costs, period expenses, sales profits, etc.) to respond to the public's concerns about the quality of the low-priced selected drugs. Objectively speaking, this new "anti-internal competition" rule of centralized procurement has been well considered.

During the bid opening process on October 27th, the reporter learned that the lowest winning bid price of several varieties was indeed lower than 50% of the average bid price. As this centralized procurement no longer uses such bids as "anchor prices" to link and restrict the winning bid prices of other enterprises, it ensures that drugs with a certain range higher than the lowest bid price have the opportunity to be selected or "revived" The original intention of "anti-involution" has been achieved to a certain extent. Meanwhile, repeated measures such as promoting and guiding enterprises to quote scientifically in the early stage have also played a certain role. This centralized procurement maintained a relatively high winning rate, and the average price difference of the winning products was significantly smaller than that of previous batches, indicating that the consistency of expectations or costs among different enterprises is strengthening.

Not only that, the new rules have also given enterprises a bit more rationality. When some enterprises are faced with the opportunity to "revive", considering that the volume reported by medical institutions is relatively small, even if they "revive", it is difficult to spread the cost through a large procurement volume, they rationally choose to give up.

To guide enterprises to scientifically initiate projects and prevent "intra-industry competition", it is necessary to start from the source

    At the scene where the non-shortlisted enterprises accepted the highest selected price to "revive" the signing, a representative of a powerful enterprise in the pharmaceutical industry told the reporter that although his enterprise could accept the selected price, the profits of many selected varieties this time were very meager.

The goal of centralized drug procurement is, on the one hand, to reduce the drug costs for insured individuals, improve the efficiency of medical insurance fund utilization, pay more for the value of drugs, and be less consumed by the exaggeration of drug marketing. On the other hand, it is also hoped to promote the transformation of the business model in the generic drug industry, increase market concentration, and force enterprises that previously relied on the production of generic drugs to break away from the path dependence of "marketing is king", and pay more attention to the cultivation of core competitiveness such as quality and innovation. However, in the industry reality of excessive "intra-industry competition" in the generic drug sector, the public can't help but worry that the quality problems of centralized drug procurement may arise due to excessively low profits. The industry will also be anxious that the problem of low profit margins of enterprises will be transmitted to the innovative drug sector. These situations have put great pressure on the centralized procurement system.

According to the selection criteria for this centralized procurement, "the number of reference preparations and generic drug enterprises that have passed consistency evaluation should reach 7 or more". However, in reality, on average, there are 14 enterprises for each variety, among which 3 varieties have more than 30 competing enterprises. The most fiercely competitive variety, dihydroxypropyl theophylline injection, has 48 bidding enterprises... On-site experts commented that such competition, on the one hand, reflects that China's pharmaceutical industry has sufficient production and supply capacity, which is conducive to the formation of a fully competitive market environment. On the other hand, in a situation where dozens of enterprises are competing, it is hard to avoid the situation where the quotations for certain varieties are relatively low.

It is notable that last year, the 2-hydroxypropyl theline injection failed to be subject to centralized procurement as it did not meet the requirement of having more than seven enterprises that had passed the evaluation. One year later, the number of certified enterprises suddenly increased by over 40, making this variety the "king of competition".

Not only are there many enterprises that produce with their own licenses, but some do not produce themselves and entrust other enterprises to do so. Some enterprises obtain licenses by entrusting research and development, and then entrust production after obtaining the licenses, which has disrupted the original industrial ecosystem. A representative of an enterprise participating in the centralized procurement in Chongqing said this. Such a view has been mentioned many times in the interviews with journalists.

It will take several years from project initiation to obtaining the certificate, and the cost will also amount to tens of millions of yuan. Once the certificate is obtained, if one does not participate in the centralized procurement, the investment will become a sunk cost. A representative of a manufacturer that has just entered the competition track of generic drugs in centralized procurement said. Did you understand the competitive landscape when initiating the project? There are still so many generic drugs that no one has ventured into. Why not choose them? The representative did not answer the reporter's questions.

Many experts who observed and guided this centralized procurement said that in the future, the centralized procurement rules will continue to be optimized. However, the "anti-involution" in the generic drug sector should not be limited to the downstream procurement stage. Relevant departments have the responsibility to guide enterprises to scientifically initiate projects, avoid the concentrated production of the same drug and the intensification of homogeneous competition, and prevent "involution" from the source. Otherwise, it is neither scientific nor realistic to pin all the goals of the industry's "anti-internal competition" on the new rules of centralized procurement.