China will take a step forward in its centralized drug bulk-buying program, and make it a regular and institutionalized practice to lower medical costs for the general public, the State Council executive meeting chaired by Premier Li Keqiang decided on Jan 15.

The country has undertaken the major reform of bulk-buying and use of drugs in recent years, to help make medical treatment more affordable to the public. By the end of last year, three rounds of such bulk-buying were conducted, and drugs under the program saw an average price cut of 54 percent. Over 53 billion yuan has been saved each year, and several hundred million patients benefited. The fourth round of procurement will soon start, during which more high-value medical consumables will be covered.

“The bulk-buying program has worked well. It is a major step in reforming medical institutions,” Premier Li said, “The scheme has helped to lower, over time, medical costs for the public, and to keep the operation of medical insurance funds sustainable.”

The meeting on Jan 15 decided to advance the coordinated reforms in medical services, medical insurance and pharmaceuticals, and to place centralized bulk-buying on a regular and institutionalized basis.

Under the principle of ensuring essential and clinical needs, high-demand high-cost drugs in the catalog of basic medical insurance will be prioritized in the procurement. The program will extend, over time, to other clinically needed and quality drugs and consumables available on the domestic market.

All public medical institutions are expected to participate in the centralized bulk-buying. Special arrangements will be made for the procurement regarding drugs to treat rare diseases.

Eligible imitation drugs and original drugs will participate in the centralized bulk-buying, all under their generic names. Drug manufacturers and their drug and consumable products will be selected through fair competition on quality and price. Medical institutions should use the selected drugs on a priority basis, and expand procurement as much as demand allows.

Successful bidders must ensure that price cuts in no way compromise the quality and effectiveness of their products. Tighter control will be exercised over the production, circulation and use of selected drugs.

“Essential drugs and consumables should be the mainstay of the procurement, as our basic medical insurance scheme intends to meet primary medical needs. We must firmly bear this in mind. The program will not obstruct hospitals, Tier-Three hospitals in particular, from prescribing drugs of their own choosing,” Premier Li said.

While lessening the financial burden on patients, corporate profitability will also be duly considered under the bulk-buying program. Pharmaceutical and consumable producers will be encouraged to develop sectoral concentration amid competition, and pursue product innovation and upgrading.

The medical insurance costs saved under the drug procurement will be given to medical institutions as an incentive in accordance with related regulations. The goal is to make the drug bulk-buying reform beneficial for both patients and pharmaceutical companies, as well as medical institutions.