General Office of the State Council, Plan for the Pilot Project for the Arrangement by the State of the Centralized Procurement and Use of Pharmaceuticals

Issued: January 1, 2019

Main contents: The state is organizing a pilot project in the 11 municipalities of Beijing, Tianjin, Shanghai, Chongqing, Shenyang, Dalian, Xiamen, Guangzhou, Shenzhen, Chengdu and Xi'an for the centralized procurement and use of pharmaceuticals, selecting the pilot products from brand-name drugs whose corresponding generic drugs have passed a consistency evaluation of their quality and efficacy (here and hereinafter including those approved to go on the market based on the new registration classification of chemical pharmaceuticals; a “Consistency Evaluation”) (Article 1(1)).

All producers of pharmaceuticals (national distributors of imported pharmaceuticals are deemed producers) that fall within the centralized procurement scope, have been approved by the state's drug regulatory department and have entered the market in mainland China may participate (Article 2(1)).

The quality inclusion criteria mainly take into account the clinical efficacy of the pharmaceutical, adverse reactions, batch-to-batch consistency etc., with passing of a Consistency Evaluation in principle serving as the basis. The supply inclusion criteria mainly take into account the enterprise's production capacity, supply stability, etc., and enterprises that can ensure the supply of the procurement quantities in the pilot regions may be considered. The joint procurement office shall be responsible for drafting the specific norms for the inclusion criteria (Article 2(3)).

Where there are at least three eligible producers, procurement shall be done by an invitation of bids; where there are two eligible producers, procurement shall be done by price negotiation; and where there is only one eligible producer, procurement shall be done by negotiations (Article 2(4)).

With respect to a pharmaceutical that is centrally procured, if it falls within the scope of the medical insurance directory, the centralized procurement price therefor shall be the medical insurance payment rate and, in principle, the medical insurance fund shall effect settlement at the same payment rate for an active ingredient, a reference formulation or a generic drug that has passed a Consistency Evaluation under the same brand name. For a pharmaceutical, the patient use price of which is higher than the payment rate, the patient shall himself /herself cover the portion exceeding the payment rate. If there is a relatively large discrepancy between the patient use pharmaceutical price and the centralized procurement price for the selected pharmaceutical, the payment rate may be gradually revised by completing the revision within two to three year, and complementary policy measures shall be formulated therefor. For a pharmaceutical, the patient use price of which is less than the payment rate, payment shall be made at the actual price (Article 4(1)).