Central land linkage under the collection of national expansion: drug prices step down.

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On November 29, the State Council's Leading Group for Deepening the Reform of the Medical and Health System issued the "Several Policies and Measures to Further Deepen the Reform of the Medical and Health System with the Centralized Procurement and Use of Drugs as a Breakthrough" (hereinafter referred to as the "Measures"). In addition to emphasizing the orderly expansion of the experience of absorbing the advantages of the previous collection, the Measures are particularly noteworthy for the emphasis on the interaction between the central government and the local government, especially for the huge volume of drugs outside the scope of the national collection to take the province as a unit or other forms of collection. Unlike the gradual expansion of national centralized procurement, local centralized procurement will be included in most drug types, while national centralized procurement will be selected on a local basis, and central-local interaction will have a greater impact on the market.
Since the implementation of the 4 7 drug collection in 2018, the decline in drug prices has exceeded market expectations. However, due to the relatively small number of categories collected by the state, most drugs can still be left alone. Even if all the varieties that have passed the generic drug consistency evaluation are included in 2020, they are still only a few. For the National Health Insurance Administration, it is impossible to spend so much energy to include all drugs in the collection or negotiation. It must focus on the large and expensive varieties in the country. The "Measures" also emphasized that "priority should be given to including varieties such as the price of original research drugs higher than that of major countries and surrounding regions in the world, the large price difference between original research drugs and generic drugs, and essential drugs that have passed the consistency evaluation of generic drug quality and efficacy into the scope of centralized procurement".
In addition to the national collection of varieties, a large number of unevaluated varieties and exclusive varieties of how to carry out the collection, the central government will temporarily hand over this part to the local to deal. The "measures" put forward that "for drugs that are not included in the scope of centralized procurement and use by national organizations, all localities should rely on the provincial centralized drug procurement platform, learn from the experience of centralized drug procurement and use organized by the state, and adopt individual or cross-regional alliances to strengthen reform and innovation in the scope of drug procurement, shortlisted standards, and centralized procurement forms, so as to form a work pattern of mutual promotion between the state and local governments. Encourage the exploration of group procurement, joint procurement of Junior College hospitals, and medical consortium procurement to form reasonable prices, and encourage the active participation of non-public medical institutions and social pharmacies to jointly promote the formation of a market-led drug price formation mechanism".
There are three meanings here. The first layer is that the local centralized procurement mainly relies on the provincial centralized procurement platform. No matter what form the future centralized procurement takes, it will be relatively clear that it will eventually be completed on the provincial platform. The second level is to learn from the experience of the national collection, encourage local innovation, the formation of central and local linkage. Local innovation can take many forms, whether it is a single province or a cross-regional alliance, whether it is the scope of drug selection or the form of centralized procurement, can be explored, if the local practice is better, the central government can also learn from it in the future, which means that local practice in the future will not be limited to the form of the state. The third layer is the medical institutions themselves organized to participate in the collection, although the current national and local collection are based on the premise of hospital usage for price, but still passive participation. It is hoped that by promoting medical institutions to organize their own groups to participate in the collection to form a mode of joint price pressure between the payer and the service side, and finally form a drug price closer to market-oriented pricing.
Central-local linkage is not only limited to centralized procurement, but more importantly, the implementation of health insurance payment prices. The "Measures" clarified that "on the basis of considering the quality and efficacy of drugs, starting from the centralized procurement and use of drugs and negotiating drugs organized by the state, the medical insurance payment standards for drugs in the medical insurance catalog shall be formulated according to the generic name, and a dynamic adjustment mechanism shall be established". Collection is only a means of drug price control, the core is to form the medical insurance payment price through collection, so as to promote the formation mechanism of drug price more reasonable.
And on July 22, the National Health Insurance Administration issued the "Opinions on Establishing a Management System for a List of Medical Security Benefits (Draft for Comments)", "Each co-ordinating region may, in accordance with national regulations, formulate medical insurance payment standards for drugs, medical service items and facilities, as well as medical insurance payment standards adapted to various payment methods. Where the state formulates payment standards uniformly, they shall be implemented in accordance with national regulations." This means that the medical insurance payment standard will be mainly formulated by the provinces themselves in the future, but if the state has formulated a unified standard, it must be determined according to the national standard.
Judging from the joint procurement in some regions that has been carried out, the price generated by the linkage of several provinces may also become the common medical insurance payment standard in some regions. In this process, the National Medical Insurance Bureau and various regions form a linkage, especially in the case of rapid release of some drugs, the National Medical Insurance Bureau can enter the market at any time to carry out national collection. Supported by the collection of calendar year data, the volume-for-price model will drive the collection of drugs down the ladder. In the process of central-local linkage, due to the annual renewal of national collection and the annual renewal of local collection, drug prices not only face a year-on-year step-by-step decline in the country, but also face a similar situation in the local area. In this case, most types of drugs will be under pressure, which means that the overall challenge of the drug market is really coming.
Of course, the expansion of centralized procurement still needs all kinds of tools to ensure that the centralized procurement from the central to the local level can ultimately succeed.
With the penetration of centralized procurement from the national level to the local level, there will be more innovative models of centralized procurement in the future. The linkage between the central and local governments will not only absorb local valuable innovation pilot projects and expand to the whole country, but also drive medical institutions to actively enter centralized procurement and truly participate in the effective control of drug prices. With the reform of multi-level medical insurance payment system, the ultimate goal of the reform will be to change the economic power of doctors.