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Centralized procurement takes off—high-value medical devices may soon carry low-price labels.
In accordance with the requirements of six departments, including the Ministry of Health, high-value medical consumables such as vascular intervention devices
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Starting this year, imported stents—whose tariffs have been cut by half—may begin to see actual price reductions. However, it will be centralized bidding that truly brings down the prices of stents, which have long been “light-years away” from affordable levels.
After 30 rounds of price reductions for pharmaceuticals, high-priced medical devices—once considered untouchable—have finally come under the spotlight of price regulation. The first to be affected will be high-value medical consumables, including stents. Recently, according to news from the Ministry of Health, six departments—including the Ministry—have jointly issued the “Guidelines for Centralized Procurement of High-Value Medical Consumables (Trial)” (hereinafter referred to as the “Guidelines”).
Eight years of pilot programs have honed the powerful tool of tendering.
The draft “Guidelines for Centralized Procurement of High-Value Medical Consumables” only began soliciting comments last September. However, according to the Ministry of Health, as early as August 2004, the ministry had already organized a pilot program involving centralized procurement of three categories of high-value medical consumables—cardiac intervention devices, artificial joints, and cardiac pacemakers—from tertiary medical institutions in eight provinces and cities, including Beijing.
Thanks to the significant price reduction effect, building on the pilot program conducted in eight provinces and cities from 2008 to 2009, the Center for International Cooperation and Exchange of the Ministry of Health was also entrusted with carrying out two rounds of centralized procurement for selected high-value medical consumables nationwide. In 2010, a supplementary procurement of new products was also conducted.
Before the issuance of the “Regulations,” many provinces (autonomous regions and municipalities)—including Sichuan, Ningxia, Jiangsu, Hubei, and Zhejiang—had already launched centralized procurement of certain high-value medical consumables at the provincial level, tailored to their local conditions.
In accordance with the requirements of six departments, including the Ministry of Health, high-value medical consumables such as vascular intervention devices, non-vascular intervention devices, orthopedic implants, neurosurgical instruments, electrophysiological devices, pacemakers, extracorporeal circulation and blood purification equipment, and ophthalmic materials will all be included in the scope of centralized bidding and procurement. Meanwhile, all public and non-profit medical institutions at the county level and above are required to participate fully in this centralized procurement.
The intention is to reduce unreasonable costs in the circulation process.
“Before 2004, the procurement of high-value medical consumables across various regions suffered from issues such as low concentration, high procurement prices, significant price disparities among regions, heavy burdens on enterprises, frequent occurrences of improper practices in buying and selling, and irregular conduct by intermediary agencies.” This is an officially acknowledged fact.
However, even after 2004, allegations of bribery involving multinational medical device companies in China have continued to surface from time to time.
In an interview with reporters, Cai Tianzhi of the China Chamber of Commerce for Import and Export of Medicines and Health Products frankly admitted that for imported medical devices to truly see price reductions, marketing expenses must be cut. In his view, overt or covert markups at intermediate stages have become a major factor driving up the prices of certain high-value medical equipment.
As evident from the “Regulations,” the centralized procurement of high-value medical consumables will draw on the model used for centralized drug procurement—implementing three unifications: unified organization, unified platform, and unified supervision. At the same time, the leading body, management body, working body, and supervisory body responsible for centralized drug procurement will also remain unchanged.
Tao Duchen, president of the Shenzhen Medical Device Industry Association, told a Nanfang Daily reporter that the centralized procurement of high-value consumables represents a significant step forward. In his view, the issue of high and highly variable profit margins in the circulation of high-value medical devices has reached a critical stage where regulation is urgently needed. Tao Duchen pointed out that after the issuance of the “Regulations,” many medical device companies will have to transform their original “one-to-one” (company-to-hospital) sales model.
However, some medical device companies operating in China remain cautious about the impact of the new regulations. Some multinational corporations even openly admit: “It remains to be seen whether the ‘sunshine’ bidding and procurement processes across different regions are truly transparent, and it’s still uncertain how exactly each province will carry out its procurement.”
According to industry insiders, in 2006, relevant authorities had already attempted to curb the prices of high-value medical devices by setting limits on markup rates and maximum markup amounts, aiming to reduce the prices of certain high-value medical consumables. At that time, they publicly released a draft document titled "Opinions on Strengthening Price Monitoring and Management of Implantable (and Interventional) Medical Devices (Draft for Comments)." However, this policy ultimately remained unimplemented. Furthermore, the National Development and Reform Commission once tried to introduce the "Provisional Measures for Managing Markup Rates and Monitoring Purchase and Sales Prices in the Circulation Link of Implantable (and Interventional) Medical Devices" (hereinafter referred to as the "Measures"). Yet, as of now, these "Measures" have not been publicly enforced.
Chen Qiulin, an assistant researcher at the Institute of Population and Labor Economics of the Chinese Academy of Social Sciences, publicly wrote: “The fundamental purpose of centralized bidding for high-value medical consumables is to reduce their costs, thereby lowering overall healthcare expenses. However, if the ‘using drugs to subsidize medical care’ mechanism cannot be eliminated, this goal will remain difficult to achieve.”
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For a long time, the industry has been saying that the prices of cardiac stents are artificially inflated and that profits exceed those from drug trafficking.
According to statistics, in 2011, the number of cases undergoing intervention with stents in China was 330,000. On average, each percutaneous coronary intervention (PCI) procedure used 1.7 stent systems, bringing the total annual use of stent systems to 560,000 sets.
Previously, Hu Dayi, Chairman of the Cardiovascular Disease Branch of the Chinese Medical Association, released a set of data. The Journal of the American Medical Association (JAMA) published an analysis report on more than 500,000 coronary intervention (stent) procedures performed in the U.S. from 2009 to 2010: 71.1% were for acute coronary syndromes, and 28.9% were for stable coronary artery disease. Among patients with acute coronary disease, 99% received stent treatments that conformed to established guidelines and were appropriately administered; however, among patients with stable coronary artery disease, only 50.4% had their stent treatments applied rationally. In other words, in the U.S., half of the stents implanted in patients with stable coronary artery disease were used inappropriately.
Meanwhile, in China, the overuse of interventional therapies has become a consensus within the domestic medical community. Wang Longde, a member of the Standing Committee of the National People's Congress, deputy director of the Brain Prevention Committee of the Ministry of Health, and an academician of the Chinese Academy of Engineering, provided a set of data: In 2011, among cases screened at national base hospitals with stenosis rates of 70%, the ratio of bypass surgery to interventional stenting was 1:4, whereas in the United States, this ratio was 9:1. The reasons behind this disparity are self-evident.
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