Recently (February 19th), the Sichuan Provincial Medical Insurance Bureau recently issued a notice on the issuance of the "Implementation Plan for Centralized Procurement of Medical Consumables in Sichuan Medical Institutions" (hereinafter referred to as the "Notice").

According to the notice, in order to further standardize the centralized procurement of medical consumables and in vitro diagnostic reagents, the Sichuan Provincial Medical Insurance Bureau has formulated an implementation plan for centralized procurement of medical consumables based on the previously released documents on centralized procurement and reform of consumables.

In the latest procurement plan, the Sichuan Provincial Medical Insurance Bureau has clarified the implementation scope, procurement varieties, price requirements, delivery services, and hospital payments for future volume procurement within the province.

According to the document requirements, the plan will be implemented 30 days from the date of publication and will be valid for 2 years.

The Sichuan Provincial Medical Insurance Bureau stated that it should adhere to the direction of provincial-level centralized procurement, implement classified procurement management of medical consumables, and reduce the inflated prices of medical consumables through platform management and comprehensive monitoring.

In terms of implementation scope, it is required that public medical institutions throughout the province (including military medical and health institutions participating in centralized procurement within the province), designated social medical institutions under medical insurance, and medical institutions be fully included in centralized management. The medical consumables covered by the procurement plan include high value medical consumables, low value medical consumables, and in vitro diagnostic reagents.

According to the classification and coding of medical consumables by the National Medical Security Administration, a centralized procurement catalog for medical consumables in our province has been developed (the catalog will be published separately), prioritizing the use of 10 major categories and 39 subcategories of high-value medical consumables in our province, including vascular intervention, non vascular intervention, orthopedics, neurosurgery, electrophysiology, pacemaker, extracorporeal circulation and blood purification, ophthalmic materials, dentistry, and other (patches, medical polymer materials, ultrasound scalpel heads, etc.), Low value medical consumables, including vacuum blood collection vessels and syringes, are included in the centralized procurement scope of provincial medical consumables for all in vitro diagnostic reagents except for cleaning solutions.

Subsequently, based on clinical needs, the centralized procurement directory will be dynamically adjusted, gradually including all medical consumables required by pharmaceutical institutions in the province into the provincial pharmaceutical equipment procurement platform for procurement.

In the future, the procurement of consumables in Sichuan Province will be mainly divided into three categories, namely quantity based procurement, price linked procurement, and record based procurement.

It is worth noting that in price linkage procurement, the Sichuan Provincial Medical Insurance Bureau has explicitly encouraged companies that have already listed products to actively reduce prices based on the latest lowest reference prices from other provinces, and submit price information to the provincial drug bidding center within 30 days.

If it is not updated and declared in a timely manner, a 10% reduction in the verified actual minimum reference price from other provinces will be used as the linkage reference price; If the enterprise does not confirm, the qualification for the product to be listed on the internet shall be cancelled, and the application for the product to be listed on the internet shall not be accepted within two years from the date of cancellation.

In other words, products that will be listed on provincial platforms in the future must be monitored in a timely manner and the minimum price of the product must be lowered as required. Enterprises that refuse to confirm the "minimum price" rule will be directly disqualified from listing their products.

Not only that, the provincial pharmaceutical equipment procurement platform will also set price alerts for management. The historical highest price, last month's highest price, last month's average purchase price, last month's lowest price, and historical lowest price of online products will be divided into red, orange red, yellow, yellow green, and green intervals. During procurement transactions, pharmaceutical institutions will display the price area in real-time based on the purchase price using the price alert cursor, Medical institutions can refer to warning information to adjust procurement prices.

Once the actual purchase price of the same product is 50% higher than the lowest purchase price in the province in the past 5 years, the Medical Insurance Bureau will urge medical institutions to carry out rectification.

In terms of payment settlement, the plan states that medical institutions, as the first responsible person for payment settlement, share medical consumables procurement, payment, and settlement data with the medical security department through the provincial pharmaceutical equipment procurement platform, and strengthen the integrated supervision of medical procurement, payment settlement, and medical insurance payment.

In fact, as early as mid December 2020, the Sichuan Provincial Medical Insurance Bureau issued a document stating that it would promote the centralized procurement model of "three streams in one" of payment fund flow, order information flow, and goods logistics throughout the province, requiring medical insurance and medical institutions to collect payments within 30 days.

The Sichuan Provincial Medical Bureau also requires that in principle, the distribution of emergency products by pharmaceutical enterprises should not exceed 8 hours, and the distribution of general products should not exceed 48 hours. Delivery should continue on holidays.

Obviously, with the continuous promotion and development of centralized procurement of consumables, the requirements for circulation in centralized procurement have become increasingly high. Under the "three streams in one" policy, the role of suppliers has gradually shifted from "bidding procurement services" to "service bidding procurement". After the value of intermediate links has been weakened, the existing market pattern has also gradually moved towards reshuffle, and the era of high gross profit for distributors is gradually coming to an end.

The previous nationwide promotion of the "two ticket system" has had a certain impact on the marketing model and channel construction of the medical device market. Looking at the current theme of comprehensive centralized procurement, the promotion of the "one vote system" is undoubtedly only a matter of time.

According to industry insiders, the next two years are bound to be a very important watershed in China's medical device industry. For medical device enterprises, how to quickly adapt to their own role transformation and continue to stand firm under the continuous adjustment of policies has become the most worthy issue to consider at this stage

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