13-Provincial Alliance Announces Results of Guidewire Centralized Procurement with Maximum Price Cut of 77%

Alliance volume-based procurement has become the norm. Amid the expansion of centralized procurement categories, high-value medical consumables are forming a new pricing landscape. Both national and subsequent local centralized procurements demonstrate that in volume-based procurement, the rules are not dictated by individual manufacturers, and non-participation may result in the loss of a larger market share.

Based on the current top-level policy documents issued by the national government regarding the centralized procurement of medical consumables, more product categories will be incorporated into the centralized procurement program in the next phase, covering a broader scope, and many products will experience significant price reductions.

Winning Bidders Announced: Medtronic, Abbott, Lepu Medical...

Recently, the Inner Mongolia Healthcare Security Administration issued an announcement disclosing the winning results of the centralized volume-based procurement for coronary guide wires across the "Eight Provinces and Two Regions" alliance. A total of 13 companies were selected, including Medtronic, Abbott, and Lepu Medical, among others.

According to the document, the current content is primarily conducted in accordance with the 《Announcement of the Inter-Provincial Alliance Procurement Office on the Release of the Centralized Volume-Based Procurement Document for Coronary Guidewires (SJLM-14-HC2021-1)》 (hereinafter referred to as the 《Announcement》).

The "Announcement" indicates that this centralized procurement is organized by the Healthcare Security Administration of the Inner Mongolia Autonomous Region, which, entrusted by the healthcare security administrations of Shanxi, Liaoning, Jilin, Heilongjiang, Hainan, Guizhou, Tibet, Gansu, Qinghai, Ningxia Hui Autonomous Region, Xinjiang Uygur Autonomous Region, and the Xinjiang Production and Construction Corps, established the Inter-Provincial Alliance Procurement Office for the Centralized Volume-Based Procurement of Coronary Guide Wires Organized by the "Eight Provinces and Two Regions" and Other Provinces (hereinafter referred to as the "Inter-Provincial Alliance Procurement Office"), to organize the centralized volume-based procurement of coronary guide wires and be responsible for its specific implementation.

According to CBBlue, the product subject to this volume-based procurement is coronary guiding wires, classified under codes starting with C020221 in the National Healthcare Security Administration’s medical insurance medical consumables classification and coding system. The intended procurement volume is determined based on the total procurement demand reported by medical institutions in the alliance regions. Specifically, the total intended procurement volume for the first year is 362,422 units, calculated by aggregating 80% of the total procurement demand submitted by each medical institution within the alliance regions.

Among them, shortlisted enterprises meeting the following condition shall be granted the proposed winning status for this group: the declared price is less than 720.00 RMB/piece.

Less than a month after the release of the 《Announcement》, the bid-opening results for this volume-based procurement were announced.

On July 18, according to the Xiaoxiang Morning Post, an inter-provincial alliance composed of Heilongjiang, Inner Mongolia, Shanxi, Liaoning, Jilin, Hainan, Guizhou, Tibet, Gansu, Qinghai, Ningxia, Xinjiang, and the Xinjiang Production and Construction Corps organized the centralized volume-based procurement of coronary guidewires. According to the bid opening results, the average price of the proposed winning coronary guidewire products dropped from 1,510.16 yuan to 590.58 yuan, representing an average reduction of 60.89% and a maximum reduction of 77.29%.

According to the rules of this centralized volume-based procurement, the proposed winning products have been determined, including products from 13 companies (7 offering imported products and 6 offering China-produced products), encompassing 985 specifications under 44 registration certificates.

It is reported that the guide wires required for coronary intervention procedures in cardiovascular patients are relatively expensive. Following the implementation of the selected procurement results, the financial burden of medical costs for patients will be further reduced, while meeting the clinical needs of medical institutions.

An official from the Hainan Provincial Healthcare Security Administration stated that a total of 19 medical institutions in Hainan Province participated in this centralized volume-based procurement. Moving forward, Hainan Province will further optimize the procurement platform listing, contract signing, purchasing, clinical utilization, payment settlement, and reimbursement processes for the selected products.

Centralized Procurement Expansion: Key Focus on These Products

National policy documents have clearly stated that the centralized procurement policy will be explored and improved, its coverage gradually expanded, prices for high-value medical consumables guided back to reasonable levels, patients' financial burdens alleviated, transaction costs for enterprises reduced, the distribution environment cleaned up, medical institutions guided to standardize usage, and the public better ensured access to necessary medical care.

Following this logic, as coronary stents were the first medical consumables selected for nationwide volume-based procurement, the prices of certain high-value consumables clinically associated with them will inevitably be affected by centralized procurement, with guidewires being a prime example. As centralized procurement is comprehensively rolled out, an increasing number of clinically proven and market-mature products will be successively incorporated into the program.

Chen Jinfu, Deputy Director of the National Healthcare Security Administration, once publicly stated: "Volume-based procurement of medical consumables is a new area for the next round of reform."

“In the field of high-value medical consumables, we will continue and even appropriately accelerate the pace of reform to fully unleash the institutional effects, while also standardizing industry practices, regulating the distribution ecosystem, and ensuring that high-quality development is fully realized in the medical consumables sector,” said Chen Jinfu.

《Notice on Conducting Rapid Data Collection and Price Monitoring for the Second Centralized Procurement of High-Value Medical Consumables》, an official document, states that a decision has been made to conduct rapid data collection and price monitoring for the centralized procurement data of the second batch of medical consumables, covering six major categories: artificial hip joints, artificial knee joints, defibrillators, occluders, orthopedic materials, and surgical staplers. Currently, the national centralized procurement for artificial joints has been officially launched.

Yang Jianlong, Director of the China Association of Medical Equipment, stated: “Local explorations in volume-based procurement have accumulated valuable experience for national centralized procurement. Although national policy documents have not yet made this explicit, observations indicate that future product grouping will be divided into large and small groups. Enterprises with a larger market share will be placed in the large group, while those below a set threshold will be assigned to the small group. Generally, the elimination rate for the small group is relatively high, whereas the large group has a lower elimination rate. Moreover, the large group is allocated larger procurement volumes, while the small group receives smaller allocations, which places relatively greater pressure on enterprises in the small group.”

Yu Baorong, Professor at the School of Insurance, University of International Business and Economics, and Executive Deputy Director of the Research Center for Health Insurance and Health Economics, stated that the following medical consumables are most likely to be subject to centralized volume-based procurement:

For high-value medical consumables characterized by large clinical usage, high procurement expenditure, mature clinical applications, sufficient market competition, and a high degree of homogeneity, trading volume for price has become an irreversible trend.

Attached 《Award Results of the Inter-Provincial Alliance Centralized Volume-Based Procurement for Coronary Guide Wires》