CPPCC Standing Committee Member and MicroPort Medical Chairman Chang Zhaohua Proposes Halting Centralized Volume-Based Procurement Pilot for High-Value Medical Consumables

Shanghai Securities News, China Securities Network: Chang Zhaohua, Standing Committee Member of the National Committee of the Chinese People's Political Consultative Conference, Vice Chairman of the All-China Federation of Industry and Commerce, and Chairman and CEO of Shanghai MicroPort Medical (Group) Co., Ltd., suggested during this year's "Two Sessions" to suspend the pilot program for centralized volume-based procurement of high-value medical consumables, summarize experiences nationwide, and improve work methods.

Chang Zhaohua stated that the COVID-19 pandemic has had a significant impact on the high-end medical device industry. As most surgeries involving high-value consumables are elective procedures, medical institutions across various regions were unable to conduct these surgeries normally, leading to a substantial decline in product sales. According to statistics from the “Monthly Report on Economic Operation of China’s Pharmaceutical Industry” by the China Academy of Industrial Research, the total losses in the pharmaceutical industry from January to March 2020 amounted to nearly RMB 10 billion.

“Thanks to the efforts of the government and enterprises, the high-end medical device industry is gradually recovering; however, the pilot volume-based procurement (VBP) programs for high-value consumables implemented across various regions are posing challenges to the industry’s recovery and further development,” said Chang Zhaohua. He pointed out that issues such as the lack of a unified product quality evaluation system and redundant procurement practices in different localities are problems in the current VBP for high-value consumables that cannot be overlooked. The development and innovation of China’s high-end medical devices still require strong national support. To this end, he put forward the following recommendations:

First, suspend the pilot program for centralized volume-based procurement of high-value medical consumables, and carefully evaluate the outcomes, issues, and pros and cons of various measures implemented in the existing pilots. Actively summarize lessons learned, and from the strategic perspective of promoting and developing China’s high-end medical device industry, prioritize top-level design to re-plan the pathway, approaches, and methodologies for the “pilot” initiatives.

Second, establish and improve the evaluation system for the quality consistency of high-value consumable products, laying a scientific foundation for volume-based procurement. Comprehensively consider indicators such as enterprises’ quality system certification qualifications; for enterprises or products that can provide evidence of such certifications, grant support in the form of corresponding rules or assessment points to differentiate among various quality tiers, thereby ensuring the scientific rigor and rationality of the selection process and achieving volume-based procurement that accounts for both quantity and quality.

Third, for product categories already subject to volume-based procurement (VBP), no redundant cross-regional or cross-alliance VBP will be conducted. Based on an evaluation of the results from pilot regions, a nationwide coordination mechanism for high-value medical consumables can be gradually established, including the implementation of supporting measures such as subsequent medical insurance payment standards. This approach aims to guide clinical practice toward proactively seeking and utilizing products with the optimal cost-effectiveness ratio, thereby avoiding the vicious competition of a “price war” resulting from repetitive volume-based procurement.

Fourth, directly address the important guiding role of medical insurance policies on industry development, prudently and orderly advance volume-based procurement of high-value consumables, and support the healthy development of innovative domestically produced high-end medical industries.