Medtronic, Johnson & Johnson, Abbott Among 12 Medtech Firms Voluntarily Slash High-Value Consumable Prices by Up to 60%

Medical Network, April 22 – On April 19, the Sichuan Provincial Drug and Medical Device Supervision Center issued the “Notice on Publicizing Updated Reference Price Information for Certain Listed High-Value Medical Consumable Products from 12 Companies Including Medtronic (Shanghai) Management Co., Ltd.” Twelve companies, including Medtronic, Johnson & Johnson, Abbott, and MicroPort, proactively applied to update and lower the minimum reference prices of certain products already listed on the procurement platform.

 

Among them, the listed reference prices for 58 types of high-value consumables were reduced; 48 products without reference prices proactively updated their lowest reference prices, with 11 products experiencing price reductions exceeding 20%.

 

According to the price reduction list, Medtronic’s two products—PTA balloon catheters and spinal internal fixation systems—experienced the largest price cuts, at 62.25% and 60.24%, respectively. The current reference prices, sourced from the Heilongjiang Provincial Drug and Medical Device Procurement Platform, are RMB 20,000 and RMB 30,182.50, respectively. Medtronic proactively updated its lowest reference prices to RMB 7,550 and RMB 12,000, respectively, with these lowest reference prices derived from the Hunan Provincial Drug and Medical Device Procurement Platform.

 

Based on the updated sources for minimum reference prices, 14 provinces across China are involved.

 

 

Alliance for Medical Devices reviewed the notices issued by various provinces in the second half of 2018 regarding enterprises' voluntary applications for price reductions and found that Sichuan Province had the highest number.

 

On December 17, six companies, including LifeTech Scientific (Shenzhen) Co., Ltd., voluntarily applied to the Sichuan Provincial Drug and Medical Device Centralized Procurement Service Center to update and lower the minimum reference prices for some of their listed products.

 

November 29, Shanghai MicroPortMedical Devices(Group) Co., Ltd. and 5 other companiesEnterpriseProactively submitted a written application to the Sichuan Provincial Drug Procurement Center to update and lower the minimum reference price information for certain listed products.

 

October 17, Sichuan Province Drug and Medical Device CentralizedProcurementNotice on the Update of Reference Prices for High-Value Consumables Issued by the Service Center Indicates That Three Companies, Including Abbott Trading (Shanghai) Co., Ltd., Voluntarily Submitted Written Applications to the Sichuan Provincial Drug Procurement Center to Update and Lower the Minimum Reference Prices for Certain Listed Products.

 

On September 26, Bausch & Lomb (Shanghai) Trading Co., Ltd. and nine other enterprises proactively submitted written applications to the Sichuan Provincial Drug Procurement Center to update and lower the minimum reference price information for certain products already listed on the platform.

 

A large number of well-known medical device companies have proactively reduced prices. One reason is that the "Administrative Measures for Centralized Online Listing and Sunshine Procurement of High-Value Medical Consumables in Sichuan Province's Medical Institutions" requires that the newly generated lowest reference price of listed products on other provincial procurement platforms must be submitted in writing to the Sichuan Provincial Drug Procurement Center after the price is announced.

 

Another reason is that, as the online procurement of high-value medical consumables becomes increasingly standardized and the corporate credit system continues to improve, more companies are treating regulations as golden rules and strictly complying with them. For instance, a notable trend has been the year-on-year increase in notices issued by provincial authorities since 2016 regarding medical device manufacturers voluntarily applying for price reductions.

 

It can be seen that listed medical device companies, in particular, are more likely to proactively apply for adjustments to their pricing information. After all, while the suspension of one or several products from online procurement platforms has a minimal impact on overall sales, listed companies must take such matters seriously due to their implications for corporate credibility.