China Launches Volume Reporting for the 11th Batch of National Centralized Drug Procurement with Enhanced Flexibility for Healthcare Institutions to Specify Brands

Recently, according to information from the official website of the National Healthcare Security Administration, the National Joint Procurement Office for Organized Drug Purchases issued the "Notice on Organizing Medical Institutions to Report Demand Quantities for Varieties Included in the 11th Round of National Centralized Drug Procurement." The reporting of demand quantities by medical institutions for the 11th round of centralized drug procurement will be conducted from August 6 to 25, covering a total of 55 varieties.

Notably, the current volume-based procurement initiative reserves greater “autonomy” for healthcare institutions.

On the one hand, this volume-based procurement has optimized the volume reporting rules, allowing medical institutions to report volumes by brand.

According to the National Healthcare Security Administration, medical institutions may report demand for each drug by its generic name without distinguishing between manufacturers, or they may specify particular brands, thereby encouraging active participation from companies with high recognition among medical institutions.

Moreover, medical institutions may independently choose to report procurement volumes by product variety or by manufacturer brand based on actual needs, or they may report part of the demand by product variety and part by manufacturer brand. If reporting by manufacturer brand is selected, there is no limit on the number of specific brands.

However, it should be noted that if a brand reported by a medical institution is selected as the winning bidder, that brand will directly become the supplier for the medical institution and must fulfill the corresponding agreed-upon volume. If the brand reported by the medical institution is not selected, the reported volume for that brand will be supplied by the primary supplier designated for the province. Medical institutions should ensure alignment with relevant regulations on drug procurement, such as the “one product, two specifications” rule enforced by competent authorities, and reasonably determine the number of brands to report.

On the other hand, while this initiative requires medical institutions to report volumes truthfully and accurately, special circumstances will also be taken into consideration.

According to information from the National Healthcare Security Administration, medical institutions are, in principle, required to ensure that their annual procurement volume for each product category is no less than 80% of the average usage during the 2023–2024 period. Meanwhile, for cases where anticipated usage is expected to decline significantly due to factors such as a marked reduction in clinical demand or operational adjustments, medical institutions may submit procurement volumes based on actual needs after providing a written explanation.

If a medical institution’s reported volume fails to reach 80% of its average procurement volume over the past two years due to special circumstances—such as volume reporting for specific items in this centralized procurement being restricted to approved indications, or historical procurement volumes being influenced by temporary purchases—the institution is permitted to appropriately reduce its reported volume below the 80% threshold of the two-year average, provided that relevant explanations are submitted concurrently. After submission, medical institutions should monitor the review results; if the submission is not approved, they must promptly contact the local healthcare security administration in their pooling region for resolution.

According to a systematic review, the National Healthcare Security Administration’s policies permit differentiated adjustments based on product-specific circumstances: For products with rising utilization—such as those newly included in the National Reimbursement Drug List or with upgraded recommendation levels in clinical guidelines—hospitals should strive to report procurement volumes that meet or exceed their historical averages. For products experiencing decreased utilization due to factors such as departmental restructuring or temporary usage patterns, reported volumes may be moderately reduced upon provision of adequate justification. Products used exclusively for special-needs medical services, international medical services, and other non-basic medical insurance purposes may be excluded from the current round of volume reporting and monitoring. For medications related to epidemic or seasonal diseases, demand forecasts may be dynamically adjusted in accordance with epidemiological trends.

Furthermore, healthcare institutions also have a certain degree of autonomy in the practical implementation of demand.

According to the National Healthcare Security Administration, under the centralized procurement policy, medical institutions should prioritize the use of selected drugs. Meanwhile, “prioritized use” does not equate to “exclusive use.” The contracted volume for centralized procurement generally accounts for 60%–80% of the quantity reported by medical institutions, with the remaining volume left to the discretion of medical institutions to procure either selected or non-selected drugs.

Based on the implementation of previous rounds of centralized volume-based procurement (VBP), medical institutions have demonstrated a high adoption rate of winning products, generally exceeding 80%. Many medical institutions continue to use VBP-winning drugs even after fulfilling their contracted purchase volumes. This underscores the broad recognition and acceptance of VBP-winning drugs by medical institutions. We encourage medical institutions to continue supporting and utilizing these VBP-winning products.

For certain special circumstances, centralized procurement also includes optimization measures to avoid a "one-size-fits-all" approach. For instance, for drugs under national or provincial key monitoring, or those experiencing significant demand fluctuations due to public health emergencies or changes in the recommendation levels within clinical guidelines, if the agreed-upon purchase volume has not been fully met, it is sufficient for the utilization rate of the winning bid drugs to meet the local requirements, thereby respecting actual clinical prescribing practices.

Appendix: Q&A on the Volume Reporting Policy for Medical Institutions in the 11th National Centralized Drug Procurement

1. Q: How were the eligible brands for volume reporting in this centralized procurement determined?

A: In the initial phase, the Joint Procurement Office for Drugs conducted enterprise information registration. Enterprises that have submitted relevant drug information materials constitute the selection pool for volume reporting by medical institutions this time. Products under these brands are either reference listed drugs or generic drugs that have passed the consistency evaluation of quality and efficacy.

2. Q: Is it mandatory to select specific brands when reporting volumes for this centralized procurement? How many brands can be selected? Must the brands selected for volume reporting be used subsequently?

Answer: Healthcare institutions may independently choose to report procurement volumes by drug generic name or by manufacturer brand based on actual needs, or they may report part of the demand by generic name and part by manufacturer brand. If choosing to report by manufacturer brand, there is no restriction on the number of specific brands reported. However, it should be noted that if a reported manufacturer brand is selected as a winning bidder, that manufacturer will directly become the supplier for the healthcare institution and must fulfill the corresponding contracted volume; if the reported manufacturer brand is not selected as a winning bidder, the reported volume for that brand will be supplied by the primary supplier designated for the province. Healthcare institutions should ensure alignment with relevant regulations on drug formulary management, such as the “one product, two specifications” rule enforced by competent authorities, and reasonably determine the number of manufacturer brands to report.

3. Q: Medical institutions are required to report procurement volumes reaching 80% of their historical purchase volumes. How is this ratio calculated?

A: The volume reporting system will automatically convert the reported demand for each specification by medical institutions into the equivalent quantity of the minimum specification based on active ingredient content, and sum these values to obtain the reported volume for the drug product. Similarly, it will convert the historical procurement volumes for all specifications (including both those that have passed consistency evaluation and those that have not) of the same drug product into the equivalent quantity of the minimum specification based on active ingredient content, and sum these values to obtain the total historical procurement volume for the drug product. It then calculates whether the reported volume reaches 80% of the historical procurement volume. For example, if an oral immediate-release formulation of a drug includes tablets and capsules in 10 mg and 20 mg strengths, and a medical institution’s historical procurement consists of 1,000 tablets of 10 mg, 1,000 tablets of 20 mg, and 1,000 capsules of 10 mg, the total historical procurement volume, when converted based on active ingredient content (where one 20 mg tablet is equivalent to two 10 mg tablets), equals 4,000 tablets of 10 mg. If the institution reports a demand of 2,000 tablets of 10 mg and 800 tablets of 20 mg, the total converted volume equals 3,600 tablets of 10 mg, which exceeds 80% of the historical volume of 4,000 tablets; thus, the reported volume meets the requirement.

4. Q: How should the situation be handled if a medical institution’s reported volume fails to reach 80% of its average procurement volume over the past two years?

A: In special circumstances, such as when volume reporting for certain items in the current centralized procurement is restricted to specific indications, or when historical procurement data of medical institutions includes factors like temporary purchases, medical institutions are permitted to appropriately reduce their reported volumes based on 80% of their average procurement volume over the past two years, and must submit corresponding explanations simultaneously. After submission, medical institutions should monitor the review results; if the submission is not approved, they should promptly contact the healthcare security administration department of the pooling region for resolution.

5. Q: How should volume declarations be submitted for specifications that have not passed the consistency evaluation and for those listed in the National Essential Medicines List?

Answer: The specifications for which procurement volumes can be reported for each product are those that have passed the consistency evaluation of quality and efficacy. For demand corresponding to specifications that have not passed the evaluation, medical institutions generally convert the volume into equivalent amounts based on content strength and include it in the demand for evaluated specifications. If a non-evaluated specification is listed as an essential medicine (already marked in the reporting system), medical institutions may independently determine the conversion ratio based on actual clinical usage. If this results in the total reported volume falling below 80%, the institution may explain in its submission that certain non-evaluated specifications are essential medicines and that part of their procurement volume was not converted. For essential medicine specifications that have passed the evaluation, medical institutions should report volumes as usual. During the implementation phase following the selection of winning bidders, if the contracted winning enterprise cannot supply a particular specification, the medical institution may choose another winning enterprise capable of supplying that specification. There will be no requirement to forcibly substitute essential medicine specifications with other specifications.

6. Q: What special considerations were taken into account in this centralized procurement regarding dosage forms and specifications suitable for children?

A: In this volume-based procurement, some drug varieties have specifications shared by both children and adults. If pediatric-appropriate specifications have not passed the consistency evaluation and medical institutions deem them non-convertible to other specifications, this should be explained in the volume declaration. If pediatric-appropriate specifications have passed the consistency evaluation, normal volume declaration procedures apply. Furthermore, this procurement round will explore appropriate adjustments to the price conversion rules for small-dosage pediatric medications to better incentivize enterprises to supply pediatric-appropriate specifications.

7. Q: Among the 55 drug varieties included in the 11th National Volume-Based Procurement (VBP) program, two varieties had six manufacturers listed in the reported procurement volume roster. However, the previously announced guidelines stated that VBP would be implemented only when there were seven or more qualifying manufacturers. How should this discrepancy be interpreted? Will these two varieties be subsequently included in the scope of VBP?

Answer: This centralized procurement uses a “threshold” of seven entities—combining reference listed drug manufacturers and manufacturers of generic drugs that have passed consistency evaluation—to determine inclusion in the procurement scope. Here, “seven” refers to the number of Marketing Authorization Holders (MAHs) meeting the above criteria, not the number of companies registering to participate in the centralized procurement. Currently, the selection process has been completed, and the specific products have been publicly announced. Inclusion in the 11th round of centralized procurement is a finalized matter and will not be altered based on company registration status. Even if the actual number of bidding companies is fewer than seven, the centralized procurement will proceed as scheduled, with winning bids determined through competition according to established rules. The number of companies shown in the current “volume declaration list” refers to those that have submitted documentation and passed review to date. Medical institutions intending to declare volumes by brand may select companies appearing on this list. It should be noted that some companies have neither submitted documentation nor appeared on the volume declaration list; if they wish to participate in the centralized procurement later, they are permitted to do so under the rules, but they will have missed the window for medical institutions to declare volumes by brand and thus will not benefit from the brand-specific declared volumes.

8. Q: What are the requirements for contracted volumes during the implementation of centralized procurement results? If a medical institution has already fulfilled its contracted procurement volume, is it still required to continue procuring the winning products?

A: First, in accordance with centralized procurement policies, medical institutions should prioritize the use of selected drugs. However, “prioritized use” does not mean “exclusive use.” The contracted volume under centralized procurement generally accounts for 60%–80% of the volume reported by medical institutions, with the remaining volume to be procured at the discretion of the institutions, who may choose either selected or non-selected drugs. Second, based on the implementation of previous rounds of centralized procurement, medical institutions have maintained a high proportion of selected product usage, generally exceeding 80%. Many institutions continue to use selected drugs even after fulfilling their contracted volumes, demonstrating broad recognition of these products among healthcare providers. Medical institutions are encouraged to continue supporting and using drugs selected through centralized procurement. Third, optimized measures are in place for special circumstances to avoid a “one-size-fits-all” approach. For instance, for drugs under national or provincial key monitoring, or those experiencing significant demand fluctuations due to public health emergencies or changes in clinical guideline recommendations, if the contracted volume is not fully met, it is sufficient for the proportion of selected drug usage to meet local requirements, thereby respecting actual clinical prescribing practices.

9. Q: Can private medical institutions and retail pharmacies designated for basic medical insurance participate in the volume declaration for centralized procurement?

Answer: Private medical institutions and retail pharmacies designated under the national health insurance scheme are encouraged to participate in volume-based procurement (VBP) by submitting their purchase volumes, thereby sharing the benefits of VBP reforms. On one hand, participation enables the public to conveniently access high-quality, affordable winning bid medicines at nearby locations; on the other hand, it provides private medical institutions and retail pharmacies with new procurement channels, creating a win-win situation for all parties involved. To encourage active participation, local healthcare security administrations have implemented certain incentive measures. For instance, retail pharmacies or private hospitals that stock a specified range of VBP medicines and scan traceability codes as required are awarded the designation of “VBP Convenience Pharmacy/Hospital.” Additionally, mini-programs for comparing prices among designated pharmacies indicate whether a pharmacy participates in VBP, facilitating consumers’ choice of where to purchase medications.

10. Q: What should new users do if they want to submit volume data but do not have an account? What should existing users do if they have forgotten their username and password?

A: Medical institutions may apply to the healthcare security administration departments in their pooling areas for new account creation, account inquiry, and password reset, in accordance with the volume reporting procedures of their respective provinces.