Sanming Procurement Alliance (National): Deepening Healthcare Reform Through Digital-Enabled Cross-Regional Medicine and Medical Consumables Procurement
To implement the spirit of the “Implementation Opinions on Deepening the Promotion of Sanming’s Experience and Furthering Healthcare System Reform” (Guo Yi Gai Fa [2021] No. 2) issued by the State Council’s Leading Group for Healthcare Reform, which encourages localities to join the “Sanming Procurement Alliance,” the Fourth Joint Conference of the Sanming Procurement Alliance (National) was successfully held in Xiamen, Fujian Province, on December 12. Centered on the theme “Promoting Normalized Cross-Regional Joint Procurement of Pharmaceuticals and Medical Devices,” representatives from more than 40 cities across 22 provinces, municipalities, and autonomous regions convened to discuss the expansion and upgrading of the Sanming Procurement Alliance (National). They joined hands to advance normalized cross-regional joint procurement of pharmaceuticals and medical devices, leveraging digitalization to further ensure the effective implementation of healthcare reform outcomes across various regions.
On-site of the Fourth Joint Conference of the Sanming Procurement Alliance (China)
Ding Yilei, Director of the Department of Pharmaceutical Price and Procurement Bidding under the National Healthcare Security Administration; Ying Yazhen, Deputy Dean of the National Healthcare Security Research Institute at Capital Medical University; Zhao Kun, Visiting Professor at the Vanke School of Public Health and Health, Tsinghua University; Liu Jiacheng, Deputy Director of the Fujian Provincial Healthcare Security Bureau; Zhan Jifu, Director of the Standing Committee of the Sanming Municipal People’s Congress and Chief Advisor to the Leadership Group of the Sanming Procurement Alliance (China); Zhang Yuanming, Deputy Mayor of the Sanming Municipal People’s Government; Xu Zhiluan, Director of the Sanming Municipal Healthcare Security Bureau; Liao Jieyuan, Chairman of WeDoctor Group; and other leaders and guests attended the joint conference and delivered speeches.
In October 2021, the State Council’s Leading Group for Healthcare Reform issued the “Implementation Opinions on Deepening the Promotion of Sanming City’s Experience to Further Reform the Pharmaceutical and Healthcare System” (Guo Yi Gai Fa [2021] No. 2), explicitly stating that “localities are encouraged to join the ‘Sanming Procurement Alliance.’” On November 26, the Sanming Municipal Leading Group for Healthcare Reform released the “Initiative on Promoting Regularized Cross-Regional Joint Procurement of Pharmaceuticals and Medical Devices,” inviting regions across China to join the Sanming Procurement Alliance (China) and to establish an intelligent trading platform for pharmaceuticals and medical consumables.
Director Ding Yilei, Department of Medical Service Prices and Centralized Procurement, National Healthcare Security Administration
Ding Yilei, Director of the Department of Pharmaceutical Pricing and Tender Procurement under the National Healthcare Security Administration, pointed out in his speech that the Sanming Procurement Alliance (China) is a product of Sanming’s healthcare reform and serves as an important vehicle for promoting the “Sanming experience” nationwide. The Sanming Procurement Alliance (China) aligns with the national centralized drug procurement program in upholding the reform philosophy of putting people and their lives first. By conducting joint procurement of drugs and medical consumables on a broader scale, member entities of the Sanming Procurement Alliance (China) help further reduce artificially inflated prices, standardize procurement and usage practices in public medical institutions, and promote the strategy of “making room for new growth by eliminating waste and optimizing structure,” thereby extending the benefits of Sanming’s healthcare reforms to alliance regions. At this new starting point, all regions are encouraged to actively join the Sanming Procurement Alliance (China).
Visiting Professor Zhao Kun, Vanke School of Public Health and Tsinghua University
Professor Zhao Kun, Visiting Professor at the Vanke School of Public Health and Wellness, Tsinghua University, provided guidance on the market access, monitoring, and evaluation management mechanisms of the Sanming Procurement Alliance (China). An innovative “outcome-based” management approach was adopted for the administration of drug and consumable procurement catalogs, whereby procurement prices are adjusted based on expanding evidence and re-evaluations, thereby ensuring that the procurement of drugs and medical consumables truly aligns with clinical value and optimal pricing.
Liu Jiacheng, Deputy Director of the Fujian Provincial Healthcare Security Administration
Liu Jiacheng, Deputy Director of the Fujian Provincial Healthcare Security Administration, stated in his speech that the Sanming Procurement Alliance (China) serves as both a catalyst for Sanming’s “Three-Medical Linkage” reform and a critical entry point. By focusing on the governance of pharmaceuticals and medical consumables, Sanming has leveraged this “small cut to drive major reform,” playing a significant role in advancing comprehensive healthcare system reform.
Zhan Jifu, Director of the Standing Committee of the Sanming Municipal People's Congress and Chief Advisor to the Leadership Group of the Sanming Procurement Alliance (China)
Zhan Jifu, Chairman of the Standing Committee of the Sanming Municipal People’s Congress and Chief Advisor to the Leadership Group of the Sanming Procurement Alliance (China), stated that the issuance of Document No. 2 [2021] by the National Healthcare Security Administration affirms the status and value of the Sanming Procurement Alliance (China) as a beneficial supplement to national and provincial centralized procurement. The Sanming Procurement Alliance (China) will uphold its mission of “following the Party’s leadership, serving the people, ensuring quality, and eliminating kickbacks,” and leverage the alliance’s platform mechanism to further promote the Sanming healthcare reform experience to member provinces and cities across China.
Document No. 2 [2021] issued by the National Healthcare Security Administration requires that efforts be made to procure more than 300 generic drug names by the end of 2022, and that by the end of the 14th Five-Year Plan period, each province shall have more than 500 generic drug names included in the centralized volume-based procurement organized at the national and provincial levels. As the only nationwide, cross-regional alliance for the procurement of pharmaceuticals and medical consumables recognized and encouraged by the state, the Sanming Procurement Alliance (National) focuses its procurement efforts on market-based purchasing of pharmaceuticals and medical consumables beyond the 500 varieties covered by national and provincial centralized procurement. Relying on the digital “Sanming Procurement Alliance (National) Platform” and adhering to the operational approach of “unified platform, unified catalog, unified pricing, and unified standards,” it serves as an important complementary force to national and provincial centralized volume-based procurement.
As of now, the alliance’s members span 27 prefecture-level cities across 16 provinces and four national healthcare reform demonstration counties in China, covering a population of over 150 million. In 2020, the Sanming Procurement Alliance (National) successfully conducted China’s first cross-regional centralized volume-based procurement for drugs not subject to consistency evaluation. Compared with the original procurement prices of generic drugs in use in all participating cities, the overall average price reduction reached 69.52%.
The Sanming Procurement Alliance (National) is a significant achievement of the Sanming healthcare reform. Since 2015, encouraged and promoted by the General Office of the State Council, cities across China have successively sought to sign agreements with Sanming City to conduct joint price-capped procurement of pharmaceuticals and medical consumables, thereby forming procurement alliances. In March 2016, the Sanming Procurement Alliance (National) was officially established. It has since grown steadily into a nationwide, cross-regional, open, and shared procurement alliance for pharmaceuticals and medical consumables. This alliance has received full affirmation from the Central Committee of the Communist Party of China and the State Council, operates under the strong support of the National Healthcare Reform Leading Group, the National Healthcare Security Administration, and the Fujian Provincial Healthcare Security Administration, and functions under the correct leadership of the Sanming Healthcare Reform Leading Group, with daily management organized by the Sanming Municipal Healthcare Security Bureau. The meeting emphasized that by improving the alliance’s organizational structure and enhancing its sharing mechanisms, the Sanming Procurement Alliance (National) will further expand, strengthen, and solidify its operations, evolving into a more closely integrated alliance.
Zhang Yuanming, Deputy Mayor of Sanming Municipal People's Government
In his address, Zhang Yuanming, Deputy Mayor of the Sanming Municipal People’s Government, stated that the Sanming Procurement Alliance (China) would further strengthen cooperation and ties among its provincial and municipal members, promote information sharing among member cities, build a more closely integrated alliance, and demonstrate new initiatives in alliance-based volume-based procurement. Meanwhile, the alliance will further consolidate and deepen the outcomes and achievements of its procurement efforts, expand and solidify the strength of the Sanming Procurement Alliance (China), better leverage its core value, and ensure that the benefits of healthcare reform reach a broader population.
Xu Zhiluan, Director of the Sanming Municipal Healthcare Security Administration
Xu Zhiluan, Director of the Sanming Municipal Healthcare Security Administration, stated in his address that the Sanming Procurement Alliance (China) will continue to establish an information-sharing mechanism, promote the expansion of the alliance’s scope and membership, actively invite more provinces and municipalities to join, and build a “hub for healthcare reform innovation.” Furthermore, the Sanming Procurement Alliance (China) will strengthen organizational management, improve the market-oriented drug pricing mechanism, standardize the drug supply assurance system, and establish a normalized mechanism for cross-regional joint price-capped centralized procurement of drugs and medical consumables. This will enable intelligent, online closed-loop management covering the entire process of joint procurement, trading, settlement, payment, and supervision for drugs and medical consumables, thereby reducing prices to benefit the public and guiding drug and medical consumable prices back to reasonable levels.
The joint conference also unveiled the new platform of the Sanming Procurement Alliance (China), empowering the alliance’s management and operational systems through digital technologies. On November 21, 2021, the Sanming Municipal Healthcare Security Administration signed a delegated cooperative operation agreement for the Sanming Procurement Alliance (China) with Sanming Sanyilian Digital Technology Co., Ltd., a holding company under WeDoctor Group, and Xiamen Haixi Pharmaceutical Trading Center Co., Ltd. This partnership aims to continuously iterate and upgrade the alliance platform, achieving intelligent, end-to-end operations covering joint procurement, trading, settlement, payment, supply, and regulation.
Liao Jieyuan, Chairman of WeDoctor Group, stated that the Sanming Procurement Alliance (China) will leverage its digital platform to achieve precise volume aggregation, accurate calculation and retention of savings, precise implementation of joint procurement, and targeted pharmaceutical care services. This initiative aims to facilitate the direct, transparent, and secure delivery of medicines from manufacturers to patients, while also driving the economic development of the pharmaceutical industry across various regions.
Liao Jieyuan, Chairman of WeDoctor Group
According to reports, the Sanming Procurement Alliance (China) has accumulated three core experiences in pharmaceutical reform: “procurement based on clinical need,” “one product with two specifications,” and “platform-based settlement.” Procurement based on clinical need involves scientifically and reasonably formulating catalogs according to clinical requirements, thereby cutting off the chain of interests associated with targeted customization, targeted procurement, and targeted distribution. One product with two specifications refers to selecting one manufacturer each from the original research and generic drug quality tiers, thus eliminating kickback chains linked to physicians’ drug selection. Platform-based settlement entails having the medical insurance fund settle and pay for pharmaceutical and medical device invoices through the platform in the following month, which avoids triangular debt and reduces settlement cycles and circulation costs.
Sanming Procurement Alliance (China) – On-site Plaque Awarding Ceremony for Partner Units Implementing Sanming’s Healthcare Reform
To further encourage and support the member provinces and cities of the alliance in achieving tangible results in healthcare reform implementation, a plaque-awarding ceremony for “Sanming Procurement Alliance (China) – Partner Units for Sanming Healthcare Reform Implementation Practice” was held during this joint meeting, with plaques awarded to representatives from selected alliance cities. Meanwhile, the “Signing Ceremony for the Inter-provincial Traditional Chinese Medicine (Herbs) Procurement Alliance Joining the Sanming Procurement Alliance (China)” also took place, marking the formal accession of the Inter-provincial Traditional Chinese Medicine (Herbs) Procurement Alliance to the Sanming Procurement Alliance (China). This development holds significant importance for the expansion and broader coverage of the Sanming Procurement Alliance (China).
Signing Ceremony for the Inter-Provincial Traditional Chinese Medicine (Herbal Materials) Procurement Alliance’s Accession to the Sanming Procurement Alliance (China)
The Sanming Procurement Alliance (China) has always upheld the reform spirit of putting people first and daring to be pioneers, as exemplified by the Sanming healthcare reform. It will continue to promote innovative development in healthcare reform, systematically consolidate reform experiences, drive greater achievements in the comprehensive “three-medical-linkage” reforms in Sanming and its member regions, and ensure the practical realization of the values of “lowering drug prices, improving efficiency, and benefiting the public.”