Forming a Tight-Knit Alliance and Advancing Regularized Cross-Regional Joint Procurement – The 4th Plenary Meeting of Sanming Procurement Alliance (National) to Be Held

In implementation of the requirement set forth by the State Council’s Leading Group for Healthcare Reform to “encourage localities to join the ‘Sanming Procurement Alliance,’” and themed around “promoting normalized cross-regional joint procurement of pharmaceuticals and medical devices,” the Fourth Joint Conference of the Sanming Procurement Alliance (National) is scheduled to be held in Xiamen, Fujian Province, on December 12, 2021, in a hybrid format combining offline and online participation. At this conference, a cohort of pioneers at the forefront of healthcare reform—those firmly implementing the decisions and arrangements of the CPC Central Committee and the State Council on deepening healthcare reform and learning from the Sanming model—will convene to discuss the development of the Sanming Procurement Alliance (National) and work together to advance normalized cross-regional joint procurement of pharmaceuticals and medical devices.

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 in Fujian Province and Furthering Healthcare System Reform” (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,” announced the convening of the Fourth Joint Conference of the Sanming Procurement Alliance (China), and invited regions across China to join the alliance to build an intelligent pharmaceutical trading platform.

This joint conference is hosted by the Sanming Municipal Healthcare Reform Leading Group, organized by the Sanming Municipal Healthcare Security Administration, and co-organized by entities including Sanming Sanyi Lian Digital Technology Co., Ltd. Relevant leaders from the National Healthcare Security Administration, Fujian Province, and Sanming City, along with representatives from the healthcare security administrations of over 40 prefecture-level cities across 22 provinces—including provincial and municipal member units of the Sanming Procurement Alliance (China)—will attend the joint conference both online and offline.

Sanming Procurement Alliance (National) is a significant achievement of Sanming’s healthcare reform. Since 2015, encouraged and promoted by national ministries and commissions, cities across China have 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 and developed into a nationwide, cross-regional, non-hierarchically affiliated, open, and shared procurement alliance for pharmaceuticals and medical consumables (including reagents, etc.). The alliance operates under the strong support and guidance of the National Healthcare Security Administration, under the correct leadership of the Sanming Municipal Healthcare Reform Leading Group, and with daily management undertaken by the Sanming Municipal Healthcare Security Bureau.

Over the years, relying on the digital platform “Sanming Procurement Alliance (National) Platform,” the Sanming Procurement Alliance (National) has consistently adhered to the operational approach of “unified platform, unified catalog, unified pricing, and unified standards,” promoting cross-regional joint price-capped procurement of pharmaceuticals and medical consumables outside the scope of national and provincial centralized procurement, thereby becoming an important supplementary force to national and provincial centralized procurement.

In 2020, the Sanming Procurement Alliance (China) successfully completed cross-regional centralized volume-based procurement for drugs that had not undergone consistency evaluation. Compared with the original procurement prices of generic drugs in use across all participating cities, the overall average price reduction was 69.52%.

At the initiative of the Sanming Medical Reform Leading Group, the Sanming Procurement Alliance (National) will further strengthen organizational management at this joint conference, improve the market-led drug price formation mechanism and the mechanism for sharing centralized procurement outcomes among member provinces and cities, promote the development of a closely-knit alliance, advance normalized cross-regional joint procurement of drugs and medical consumables, and serve as a beneficial supplement to national and provincial centralized procurement.

As a model for comprehensively deepening healthcare reform, Sanming City began in 2012 by tackling inflated prices in the distribution of pharmaceuticals and medical consumables, thereby creating room for subsequent reforms. Currently, the Sanming Procurement Alliance (China) is further expanding and strengthening its operations to promote the Sanming healthcare reform experience more extensively and in greater depth to additional regions.

As of now, members of the Sanming Procurement Alliance (National) cover 16 provinces, 27 prefecture-level cities, and 4 national healthcare reform demonstration counties across China, serving a population of over 150 million. In accordance with the implementation guidelines issued by the State Council’s Leading Group for Healthcare Reform, the Sanming Procurement Alliance (National) will continue to expand its membership and scope, actively inviting more provinces and municipalities to join. Together, they aim to build an intelligent pharmaceutical trading platform, establish a “hub for healthcare reform innovation,” extensively promote the Sanming healthcare reform experience, and serve as a national benchmark for healthcare reform.

At the initiative of the Sanming Medical Reform Leading Group, the Sanming Procurement Alliance (China) will unveil a new platform at this joint conference. By empowering alliance management and operational systems with digital technologies, the platform aims to achieve intelligent, full-process, online closed-loop transactions for pharmaceuticals and medical consumables. This will help member regions standardize the procurement and use of drugs and consumables, and promote the adaptation of Sanming’s “Teng Long Huan Niao” (cage-emptying bird-swapping) medical reform experience to local conditions.

Meanwhile, the Sanming Procurement Alliance (China) will further achieve interconnectivity with the national and provincial medical insurance information platforms, leverage digital empowerment to accumulate and promote healthcare reform experiences, establish mechanisms for information and outcome sharing, and drive greater success in the comprehensive “three-medical-linkage” reforms in Sanming and its member regions.