Xiamen Haixi Medical Products Exchange Launches Cross-Regional Joint Procurement for Non-National and Non-Provincial Tendered Pharmaceuticals and Medical Devices with Volume-Price Matching Mechanism

On July 20, the official website of Xiamen Haixi Pharmaceutical Trading Center released a trading announcement. According to the announcement,Commissioned by the Sanming Alliance (the “Sanming Alliance”) for Joint Price-Capped Procurement of Pharmaceuticals and Consumables, and the China Non-Public Medical Institutions Association, Xiamen Haixi Pharmaceutical Trading Center and Northern Pharmaceutical Services Center will innovatively conduct cross-regional joint procurement of pharmaceuticals and medical devices through a trading model characterized by “volume-price alignment, intelligent matching, and transparency and openness.”Medical institutions in cities of the Sanming Alliance, member units of the China Non-Public Medical Institutions Association, other medical institutions, pharmaceutical/medical device distributors, and pharmacies may take the lead in registering at www.hxmec.com to participate in procurement. Suppliers of pharmaceuticals and medical devices may also register their products on this platform.

It is understood that medical institutions in the Sanming Alliance cities will take the lead in launching cross-regional joint procurement for pharmaceutical and medical device products not covered by national and provincial volume-based procurement programs (referred to as “National Procurement” and “Provincial Procurement”). Meanwhile, other non-public medical institutions and pharmacies will provide end-to-end services for joint procurement transactions and settlements across all product categories, under the guidance of relevant national policies.

Reporters learned from the Xiamen Haixi Pharmaceutical Trading Center that,The so-called “volume-price alignment and intelligent matching” is primarily reflected in the dynamic adjustment of transaction prices based on factors such as procurement volume and settlement payment terms. After both supply and demand parties submit their transaction proposals, the platform will match the optimal suppliers and buyers with the best volume-price alignment according to the principle of “lowest price for equivalent quality,” thereby facilitating transactions.

Specifically: First, purchasers may declare their intended procurement quantity, target price, and settlement payment methods based on their own procurement needs, and set a validity period for these procurement requirements. Within the validity period, the platform can aggregate identical procurement demands from different buyers to achieve lower transaction prices. Meanwhile, in addition to the base product quote, suppliers may also submit multi-tiered volume discount prices and set corresponding discounts based on different payment collection timelines. The platform will intelligently match the trading proposals of both supply and demand parties to facilitate transactions.

Furthermore,The platform has established a data engine for intelligent analysis and matching to ensure maximum efficiency and effectiveness of transactions.Once the transaction volume, transaction price, and settlement and payment terms are determined, the supply and demand parties, along with the distributor, will sign relevant agreements to complete the procurement; however, the transaction price will not be disclosed publicly.

In addition to innovating transaction methods, the platform will establish mechanisms such as security deposits, letters of guarantee, and product quality liability insurance to safeguard the rights and interests of all parties. The announcement indicates that the platform collaborates with financial institutions to jointly provide financial services based on settlement and payment guarantees for both supply and demand sides as well as distributors.

Industry experts believe that, compared with the volume-based procurement approach organized by drug variety, this joint procurement model is market-driven, flexible, open, and transparent. It offers more diverse transaction options for both supply and demand sides, serving as a complement and extension to government centralized procurement. This approach will help establish a more scientific and reasonable drug price formation mechanism on a broader scale, thereby enhancing the overall welfare of all participating parties.

Sanming, Fujian Province, is the “pioneer” of China’s national healthcare reform. The Chinese government is vigorously promoting the Sanming healthcare reform model nationwide and actively deploying specific arrangements for localities to study and implement it. On July 6, the Secretariat of the State Council Leading Group on Healthcare Reform and the National Health Commission held a press conference in Sanming City to introduce and promote the Sanming healthcare reform experience across China. The press conference emphasized strengthening supervision and assessment, revealing that the Secretariat of the State Council Leading Group on Healthcare Reform is developing an evaluation indicator system for promoting the Sanming healthcare reform model. Key indicators will be selected to regularly evaluate each province’s progress and achievements, with the results reported to local party committees and governments.

The coordinated reform of healthcare, health insurance, and pharmaceuticals prioritizes medication management. Reducing drug prices through volume-based procurement is a key step in the “vacating the cage to change the bird” strategy of the Sanming medical reform. The General Office of the State Council issued the “Opinions on Promoting the Normalization and Institutionalization of Centralized Volume-Based Drug Procurement,” pointing out the need to promote the normalized and institutionalized implementation of centralized volume-based drug procurement and improve the working mechanism characterized by government organization, alliance-based procurement, and platform-based operations. The “Opinions on Further Deepening the Reform of the Medical and Healthcare System” issued by the Fujian Provincial Committee of the Communist Party of China and the People’s Government of Fujian Province explicitly stated that the procurement and usage mechanisms for drugs and consumables should be optimized, a normalized mechanism for the centralized volume-based procurement and use of drugs and consumables should be established and improved, and regional alliance-based procurement should be encouraged. In addition, multiple provinces and municipalities, including Guangdong, Tianjin, and Hebei, have successively issued documents clarifying the need to promote the normalization and institutionalization of centralized volume-based drug procurement.

Notably, the Sanming Alliance, one of the initiators of this joint procurement, is a national alliance for cross-regional, non-administratively affiliated, open and shared joint price-capped procurement of pharmaceuticals and medical consumables (including reagents). It was established under the direct guidance of the former State Council Office for Healthcare Reform and the former National Health and Family Planning Commission. Building on the “Sanming Experience,” the alliance achieves synergies in pharmaceutical and medical consumable procurement among member cities through shared platforms, catalogs, pricing, and resources. Currently, the alliance covers 16 provinces, with its membership comprising 27 prefecture-level cities and 4 national demonstration counties for healthcare reform.

The China Non-Public Medical Institutions Association, which jointly initiated procurement with the Sanming Alliance, is the only national industry association in China dedicated to private healthcare, established with the approval of the State Council. Currently, the Association has nearly 540,000 institutional members, including over 24,000 hospitals, accounting for 67% of the total number of hospitals nationwide. It has become the largest and most influential industry association for medical institutions in China and even globally.

It is understood that the Xiamen Haixi Pharmaceutical Trading Center, which undertook this joint procurement, is a pharmaceutical trading platform specifically designed to support government agencies and medical institutions in procuring drugs and medical consumables. Emerging from the Sanming healthcare reform, the center has provided comprehensive digital support for pharmaceutical reforms extending from Sanming to the entire country, saving participating regions 20%–40% in procurement costs annually. As of June 2021, the center’s platform had served 105 cities across 22 provinces in China.

Approved by the Tianjin Municipal People’s Government and under the unified guidance of the Tianjin Municipal Healthcare Security Administration and the Health Commission, the Northern Pharmaceutical Service Center provides end-to-end services under a consortium procurement model—covering pharmaceuticals and medical consumables—to medical institutions in Tianjin, adhering to the principle of voluntary participation by these institutions. Entrusted by the Tianjin Primary Care Digital Health Community, the Center conducts prescription review, medication guidance, and procurement of pharmaceuticals and medical consumables for 267 primary care medical institutions across the city.

Hao Deming, President of the China Non-Public Medical Institutions Association, stated that with the in-depth advancement of healthcare reform, non-public medical institutions have gained broad space for development, becoming an important component and significant force in China’s healthcare service system. To deeply respond to the “Three-Medical Linkage” reform and further promote the development of non-public medical institutions, we will guide and organize member institutions to participate in cross-regional joint procurement. We will leverage our roles in industry service, self-regulation, rights protection, and guidance to enhance the management standards of non-public medical institutions, thereby serving the deepening of healthcare system reform and sharing its benefits.

“During her recent research visit to Fujian Province, Vice Premier Sun Chunlan emphasized the need to intensify efforts in promoting the experience of Sanming’s healthcare reform. The Sanming Alliance represents one of the core components of this reform, playing a significant role in reducing artificially inflated prices for pharmaceuticals and medical consumables, facilitating the ‘vacating the cage to change the bird’ strategy (i.e., reallocating resources from low-value to high-value services), and advancing the nationwide adoption of Sanming’s healthcare reform model,” said Guo Shiyi, Secretary-General of the Sanming Alliance. He stated that the Alliance would leverage its network to strengthen the dissemination of Sanming’s healthcare reform experience, welcoming participation from provinces, cities, districts, and counties; cross-regional organizations; medical consortia and integrated healthcare delivery systems; medical institutions; as well as pharmaceutical manufacturers and distributors in this innovative cross-regional joint procurement of medicines and medical devices. Together, these stakeholders aim to use pharmaceutical reform as a breakthrough point to advance the coordinated reform of healthcare, health insurance, and pharmaceutical supply (“Three-Medical Linkage”), establish a national alliance-based procurement mechanism, and guide drug prices back to reasonable levels.