State Council Promotes Sanming Healthcare Reform Nationwide as 'Sanming Procurement Alliance' Expands with IPO Filing

Recently, Sun Chunlan, Vice Premier of the State Council and Head of the State Council Leading Group for Healthcare Reform, conducted field research in Fujian Province and attended an on-site meeting to advance healthcare reform. She emphasized the need to leverage the exemplary role of Sanming’s healthcare reform model to drive deeper, more substantive progress in healthcare reform in the new era and expand its effectiveness.

It is reported that since 2015, the General Office of the State Council has issued multiple documents calling for the summarization and promotion of the Sanming healthcare reform experience, while encouraging provinces to implement cross-regional joint procurement in light of local conditions.

Following her investigation into Sanming’s healthcare reforms, including drug pricing, hospital management, and the development of medical consortia, Sun Chunlan pointed out that Sanming has taken the adjustment of pharmaceutical catalogs and the reduction of inflated prices for drugs and consumables as its breakthrough point. The city has simultaneously advanced the coordinated reform of medical services, health insurance, and pharmaceuticals (the “Three-Medical Linkage”), innovated compensation distribution and supervisory assessment mechanisms, and promoted the decentralization of resources and the transformation of service delivery models.

In 2016, under the guidance of the State Council’s Office for Healthcare Reform and the National Health and Family Planning Commission, Sanming City, the pioneer in exploring centralized drug procurement, officially established the “Sanming Alliance for Joint Price-Capped Procurement of Drugs and Consumables” (hereinafter referred to as the “Sanming Alliance”). This initiative created a cross-regional joint procurement platform that integrates the entire process of joint procurement, trading, settlement, and supervision, covering procurement services for drugs, consumables (including reagents), and traditional Chinese medicine decoction pieces. As the alliance’s sole official service platform, it was jointly developed by the Haixi Pharmaceutical Trading Center, invested in by WeDoctor, and the Sanming Alliance. The alliance’s membership has expanded to cover 32 counties, 21 cities, and 15 provinces across China.

To date, the Sanming Alliance platform has achieved interconnectivity with the Fujian Provincial Procurement Platform, saving member cities an average of 20%–40% annually on procurement costs for pharmaceuticals and medical consumables. According to media reports, since 2018, the Sanming Healthcare Security Administration has replaced 125 pharmaceutical products whose prices were more than 10% lower than those of the same specifications listed in the procurement catalog, which is expected to save approximately RMB 13 million in annual pharmaceutical expenditures.

Sanming’s successful experience is expanding from Fujian Province to the rest of China. In April this year, the Hebei Provincial Healthcare Reform Office signed an agreement with Sanming City, under which six pilot cities—including Handan—and 28 demonstration counties jointly joined the Sanming Alliance. In July, Handan officially launched the Sanming Alliance platform, taking the lead in achieving intelligent volume aggregation, intelligent price negotiation, automated tendering and procurement, online trading, online settlement, and end-to-end supervision for joint drug procurement. This has enabled fully digitalized, intelligent, and systematic operations across all stages. Furthermore, the Hebei Provincial Healthcare Security Administration signed an agreement with the Haixi Pharmaceutical Trading Center, whereby the latter will build and operate a provincial centralized procurement platform featuring an innovative model for Hebei Province. As a result, the winning bids from the national “4+7” drug centralized procurement program have now been fully implemented in Hebei Province.

On this basis, in early August, the National Healthcare Security Administration issued the “Notice on Arrangements for Expanding the Geographic Scope of the Pilot Program for State-Organized Centralized Drug Procurement and Use,” and multiple provinces began submitting actual procurement data for drugs included in the pilot program.

At the on-site meeting to advance healthcare reform, Sun Chunlan also emphasized the need to expand the scope of the national centralized drug procurement and usage reform, eliminate markups on medical consumables, and reduce artificially inflated drug prices.

(State Council Vice Premier and Head of the State Council Leading Group for Medical Reform, Sun Chunlan, conducts field research at Xicheng Town Health Center in Youxi County, Sanming City) Image source: Fujian Provincial Healthcare Security Administration

Currently, healthcare reform has entered a critical phase requiring concerted efforts to tackle deep-seated issues. It is essential to intensify the promotion of the Sanming healthcare reform model, implement cross-regional joint procurement, and effectively alleviate the financial burden of medical care for urban residents.