Liuzhou, China Pioneers Hospital Prescription Extension Pilot Program

According to the Liuzhou Municipal Health and Family Planning Commission in Guangxi, starting from August 1, five major municipal hospitals in Liuzhou will pilot the extension of hospital prescriptions outside the hospital, allowing patients to purchase medications at pharmacies after receiving medical consultations at these hospitals.

Currently, Liuzhou City has already implemented this in five major municipal hospitals:People's Hospital, Workers' Hospital, Liutie Central Hospital, Traditional Chinese Medicine Hospital, Maternal and Child Health Care Hospital, launched a pilot program for prescription outflow. Physicians at these five hospitals can issue outpatient prescriptions for oral medications, and through the tiered diagnosis and treatment platform, patients may choose to obtain their medications at the hospitalPharmacyPatients may also choose to pick up their medications at off-site community pharmacies.

Currently, Guizhong Pharmacy has been integrated among social pharmacies, while other social pharmacies are undergoing technical preparations for integration. In accordance with regulations, social pharmacies must dispense medications based on prescriptions, and their prices must not exceed the winning bid prices or the sales prices at hospitals. The next step involves gradually expanding access to other categories of pharmaceuticals.

Hu Guowei, Chief of the System Reform Division of the Liuzhou Municipal Health and Family Planning Commission, stated that in the past, under the “drug-revenue-dependent” model, public hospitals in Liuzhou, like their counterparts across China, were reluctant to allow prescriptions to be filled outside the hospital. However, since Liuzhou abolished drug markups in public hospitals on October 8, 2015, the external environment has changed. The mechanism of subsidizing medical services with drug profits has been gradually dismantled, and hospital drugs are now sold at zero markup. Consequently, hospitals have reversed their traditional stance against external prescription dispensing and are actively and willingly participating in the pilot program.

In June, the Liuzhou New Rural Cooperative Medical Scheme (NRCMS) Management Center issued a document clarifying that participants in the NRCMS in Liuzhou may, after receiving treatment at an NRCMS-designated medical institution, voluntarily choose to either obtain medications at the outpatient pharmacy of that designated institution or present a prescription (including electronic prescriptions) to fill it at an NRCMS-designated pharmacy that provides outpatient pharmaceutical services.

The scope of outpatient pharmaceutical services provided by designated pharmacies under the New Rural Cooperative Medical Scheme (NRCMS) is limited to oral dosage forms, topical dosage forms, aerosols, nebulizer solutions, inhalation solutions, and other similar formulations. Injectable dosage forms are restricted to insulin products. Adjustments and improvements will be made gradually in the future based on actual operational needs.

So, how can participants in the New Rural Cooperative Medical Scheme (NRCMS) seek medical treatment at hospitals and obtain prescriptions from designated pharmacies? What is the entire process?

Staff at the New Rural Cooperative Medical Scheme (NRCMS) Management Center explained that, first and foremost, outpatient physicians at NRCMS-designated medical institutions must issue outpatient prescriptions in the information system in accordance with the "Prescription Management Measures" and relevant NRCMS requirements. The prescriptions must include complete drug information, such as the generic name, dosage form, specification, and manufacturer.

If a patient presents a prescription issued by a physician at a designated pharmacy under the New Rural Cooperative Medical Scheme (NRCMS), and the licensed pharmacist stationed at the pharmacy, as required, identifies any of the following discrepancies or violations: inconsistency between the patient’s name on the prescription and that on the NRCMS enrollment certificate (card), contraindications due to incompatible drug combinations, off-label use, excessive dosage, absence of the prescribing physician’s name, or any other breach of prescription management regulations, the prescription shall be returned. The medication may only be dispensed and sold after the prescribing physician has made the necessary corrections.

Enrollees may purchase medications at designated New Rural Cooperative Medical Scheme (NRCMS) pharmacies that provide outpatient pharmaceutical services, upon presentation of an outpatient prescription (including electronic prescriptions) issued by a designated NRCMS medical institution. The reimbursement benefits shall be consistent with the outpatient medication reimbursement standards of the medical institution where the care was received.

This year, when the State Council issued the key tasks for healthcare reform in 2016, it mentioned granting patients the autonomy to purchase medications, allowing them to choose whether to fill their prescriptions at hospital pharmacies or retail pharmacies.

On July 25, the National Development and Reform Commission (NDRC) released the “Plan for Division of Responsibilities among Relevant Departments on Key Tasks under the Guiding Opinions on Promoting the Healthy Development of the Pharmaceutical Industry,” reiterating its encouragement for healthcare institutions to extend prescriptions beyond their facilities. The plan requires healthcare institutions to prescribe medications by their generic names, proactively provide prescriptions to patients, and safeguard patients’ right to choose where to purchase their medications.

To be honest, when reviewing these policies, Mr. Situ was highly optimistic about them. With the separation of prescribing from dispensing and patients purchasing medications on their own, a significant portion of the market is expected to shift toward retail pharmacies. It is well known that the pharmaceutical retail sector operates as a fully competitive market; with such competition, will drug prices become more affordable? Of course, the author also has genuine concerns regarding policy implementation. After all, consultation fees are only a few yuan; if hospitals and physicians cannot generate profits from medication sales, how will they sustain their operations? In short, while the prospects are promising, practical implementation is likely to be challenging.

However, the approach taken by Liuzhou City demonstrates the feasibility of policy implementation. By establishing a platform and designating specific pharmacies (with other pharmacies to be gradually included in the future), it has finally taken a critical step forward.

The underlying reasons, in addition to policy incentives, include the zero-markup drug sales policy as highlighted in the aforementioned report. To facilitate implementation, the government has also coordinated policy measures; for instance, changing the medical insurance eligibility from an approval-based system to a filing-based system has significantly lowered entry barriers and provided pharmacies with adequate preparation time.

Beyond Liuzhou, Beijing has recently been sending strong signals as well, seeking pathways for out-of-hospital prescription drug sales. China has always adopted a pilot-first approach; when pilots are scaled up, there is experience to draw upon. At present, the out-of-hospital sale of prescription drugs has begun to take effect. With Liuzhou taking the lead, it is likely that other regions will follow suit in the near future.

So, how will the pharmaceutical market change once this trend becomes widespread?

1. The market for most pharmaceuticals will gradually shift toward pharmacies, primary care institutions, and community hospitals.

A few days ago, Cyblue shared with readers a speech by Zheng Hong, former Director of the Department of Drug Policy and Regulation under the National Health and Family Planning Commission. One of the key points emphasized in his speech was that outpatient pharmacies in large hospitals will gradually be scaled back, with their functions shifting to primary care institutions, community hospitals, and social pharmacies.

Based on the practices implemented in Liuzhou, certain oral prescription drugs will be among the first to be included in the pilot program. The New Rural Cooperative Medical Scheme (NRCMS) has also expanded coverage to include oral formulations, topical formulations, aerosols, nebulizer solutions, and inhalation solutions, while injectable formulations are restricted to insulin products only. Careful consideration should be given to determining which categories are deregulated first. Situ Jun believes this approach offers valuable insights. If your product is primarily prescribed in outpatient settings and falls within the aforementioned categories, it is advisable to proactively establish a presence in the out-of-hospital market.

2. What about the price?

For generic drugs, future competition will become increasingly market-driven. First, regarding hospital procurement, these medications are subject to direct online listing and procurement, with prices determined through negotiation. This trend is even more pronounced when prescriptions are filled at retail pharmacies.

Patented drugs, along with medicines accounting for 80% of the total procurement amount and 20% of product specifications (approximately 200–300 varieties), are subject to separate price negotiations and tender-based procurement decisions. Pricing in these categories will be largely determined by the tendering and procurement outcomes. From a marketing perspective, early strategic planning is essential for academic promotion and channel restructuring.

Source:Nanguo Today