Shanghai to play leading role in medicine procurement reform

Memo of understanding signed by the National Healthcare Security Administration and the Shanghai government lays out detailed tasks for the city. 

The National Healthcare Security Administration signed a memorandum of understanding with the Shanghai government on Thursday concerning medicine procurement.

The two parties will cooperate in promoting the management and service capacity of the city’s medicine procurement system to provide preferences for reform of the national system with experiences that can be copied and promoted elsewhere.

The document lays out detailed tasks for Shanghai, including undertaking the task of the national centralized procurement work, enforcing the country’s decision to standardize healthcare information nationwide, ensuring medicine supplies for hospitals and residents, promoting Shanghai’s brand in medicine procurement, building up a system for publishing medicine prices and improving Shanghai’s capability in medicine procurement.

China has unveiled a pilot medicine procurement program to be trialed in 11 major cities, including Shanghai, Beijing, Guangzhou and Shenzhen, to lower drug prices and reduce the cost for patients. The cities account for around a third of the national medicine market.

As a major reform of the current centralized procurement system, the program asks public hospitals in the pilot cities to purchase 60-70 percent of their total annual demand for certain medicines in order to get a lower price, according to Xinhua News Agency.

All the cities have sent representatives to set up a joint procurement office, which can represent public hospitals in these cities in conducting centralized medicine procurement.

Shanghai’s centralized medicine procurement affairs management office, under the city’s healthcare security bureau, is in charge of the daily operation of the joint office.

The joint office has worked out enforcement plans, coordinated medicine enterprises, organized several procurements and made some progress in lowering drug prices.

After the signing of the memorandum, the office is to organize related training on medicine procurement, share data analysis and provide policy support.

The cooperation between the national administration and the Shanghai government is expected to help promote local procurement elsewhere, enhance the country’s comprehensive healthcare security management capacity and explore ways to improve China’s medicine procurement system and build up a market-oriented pricing mechanism to provide residents with high quality medicines at low prices.

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