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wei xiaoning li yun | written by

wang chen | editor

recently, an article about "imported drugs disappearing from hospitals" went viral on social media, sparking discussions from all parties.

the topic of the article is"imported drugs with good efficacy are hard to find in hospitals, and alternative generic drugs have limited efficacy."。 

although there is some controversy in the clinical field regarding the use of azithromycin described in the article, some clinicians said that whether azithromycin is domestically produced or imported, it is resistant to mycoplasma pneumonia, and whether it is imported or not is not that important.

many industry insiders also said that azithromycin itself is an antibiotic with strong drug resistance. but the problem reflected in the article is that since the implementation of national centralized procurement around 2017, doctors and patients have encountered some challenges in their medication habits, medication continuity and compliance in hospitals. "it has caused certain difficulties in changing medications in hospitals," said an industry insider.the inconsistent demands from medical insurance, hospitals and patients also make policy adjustments difficult.

under the background of centralized procurement, since the implementation of the "4+7" pilot program of volume-based procurement in 2018, the national procurement has maintained the frequency of "two procurements a year", one batch each year. currently, the tenth batch of centralized procurement is on the verge of being launched, saving a total of more than 500 billion yuan in medical insurance funds. behind the savings is that the vast number of low-income groups in china can get cheap domestic generic drugs in the fields of hypertension and chronic diseases - this is the most important significance of volume-based procurement, and it is worth persisting.

part of the saved medical insurance funds is still transferred to "imported drugs". according to iqvia statistics, the sales of domestic innovative drugs will increase from 2.1 billion yuan in 2020 to 3.5 billion yuan in 2022, while the sales of imported innovative drugs will increase from 2.3 billion yuan to 4.4 billion yuan. the sales of generic drugs as a whole are continuing to shrink."it's not that all imported drugs have disappeared, but that the structure of imported drugs has changed," said a medical insurance official. 

therefore, volume-based procurement does not mean that generic drugs will completely replace imported drugs. however, under the general direction of volume-based procurement, some details deserve attention:

why are original drugs so hard to find in hospitals?

are generic drugs that have passed the consistency evaluation equivalent to original drugs in terms of efficacy?

how can the diversity of medication used by doctors and the general public, especially the choice to use original drugs, be met?

-01-

disappearing original research drugs: does losing the label mean being withdrawn from the market?

the event is at the center ofpfizerazithromycin "zithromax" is a drug that was not selected in the centralized procurement. in november 2023, in the national centralized volume procurement, zithromax was quoted at 5.58 yuan per bag, about 4.7 times higher than the last selected drug of 0.98 yuan per bag, and was ultimately not selected.

according to data from the national medical insurance administration, 1,583 domestic generic drugs were selected in the first nine batches of centralized procurement, and 70 imported original drugs were selected, with generic drugs accounting for more than 95%. in centralized procurement, it is common for original drugs to have high bids and be difficult to be selected.

although the centralized procurement was not selected, in theory, as long as the drugs are still "listed online", hospitals can still place orders for drugs according to their own needs. in 2015, the state council issued document no. 7 [2015] "guiding opinions on improving the centralized procurement of drugs in public hospitals", which stipulates that all drugs used by hospitals (excluding chinese herbal medicines) should be purchased through the provincial centralized drug procurement platform, that is, purchasing drugs that are "listed online".

at that time, the "online" was more to prevent regional procurement and use collusion, and it was aimed at all drugs. after 2018, the nationwide volume-based procurement that gradually began to take shape across the country was dominated by generic drugs in terms of quantity due to price and supply reasons.

the national medical insurance department has not required the forced withdrawal of original drugs from the network.however, in recent years, centralized purchasing platforms in various provinces have gradually begun to monitor and control the prices of these drugs, and issued notices requiring adjustments, directly or indirectly leading to the "disappearance" of various types of original drugs.

the regulations of most provinces have some similarities: for example, requiring these non-selected drugs to be linked to the national minimum price or to actively reduce prices; and non-selected drugs of the same quality level need to be adjusted in combination with the prices of shanghai's non-selected highest prices after a gradual price reduction.

the former is aimed at some generic drugs that have not passed the review. because they are not as effective as the reviewed generic drugs, they need to be adjusted to the "national minimum price", which means you get what you pay for. the latter "same quality level" actually refers to the reviewed generic drugs and original research drugs, whose efficacy and safety are recognized, and the main supervision point is price control. the reference standard for price control is the "shanghai red line price".

the “red line price” has been implemented in shanghai since 2018.

the three-level standard of green line reference, yellow line warning and red line interception is set for the online price. once the price exceeds the red line price, the bargaining result will not be able to pass the verification, which is equivalent to "online failure". there is no clear calculation formula for the formulation of the red line price, which is generally obtained by combining the domestic and international prices of drugs.

before this year, the promotion of the drug price was average across the country; but as drug price management entered the national coordination stage from last year to this year, the linkage and unification of drug prices between provinces became the focus of work. in this environment, the price space for unselected drugs is gradually tightening.

take hebei province as an example. in 2020, the price regulations for drug listing in hebei province were relatively loose: for varieties that did not obtain the qualifications for selection in this listing, that is, chemical drugs with the same generic name, dosage form and quality level, if there are two or more companies applying for listing, the maximum price difference shall generally not exceed 1.8 times.

until march 14 this year, hebei province issued the "notice on the listing of the ninth batch of national volume-based procurement of same generic name unselected drugs", which mentioned: the declared price of the national centralized procurement unselected drugs shall not be higher than the shanghai red line price of the variety and the lowest listing price in other provinces across the country. this new policy directly resulted in 110 drugs no longer meeting the listing conditions.

liaoning province also adopted the new price control standard at the same time as hebei province. on april 9 this year, liaoning province stipulated that products that did not win the highest price in shanghai must be reduced to no higher than the shanghai red line price before they can continue to be listed for purchase.

however, as of now, the listing policies in different regions still maintain a certain degree of independence, and some regions still retain price barriers for original drugs.for example, the policy of jiangsu province is similar to that of hebei province, implementing price warning management for drugs listed on the network, and taking 1.8 times the lower of the average price and median price of the same type of drugs as the price warning baseline. but the key difference is that original research drugs are temporarily exempted from participating in this warning system. also excluded are short-supply drugs, emergency rescue drugs, reference preparations and approved generic drugs.

-02-

why don’t hospitals purchase if the network is not withdrawn?

but even if the original drugs are not withdrawn from the internet, hospitals have relevant purchasing channels, and the motivation to purchase will become smaller and smaller. "from the perspective of prescription habits, it is a trend for generic drugs to replace original drugs, especially domestic drugs with better effects, because of the need to control costs in departments," said a doctor from a tertiary hospital.

with the deepening of drg (disease related group) reform, the cost control task has been passed from the hospital to the department and then to each doctor. since the share of medical insurance funds for each hospital is relatively fixed now, the hospital needs to bear a large proportion of the excess, so most hospitals directly link the cost control task with the evaluation, performance, reward and punishment mechanism, and also internalize the cost control concept into physician training.

in addition, hospitals have medical insurance assessment indicators, and the higher the level of the hospital, the stricter the assessment. for the winning products in the centralized procurement, the hospital's volume purchase is based on no less than 70%-80% of the actual drug usage in the previous year. failure to meet this target will affect the allocation of medical insurance funds for the next year.

in addition, most patients prefer cheaper drugs of the same type when the efficacy of the drugs is similar. therefore, doctors and hospitals are increasingly inclined to use drugs selected from centralized procurement in purchasing and prescribing.

in short, there is no policy restricting hospitals from using imported original drugs. however, due to the chain formed by centralized procurement, online listing, and medical insurance assessment, most original drugs are "out of the game".

"generic drugs such as azithromycin, which are controversial in terms of drug resistance, do not account for a large proportion," said the doctor."most approved generic drugs can meet 90% of the needs of most patients"of course, there must be special patients and special needs in the market, and we still need to leave them some room for choice.”

-03-

misunderstandings caused by the “consistency” of generic drugs

saving medical insurance funds and ensuring clinical efficacy are not incompatible, and generic drugs do not necessarily mean they are not good drugs.

it is a common rule around the world that once the patent of an original drug expires, cheap generic drugs will be launched to occupy the market. from the perspective of pharmacoeconomics, generic drugs can increase drug accessibility, provided that the clinical effects are basically the same as those of the original drug.

my country has not had a long history of conducting consistency evaluation for generic drugs. in february 2016, the state council issued the regulations on conducting consistency evaluation of generic drug quality and efficacy, stipulating that drugs that have not completed consistency evaluation within the prescribed period will not be registered. nowadays, before the national centralized procurement every year, a batch of generic drugs will rush to complete the consistency evaluation before the application deadline.

however, passing the consistency evaluation does not mean that the efficacy is 100% the same as the original drug. original drugs are usually considered to have a 100-point standard, and generic drugs that have not passed the consistency evaluation in the past are of lower quality, with scores of about 60 points, while generic drugs that have passed the consistency evaluation can usually reach about 80-100 points. generally speaking, generic drugs with 80% bioequivalence (biological activity and availability of drugs in the body) can be considered to have the same efficacy as the original drug.

some people have suggested that bioequivalence is not equal to clinical equivalence, and that the age and health status of the people participating in the consistency evaluation trial are different from the real-world situation.

in order to illustrate the real-world effects of the centralized procurement of generic drugs, the national medical insurance administration has also made efforts. since 2021, commissioned by the national medical insurance administration, xuanwu hospital of capital medical university has conducted real-world research to evaluate the selected generic drugs from 38 brands. the results of the study showed that the clinical efficacy and safety of the selected generic drugs are comparable to those of the original drugs.

a clinician said, "in terms of consistency evaluation, theoretically, the ingredients are the same, and the efficacy of many drugs is similar, so the efficacy can be seen after use. however, consistency evaluation does have its shortcomings, because the same ingredients cannot guarantee that the absorption, metabolism, distribution, excretion, etc. are exactly the same."

some practitioners suggested that the consistency evaluation should be supplemented.through real-world use, we select products that have passed the consistency evaluation and have shown a difference in efficacy between them and the original drugs in clinical use, and ask companies to redo bioavailability test results. for those that have problems with their efficacy in clinical use, the verification center will conduct on-site inspections and make the test results public.

-04-

the difficulty of policy making under the difficult situation of satisfying everyone

centralized procurement, online listing, and the corresponding policies of hospitals have led to a decrease in the number of original research drugs in hospitals. however, the drug needs of doctors and patients are diversified.

what should patients do when the hospital cannot prescribe imported original drugs and they need them? one way is to take the doctor's prescription and buy the medicine at a pharmacy outside the hospital.

however, there are two problems with this method of purchasing medicines: first, the process is more complicated than that of using medicines directly in the hospital, and there is a possibility of delay in taking medicines; second, the price of buying medicines outside the hospital may be more expensive. pharmacies do not have the same zero-markup policy as hospitals, and the reimbursement policies vary. some pharmacies are not designated by the medical insurance and cannot be reimbursed, and some require personal accounts rather than unified accounts for reimbursement.

in addition, imported original drugs can be purchased on online drug purchasing platforms such as meituan and jd.com.

some people who do not care about the cost of medicines will choose the above method; but some people with low income or who care about the cost of medicines are more sensitive to the out-of-pocket portion and generally do not choose to go to pharmacies outside the hospital to buy medicines with higher out-of-pocket prices.

some provinces have tried to implement medical insurance payment prices, that is, the price of imported drugs can be set independently, medical insurance only pays a fixed part, and the rest of the price difference is paid by the patient. however, some people are dissatisfied with the increase in the out-of-pocket amount and even petition.

since 2018, the implementation of the centralized procurement policy has indeed made significant progress in optimizing the allocation of medical resources and reducing drug costs, but it has also brought about supply and demand contradictions and difficulties in the implementation of medical insurance policies.

in order to truly achieve a balance between drug accessibility and fairness, it is necessary to consider market mechanisms while responding more flexibly to the needs of different patient groups. in the future, how to better combine medical insurance payment methods, drug pricing and policy transparency to improve the overall efficiency of the medical system and patients' drug experience will continue to be an important challenge for policymakers and medical institutions.