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recently, the topic of hospitals' difficulty in prescribing imported drugs has attracted public attention. this time, the focus is on azithromycin dry suspension produced by a multinational pharmaceutical company. a parent of a 6-year-old child posted that he wanted to prescribe the drug to his child at a hospital in hangzhou but failed. the hospital could only prescribe domestically produced injectable azithromycin. the parent asked: where did the imported azithromycin go?

in fact, this is not the first time that public opinion has paid attention to similar issues. to be more precise, the public is concerned about original drugs as opposed to generic drugs. in early 2021, some diabetic patients also found that an original drug, metformin, which they had taken for ten years to control blood sugar, disappeared from public hospitals, and was replaced by domestic metformin at 3 yuan for 100 tablets. since the original metformin drug was launched in china in 1999, it once occupied nearly 70% of the domestic market share. but this situation changed in 2020.

this year, metformin was included in the third batch of national centralized drug procurement, becoming the most competitive product among pharmaceutical companies. the domestic generic drug metformin hydrochloride tablets that finally won the bid had a minimum price of only 0.015 yuan/tablet, while the price of the corresponding original drug was more than ten times higher, and was blocked from centralized procurement. the same situation happened to azithromycin. in the national centralized procurement in november 2023, the original drug with a price of 5.58/bag was not selected. the winners were the top 9 with the lowest price. the original drug was about 4.7 times higher than the 9th bid of 0.98 yuan/bag.

the national centralized procurement launched in 2018 has been carried out for nine batches, covering 374 drugs including drugs for common diseases, chronic diseases and emergency rescue drugs, and gradually expanded to biological products and medical consumables. through the group purchase method of "quantity for price", the centralized procurement has reduced the average price of drugs by more than 50%, significantly reducing the burden on patients and saving a lot of medical insurance funds. but on the other side of the coin, more and more original research drugs have not been included in the centralized procurement list because they are difficult to compete with generic drugs in terms of price, and have gradually withdrawn from public hospitals.

faced with this dilemma, how should the medical insurance department better meet the needs of patients? how to rationally view the difference in efficacy between generic drugs and original drugs? recently, chen hao, director of the drug policy and management research center of tongji medical college of huazhong university of science and technology and comprehensive review expert of the national medical insurance administration, accepted an exclusive interview with china newsweek on the above issues.

on september 2, patients and their families lined up to get medicine at the affiliated cancer hospital of sun yat-sen university in guangzhou. photo/visual china

“it is inevitable that original research drugs will be withdrawn from hospitals”

china newsweek: some patients have reported that it is difficult for hospitals to prescribe original research drugs. what do you think of this phenomenon? will generic drugs replace original research drugs on a large scale in the future?

chen hao:since the country began to implement the "4+7" volume-based procurement pilot in 2018, nine batches have been carried out. the first and second batches were rule explorations. from the third batch, the system was gradually improved. by the sixth batch, it was basically formed. the next few batches were mainly local optimizations. according to my observation, around the third batch of national centralized procurement in 2020, the original research drugs began to show signs of "withdrawal from the market". at that time, quite a number of multinational pharmaceutical companies had realized that they could not compete with generic drug companies in terms of price. the logic of national centralized procurement is the "low price principle". after several batches of centralized procurement, only a few original research drug companies were selected, and many companies eventually gave up participating in national centralized procurement. companies that abandoned the bid can only choose the out-of-hospital market and seek a certain living space for original research drugs in social pharmacies, but this is mainly for oral drugs. for injection forms such as azithromycin dry mixed suspension, because it is a prescription drug, it is difficult to obtain and use in pharmacies, and it cannot be purchased on a large scale by public hospitals, so it can only gradually withdraw from the market.

on the other hand, when multinational pharmaceutical companies saw this trend, their international headquarters' judgments and expectations of the chinese market also changed. some companies began to take the initiative to make strategic choices. for example, the ambroxol hydrochloride injection (used to treat acute and chronic respiratory diseases) produced by boehringer ingelheim will no longer be supplied to the chinese market from the first quarter of 2024. some original drug companies also choose to sell mature drugs in packages to domestic companies. as early as 2019, the american pharmaceutical company eli lilly divested its antibiotic product line and sold its important antibiotic products to chinese pharmaceutical companies. therefore, as long as original drug companies find it difficult to cope with the price challenges brought by generic drug companies, it will be a general trend for generic drugs to replace original drugs on a large scale in china in the future.

"china newsweek": in the "quantity for price" principle followed by national centralized procurement, the so-called "quantity" is generally 60%-70% of the drug demand of public hospitals. that is to say, for the remaining 30% of drugs, public hospitals can theoretically still purchase them on their own from the unselected products. but why is it that in reality, as long as original drug companies are not selected, they can basically only go to the off-hospital market and it is difficult for them to stay in public hospitals?

chen hao:under the general trend of reform of medical insurance payment methods, public hospitals rely on medical insurance income as the main body. for drugs with the same generic name, that is, drugs with the same drug ingredients, medical insurance will only pay the benchmark selected price. the price of original research drugs is usually much higher than the benchmark price, so who will bear the excess? if the patient is unwilling, no one will bear it. against this background, hospitals naturally tend to choose drugs selected in the centralized procurement that are affordable by medical insurance. in addition, after public hospitals began to gradually implement the reform of the disease group (drg) payment method, in order to prevent losses and let patients' payment costs not exceed the payment standard after "packaging", hospitals will also be more proactive in using relatively cheap generic drugs.

furthermore, from the perspective of hospital management, it is not easy to manage both generic drugs and original research drugs. since both are available, which patient should the doctor give the cheaper one and which patient should he give the more expensive one? this involves a series of issues regarding fairness and ethics in drug use, which can easily lead to conflicts. for hospitals, "one size fits all" is the most realistic approach. judging from the results, the penetration rate of selected drugs in many hospitals can reach more than 95%, and original research drugs basically have no room for survival. the so-called 30% margin is difficult to achieve in practice.

therefore, judging from the current situation, it is inevitable that original research drugs will be withdrawn from hospitals. i believe that unless my country's commercial medical insurance system has a separate insurance product for original research drugs in the future, which allows patients to pay for original research drugs to a certain extent, these original research drugs in hospitals will disappear sooner or later. however, in china, commercial insurance as a solution is difficult to implement because our basic medical insurance covers too wide a range and people are generally unwilling to buy commercial insurance.

china newsweek: in april this year, the hebei provincial medical drug and equipment centralized procurement center issued a notice to remove a number of unselected drugs from the local medical procurement platform on the grounds that their prices were higher than the "shanghai red line price". in fact, in the past two years, many provinces across the country have required direct linkage with the "shanghai red line price" or the lowest national winning bid price. how do you view this phenomenon and its possible impact?

chen hao:the implementation of centralized procurement by the state can be understood as a governance action on drug prices and behaviors. after several years of governance, the prices of most drugs across the country have been regulated, but some drugs still have inflated prices. therefore, some regions, represented by shanghai, have introduced price warning mechanisms to prevent excessive price differences between drugs with the same generic name.

the implementation of this mechanism in shanghai has its own unique background. since 2018, shanghai has adopted the "green line reference, yellow line reminder, red line interception" drug online bargaining method. the setting of the red line price is generally based on the average purchase price of fifteen provinces and cities, the highest purchase price of the same type of original research drugs/reference preparations in shanghai and other factors. once the drug price exceeds the red line price, the system will automatically intercept the drug "online". however, a more fundamental purpose of shanghai's adoption of this measure is to encourage pharmaceutical companies to voluntarily reduce prices in an orderly and phased manner. at the same time, because its medical insurance fund is relatively abundant, although many original research drugs have not been selected in the centralized procurement, medical insurance can still reimburse a certain proportion.

it is worth noting that the situation in other places may not be the same as in shanghai. in fact, the transaction conditions, payment conditions, management and operating costs of each region are different, especially in the distribution process. the distribution cost of the same drug in remote areas such as xinjiang and qinghai may be very different from that in guangdong. therefore, the practice of many provinces requiring the same price to be linked across the board is questionable.

since june 1, 2015, china has abolished government pricing for most drugs and established a market-oriented drug price formation mechanism to reduce the government's direct intervention in drug prices. the most important point in the reform document "opinions on promoting drug price reform" issued that year was to emphasize that drug prices are determined by market supply and demand. the medical insurance department guides the market to form reasonable drug prices by formulating payment standards for medical insurance drugs. the prices formed by the market will of course vary from region to region. local medical insurance departments should be clear that when the government governs prices, it is more important to regulate illegal price behaviors, such as price manipulation and price monopoly, rather than regulating prices themselves. the price linkage mechanism in some regions now intervenes in prices themselves, which needs to be vigilant.

in fact, i am not opposed to the linkage mechanism itself, because linkage can effectively reduce information asymmetry and social transaction costs, but the question is, what is the purpose of linkage? the linkage should be to obtain more price information and make reasonable use of it based on local conditions, rather than simply and crudely citing the linkage price as the local price. to achieve the first point, it places high demands on the price governance capabilities of local governments.

in my opinion, many provinces have directly adopted price linkage due to insufficient refined management capabilities and other reasons. the original intention is good, but how to grasp the degree in policy implementation, what kind of price difference is reasonable, and what is the real reason behind the price difference, these issues all require further careful consideration by local medical insurance departments.

in fact, the current "red, yellow, and green" early warning mechanism and various types of price linkage may only be a transitional form. the final drug prices, including those of generic drugs, will be formed by the market. what the government should do is not to intervene in the market itself, but to create a healthy market environment and guide and regulate the market through various regulatory measures.

“consistency evaluation is just a 60-point make-up exam”

"china newsweek": if generic drugs will replace original drugs on a large scale in the future, the question that many members of the public are most concerned about is: can generic drugs be completely equivalent to original drugs in terms of efficacy?

chen hao:there are many different opinions on whether generic drugs can completely replace original drugs, and many doctors and patients have many doubts. in order to respond to these doubts, commissioned by the national medical insurance administration, a number of clinical institutions have conducted real-world studies on generic drugs selected in the centralized procurement. the results showed that there was no statistical difference in clinical effectiveness and safety between generic drugs and original drugs, that is, the effects were equivalent. included in the study are a variety of classic drugs such as azithromycin, cefdinir, and metformin. this result has a certain reference value, but the true efficacy of generic drugs still needs more evidence to prove.

many people will say that generic drugs have passed the "quality and efficacy consistency evaluation" stipulated by the state, but you should know that the consistency evaluation is just a 60-point make-up test. in the past, my country did not require generic drugs to pass the consistency evaluation with the original research drugs before they were put on the market, resulting in some gaps between the efficacy of many drugs and the original research drugs. since 2013, we have started to "make up lessons" and launched the consistency evaluation reform of existing generic drugs in batches. but in fact, "passing the evaluation" is only the minimum passing line for market access, which is equivalent to the minimum quality standard stipulated by a country. above the national standards are industry standards, and above the industry standards are the internal control quality standards of excellent companies. original research drug companies usually implement the highest internal control standards, which are 90 points or even 100 points, while generic drug companies that have "passed the evaluation" can only prove that they have reached 60 points.

"china newsweek": can you explain in detail why, since generic drugs have passed the consistency evaluation, there may still be a big gap compared with original drugs?

chen hao:the u.s. food and drug administration (fda) stipulates that whether generic drugs can replace original drugs needs to meet the following five "consistency" conditions. the first is to organize production according to the international pharmaceutical production good management standards (gmp); the second is pharmaceutical equivalence, with the same active ingredients as the original drug; the third is bioequivalence, under the same test conditions, the degree and speed of drug ingredients absorbed by the human body are consistent; the fourth is clinical equivalence; and the fifth is to provide appropriate instructions. these are also internationally recognized "consistency principles" for generic drugs.

however, the consistency evaluation currently implemented in my country only reaches the third step, that is, bioequivalence, not clinical equivalence. some drugs have not even fully reached the third step. in fact, even if the drug ingredients are the same, the differences in excipients and production processes will affect the solubility, bioavailability and stability of the drug in the body, and even the final efficacy. taking the antipyretic acetaminophen tablets as an example, the domestically produced generic drugs have the same ingredients as the original drugs, but the excipients used are completely different. the original drug companies generally use microcrystalline cellulose as the main excipient, which has better solubility and absorption. these subtle differences in the drug ingredients when they work in the body may be extended to the clinical setting, and the difference may be very large, especially for some small-dose drugs.

in addition, there is a big gap between the overall technological level of generic drug production in my country and that of some multinational pharmaceutical companies. the most typical example is the cephalosporin skin test. in the past, because my country's purification process could not strictly control the impurity content of the drug, in order to prevent possible safety risks, hospitals generally required patients to do skin tests before using cephalosporin drugs, but this was not necessary for imported original drugs. in fact, after the patent of the original drug expires, the company is only obliged to disclose the molecular composition of the drug, and will not disclose the excipients and production process. the latter two are still the core technical secrets of these multinational pharmaceutical companies.

another worrying issue is that some generic drug companies will try to keep their applications as close as possible to the excipients and the entire process used by the original drug in order to pass the consistency evaluation. once they pass the evaluation, some pharmaceutical companies may apply to change the excipients and process for profit considerations. in addition, if the winning bid price is low enough and the profit margin is very limited, once there is any change in the outside world, such as an increase in raw material costs, in order to prevent losses, some speculative generic drug companies may also take risks to change the production process, causing the quality of generic drugs to decline.

an important reason for this phenomenon is that the production and circulation of drugs in my country are regulated locally, which inevitably involves local protectionism. the management authority for process changes lies with local drug regulatory authorities, and drug manufacturers are, in most cases, major local taxpayers. when companies propose to change excipients and processes, local governments may sometimes "give them the go-ahead." this is why many doctors and patients have a "reverence for original research" and are wary of domestically produced generic drugs.

drug production is different from general production, and the goal is to achieve zero errors. therefore, the real cost of pharmaceutical companies is the cost of building a complete set of scientific, standardized and sustainable full-process drug quality control systems, rather than the physical cost of the drugs themselves. this system cost is huge. the reason why generic drugs are cheap is not only because the patents have expired, but also because compared with original drug companies, they do not need to maintain a high-cost management system and quality control system. at present, whether it is national centralized procurement or drug supervision, more attention is paid to the physical quality of drugs, rather than system quality and management quality. this concept needs to be adjusted urgently.

“the management of drug supply should be refined”

china newsweek: the tenth batch of national centralized procurement is about to begin. the national medical insurance administration has repeatedly emphasized that the centralized procurement of drugs should achieve "price reduction without reducing quality", but in reality, the policy results of "price driven by quantity" seem to still focus more on the price itself. what suggestions do you have for this? at what levels can my country's drug centralized procurement system be further optimized?

chen hao:after nine rounds of national centralized procurement, many policy goals have been basically achieved, especially the situation of abnormally high drug prices in the past has been significantly corrected. the centralized procurement system has played a very positive role overall, but there is still room for improvement in some specific links.

the essence of my country's centralized procurement is a two-stage bid evaluation. in the first round, the lowest standard consistency evaluation is carried out, that is, the technical standard is shortlisted. after the shortlist, the second stage is to operate according to the commercial standard, simply compare prices, that is, the core logic of the entire policy is "the lowest price is selected". this also means that the process of winning, continuing, and re-continuing the bid in my country's drug centralized procurement is a race to the bottom. in the pharmaceutical industry, it means that pharmaceutical companies compete for market share by continuously lowering drug prices. the final result is that the winning company maintains production at a price infinitely close to "lowest cost + meager profit". at the slightest sign of trouble, drug production will either become insufficient in quality or fall into a shortage dilemma. this is a prisoner's dilemma caused by the compression of the value chain. the market is at risk of evolving into a "substandard market" with insufficient quality.

so, the key lies in how to motivate these winning companies so that they no longer just pursue a drug quality of 60 points, but move towards 80 points or even 90 points.

i suggest that in the national centralized procurement, when enterprises that have passed the consistency evaluation enter the second stage of bidding, they should not only compare prices, but also adopt a comprehensive bidding method, especially for the follow-up bidding of the first-time winning enterprises, they should comprehensively consider the price, quality, management system of the drug, and the credit evaluation of the enterprise itself. how to form a more scientific and reasonable comprehensive evaluation index requires the joint formulation of government departments and experts from various parties. this method is expected to change the situation of bottom-up competition to a certain extent.

the drug regulatory system must also be reformed simultaneously. current drug regulation is mainly ex post supervision, with only limited local inspections. in the future, it is urgent to strengthen dynamic quality monitoring of selected drugs and strengthen daily supervision. one point that needs to be emphasized in particular is that consistency evaluation is not a one-time evaluation. the drug regulatory authorities must cooperate with centralized procurement to conduct continuous evaluations of winning companies, and also absorb usage evaluations from researchers and clinical institutions. in fact, frontline doctors know the efficacy of a generic drug best and whether it can really replace the original drug. they often have more feedback and data from the real world.

in addition, we should also pay attention to the situation that some people have reported that they "cannot buy original research drugs". at the root of the matter, what patients really care about is not whether the drugs are imported, but whether they have good clinical effects. in order to solve this problem, on the one hand, the state should introduce corresponding incentive policies to continue to encourage generic drug companies to improve their drug quality and management capabilities; on the other hand, it should also force original research drug companies to transform and encourage them to actively embrace the chinese market. these multinational pharmaceutical companies must abandon the past marketing model with high management costs, such as hiring a large number of medical representatives to engage in so-called academic promotion. under high profits, this model can still be supported, but it will be difficult to sustain after the implementation of national centralized procurement.

finally, the existing policies should be flexible. if patients are willing to purchase original drugs at their own expense, at least a diversified channel of choice should be provided, such as designating some designated hospitals as supply guarantee units for original drugs, or establishing a temporary drug allocation platform, where patients who really need them can obtain unselected drugs outside the centralized procurement after a specific application procedure, or even "withdrawn" drugs. in short, the management of drug supply should be refined, with "one product, one policy", and not "one size fits all". generally speaking, the main goal of the first few batches of national centralized procurement was to "squeeze out the water". after squeezing out the price water, the current focus of work should shift to ensuring quality and supply.

reporter: hosyi linqixin