The latest progress in national procurement of consumables arrived
The fourth batch of consumables for national procurement is expected to be implemented from May to June this year, and a new round of price reductions for high-value orthopedic and ophthalmic consumables is coming.
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Artificial lenses, sports medicine, neurosurgery…
Start-up of information maintenance of selected products in centralized procurement
On March 26th, the Fujian Provincial Drug & Equipment Joint Procurement Center issued a Notice on the Maintenance of Information Related to Selected Products in the Centralized Procurement of Medical Consumables Such As Artificial Lenses and Sports Medicine Organized by the State (hereinafter referred to as the “Notice”).
The Notice points out that in order to carry out the centralized procurement of artificial lens and sports medicine medical consumables organized by the state, the inter- provincial alliance procurement of neurosurgery medical consumables, and the inter- provincial alliance procurement of orthopedic trauma medical consumables with centralized procurement results in Fujian Province, relevant information maintenance work for the selected products in the centralized procurement of medical consumables in the above categories will be carried out.
The scope of reporting includes: centralized procurement of medical consumables for artificial lenses and sports medicine organized by the state, procurement of medical consumables for neurosurgery organized by the inter provincial alliance, and centralized procurement of medical consumables for orthopedic trauma organized by the inter provincial alliance related to selected products.
The reporting period is from March 28 to April 3, 2024.
In the second half of last year, the national and local levels launched a multi category procurement of consumables, including high-value consumables that have not yet experienced large-scale price reductions. The relevant procurement achievements will be gradually implemented this year, and the gear for reducing consumables prices will rotate accordingly.
Among them, the fourth batch of consumables has been carried out in December last year to determine the amount of selected products agreement procurement work.
According to CCTV News, based on pre purchase prices, the market size of this centralized procurement product is approximately 15.5 billion yuan.
In terms of orthopedic trauma centralized procurement, in September last year, the Beijing-Tianjin-Hebei “3n”, Henan and other 12 provincial orthopedic trauma alliances jointly completed a new round of orthopedic trauma centralized procurement. According to official disclosure, the market size is approximately 11.5 billion yuan based on pre centralized procurement prices. Based on the agreed procurement volume, it is expected that this centralized procurement will save 9.403 billion yuan in procurement costs annually.
The inter provincial alliance procurement of general intervention and neurosurgery led by Henan achieved an average reduction of 65.40% and 68.55%, respectively. Henan has made it clear that the selection results will be officially implemented in Henan Province starting from April 1st.
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The trend of centralized procurement rules towards gentleness
The two major domestic markets are heating up
Compared to the first two or three years, the current centralized procurement of consumables has expanded its scope, building a network of centralized procurement from multiple dimensions such as provincial, inter provincial, and national alliances, comprehensively scanning for artificially high consumables prices. The marginal market outside of centralized procurement is gradually shrinking, and a new pricing system is gradually forming. In this process, the rules of centralized procurement are gradually being adjusted and moving towards gentleness and scientificity, supporting the recovery of profit margins for enterprise innovation and sustainable development.
It is worth noting that centralized procurement also provides an opportunity for the adjustment of the market pattern. In the past few years, domestic medical devices have developed rapidly, but still mainly in the mid to low-end market. Pioneers in the industry have a first mover advantage and have cultivated the usage habits of doctors through long-term clinical education. The introduction and expansion of domestic new products face great challenges.
After centralized procurement, the hospital purchase volume has been redistributed to a large extent, and high-quality domestic medical equipment has been accelerated to enter the hospital. In addition, through group bargaining in various regions, some previously expensive consumables have achieved a price decline, which has also accelerated industry penetration to a certain extent.
Taking the fourth batch of national procurement as an example, currently, both domestic artificial lenses and sports medicine are in a climbing stage.
Among them, the development of sports medicine in China started relatively late, high-tech threshold, lack of market awareness, low penetration and other reasons to some extent limit the expansion of the domestic sports medicine market. In 2022, according to China Insights Consultancy data, the share of the top three domestic enterprises was only about 8%.
In terms of artificial lenses, the proportion of high-end, mid-range, low-end, and basic products of artificial lenses in China is currently 10%, 50%, 30%, and 10%, respectively; The market is still dominated by imported brands, with Alcon, Johnson&Johnson, Bosch Lun, and Carl Zeiss accounting for up to 80%.
The fourth batch of national procurement takes into account the current market situation, and the rules are more reasonable and relaxed, allowing enterprises to have no worries when quoting. In this centralized procurement, the participating enterprises attach greater importance to “quantity”, and under the high selection rate, the chances of domestic admission are greatly increased.
In addition, the national procurement rules have fully considered the admission of subsequent approved products to the hospital. The newly approved registration certificate of the selected enterprise can be considered as a selected product as long as the price is not higher than the selected price of the same product category. As a result, domestic enterprises have more sufficient time to quickly supplement their product lines and enhance their competitiveness. Enterprises with a complete product matrix layout and outstanding research and development capabilities are expected to stand out in the competition.
Overall, in the new market environment, the focus of commercial competition will shift from competing in channels and marketing to competing in dimensions such as innovation, product strength, and cost-effectiveness.
China is encouraging China end uses for more domestic products in latest years. Thus, more and more overseas manufacturers are planning localization in China. BradyKnows localization team has extensive experiences in facility establishment, audit, supplier evaluation, manufacturing, registration, and marketing in China. Pls feel free to let us know any questions on China entry via info@bradyknowsmedical.com
Source：Saibolan Instrument
Translated & edited： Bradyknow
