China’s NHSA Aims to Balance Drug Prices with New Monitoring System by March 2024

The National Healthcare Security Administration (NHSA) has issued a notification aimed at fostering inter-provincial price fairness, integrity, transparency, and balance for drugs sharing the same generic names and manufacturers. The initiative involves a comprehensive review and inspection of drugs based on four criteria: generic name, manufacturer, dosage form, and specification. This process includes monitoring national online procurement drug prices to identify and address geographical price disparities. The goal is to eliminate any unjustifiably high prices by March 2024.

The document specifies that the prices of regularly procured online drugs should align with or be below the monitored prices. National volume-based procurement (VBP) drugs must adhere to the agreed prices in the supply provinces. For non-supply provinces, the online procurement prices for drugs in VBP rounds 8 and 9 should be adjusted to no more than 1.5 times the winning price or the highest winning price of the same variety, while drugs from the previous seven VBP rounds are encouraged to follow suit. Provincial-level VBP tenders must conform to agreement prices in both supply and non-supply provinces. Drugs subject to medical insurance negotiation or price bidding are to follow the nationally unified medical insurance payment standards.

During this special treatment period, applications for offline procurement of low-priced drugs, online procurement of relatively high-priced drugs, and drugs approved by the GQCE that are not eligible for procurement will not be reviewed. Monitoring prices for drugs available for online procurement in only one or two provinces will not be disclosed at this time. Provinces are required to assess the fairness of online procurement drug prices.

In a press conference, the NHSA clarified that the special treatment focuses primarily on products with concentrated distribution and active trading. Local healthcare security administration bureaus and centralized procurement institutions may conduct interviews with relevant manufacturers. The monitoring price is not a benchmark against the lowest national price but a fair transaction price determined based on existing transaction prices using statistical methods such as median and mode. This price level represents a price set by manufacturers independently and guaranteed to be within the supply capacity and acceptable range of the enterprise. For manufacturers, it represents a partial correction of prices between balanced regions, with no expectation of widespread significant price reductions.- Flcube.com

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