"The Leading Group of The State Council for Deepening the Reform of the Medical and Health System

After deliberation and adoption at the 71st Executive meeting of The State Council on November 20, 2019, the Leading Group of The State Council to deepen the reform of the medical and health System recently issued the "Several Policy Measures to Further Deepen the reform of the Medical and health System with the Centralized Purchase and Use of Drugs as a breakthrough" (National Medical Reform No. 3 (2019), hereinafter referred to as "Several Policy Measures").

First, what is the background and significance of formulating the "Several Policy Measures"?

The national organization of centralized drug procurement and use pilot is a major decision and deployment made by the Party Central Committee and The State Council. Since the start of the pilot work, it has effectively promoted the return of drug prices to a reasonable level. At present, the scope of the pilot is being expanded to the whole country. This reform is a major reform of the drug procurement mechanism, which is conducive to reducing artificially high drug prices, reducing the burden on the masses, and will also promote the further reform of medical care, medical insurance and medicine, consolidate the results of the comprehensive reform of public hospitals, and promote the healthy development of the pharmaceutical industry. At the beginning of the design of the pilot system, the medical reform leading Group of The State Council deployed research on how to take the centralized procurement and use of drugs as a breakthrough, promote the linkage of medical care, medical insurance, and medicine, amplify the effect of reform, and included the development of relevant documents in the key tasks of medical reform in 2019.

The significance of formulating "Several policy measures" is mainly reflected in three aspects: first, it is conducive to promoting the implementation of the pilot. The "Several Policy measures" put forward policy measures for the "blocking points" and "pain points" in the process of the implementation of the national organization of centralized drug procurement and use pilot, such as improving the level of drug quality, ensuring stable supply, improving the efficiency of drug payment, mobilizing the enthusiasm of medical personnel, etc., to further promote the implementation of the pilot and expansion work, and ensure that the masses benefit from the reform. Second, it is conducive to further building consensus and deepening the linkage reform of the three hospitals. On the basis of summarizing and refining local experience, the "Several policy measures" further clarified the direction of centralized procurement, clarified the reform path of "taking space, adjusting structure, and ensuring cohesion", which is conducive to guiding local governments to further improve their understanding, firmly deepen the confidence and determination of medical reform, and further promote the reform of key areas and key links to break the ice. Third, it is conducive to the healthy development of the pharmaceutical industry. The "Several Policy Measures" adhere to reform and innovation as the driving force, adhere to the combination of government leadership and market mechanism, and propose measures to further optimize the drug review and approval system, accelerate the consistency evaluation of the quality and efficacy of generic drugs, promote the alternative use of generic drugs, and establish a national public procurement market for drugs and a multi-party procurement pattern. It will further guide and promote the healthy, sustained and high-quality development of China's pharmaceutical industry, and ensure that the people have access to high-quality and reasonably priced drugs.

2. What are the main contents of the "Certain Policy Measures"?

The "Several Policy Measures" mainly put forward 15 reform measures from four aspects: medicine, medical care, medical insurance reform and industry supervision.

In terms of reform in the pharmaceutical field, six measures are proposed around key links such as drug procurement, supply and quality. First, comprehensively deepen the reform of centralized drug procurement and use, optimize the mode of centralized procurement, and expand the scope of drug varieties in an orderly manner. The second is to build a national drug public procurement market and a multi-party procurement pattern, and for drugs that are not included in the scope of national procurement, all regions rely on provincial procurement platforms to carry out centralized procurement. Third, improve the level of drug quality, actively promote the consistency evaluation of generic drug quality and efficacy, and accelerate the construction of drug information traceability system. The fourth is to ensure the stable supply of drugs, starting from the centralized procurement of drugs by the state, and gradually establishing the emergency reserve, inventory and capacity reporting system of the winning manufacturer. Fifth, improve the efficiency of drug payment and encourage medical insurance agencies to settle the payment directly with production or circulation enterprises. The sixth is to promote the construction of a unified and open national drug production and circulation market pattern and promote orderly market competition.

In terms of reform in the medical field, three measures were put forward to mobilize the enthusiasm of medical institutions to use selected drugs, promote clinical rational drug use, and establish a new mechanism for scientific operation. First, we will promote coordinated reforms such as dynamic adjustment of medical service prices, and explore the optimization of medical service prices in a steady and orderly manner on a pilot basis without increasing the burden on the masses. From 2020 to 2022, all localities should seize the window period for pilot drug price reduction and cancellation of consumables addition, conduct price adjustment assessment every year, adjust prices in a steady and orderly manner when starting conditions are met, increase the dynamic adjustment of medical service prices, and the increased costs due to price adjustment are in principle included in the scope of medical insurance payment, closely linked with the "three doctors" linkage reform. Implement the investment responsibility for public medical and health institutions that meet the regional health plan according to regulations, and give proper preference to traditional Chinese medicine hospitals. The second is to vigorously promote the reform of the salary system, requiring all localities to implement the "two permits" requirements, establish a salary system that meets the characteristics of the medical and health industry and a scientific and reasonable salary distribution mechanism, and implement the autonomy of public medical institutions in distribution. The third is to strengthen the standardized management of drug use in medical institutions, promote medical institutions to prioritize the use of national essential drugs and drugs in the medical insurance list, and timely adjust and optimize the drug list in medical institutions.

In the reform of the medical insurance field, three measures are proposed to improve the performance of medical insurance. First, promote the implementation of drug insurance payment standards, formulate drug insurance payment standards according to common names, and establish a dynamic adjustment mechanism. Second, deepen the reform of medical insurance payment methods, accelerate the establishment of diversified and complex medical insurance payment methods, and expand the scope of national pilot programs to pay according to disease diagnosis. The third is to improve the supervision mechanism of medical insurance funds, implement and consolidate the basic medical insurance at the municipal level, and explore the promotion of provincial planning where conditions permit. We will encourage commercial insurance institutions and other social forces to participate in the handling of medical security services such as basic medical insurance, serious illness insurance, and medical assistance, and improve the level of management services.

In terms of strengthening industry supervision, three measures are proposed to improve the efficiency of supervision. First, promote the fine supervision of medical services, further promote the performance assessment of public medical institutions, and formulate and implement a monitoring index system for rational drug use. Second, we will improve the national drug price monitoring system, strengthen the dynamic monitoring of domestic purchase prices and the tracking of foreign drug prices, and strictly investigate and punish price violations and monopoly. The third is to accelerate the information construction and formulate a public hospital medical insurance supervision and management system plan based on big data.

In order to promote the implementation of policy measures, the "Several Policy measures" have clarified the leading departments responsible for each task.

Related links: The Leading Group for Deepening the Reform of the medical and Health System of The State Council issued a notice on several policy measures to further deepen the reform of the medical and health system with the centralized procurement and use of drugs as a breakthrough‍