(Complete text at the end)

The proposed winning list does not disclose specific prices, but based on the follow-up procurement rules linked to the new lowest price, the prices of various products will generally decrease compared to the winning bids in the first round of centralized procurement.

In 2022, the Hebei Provincial Medical Insurance Bureau conducted a centralized bulk procurement of 22 types of medical consumables, including pain relief pumps, bone cement, and ultrasonic knife heads, resulting in an average price reduction of 56.5%, with the highest reduction reaching 89.4%. In 2023, Hebei took the lead in the Sanming Alliance to carry out centralized procurement of 19 types of consumables, such as septal defect occluders, cardiac fixators, and peripheral drug-coated balloons, achieving an average price reduction of 62.3%, with the highest reduction reaching 92.4%.

With the continuous improvement and expansion of centralized procurement for consumables, conducting multi-category procurement in a single instance has become the norm. However, it is still rare for a single procurement round to cover more than 20 categories, as seen in Hebei, where the disclosed agreed procurement volume exceeds 200 million units (see the chart below). The impact on the existing market will be even more pronounced.

02

2025 Consumables and Equipment Procurement Parallel

A new round of price cuts is coming.

With the centralized procurement of consumables having been implemented for many years, there are increasingly more procurement projects entering the continuation phase.

In addition to the 24 categories of medical consumables centralized procurement mentioned above in Hebei, Jiangsu Province has also officially announced the launch of the seventh and eighth rounds of medical consumables centralized procurement. The varieties include laparoscopic staplers, specialized neuro coils, ultrasonic knife heads, vacuum blood collection tubes; as well as orthopedic trauma types (locking compression plate systems, regular plate systems, intramedullary nail systems, and screws used independently).

At the same time, the progress of various new centralized procurement in the consumables sector has not ceased.

Heilongjiang has announced plans to take the lead in centralized procurement of vena cava filters and ablation electrodes; Hebei has clearly stated its intention to lead the centralized procurement of thoracic aortic stents and abdominal aortic stents; Sichuan has publicly solicited opinions on the document for volume-based procurement of medical consumables for cerebrospinal fluid shunt systems; Guangxi has clarified that it will take the lead in provincial alliance centralized procurement of traditional Chinese medicine needles; Hunan has made it clear that it will take the lead in national centralized procurement of high-frequency electric knife heads for medical consumables...

Anhui has clearly stated that public medical institutions within the province using funds arranged outside the fiscal budget, which have obtained valid Class B large medical equipment configuration permits, must participate in provincial centralized procurement for Class B large medical equipment planned for purchase in 2025, with one organization this year.

Recently, Guangxi issued a document stating that all medical and health institutions funded by the government or state-owned enterprises (including state-controlled enterprises) that purchase Class B large medical equipment and medical equipment costing over 10 million yuan per unit (set) using fiscal funds will, starting from March 1, 2025, be subject to centralized bulk procurement implemented uniformly by the Autonomous Region Public Resources Trading Center. In principle, centralized bulk procurement will be organized annually starting in May, and it will occur at least once a year.

The number of medical devices is small, their configuration is complex, and their costs are high, with significant differences in product demand among hospitals of different levels. The difficulty of conducting centralized procurement for medical devices is clearly higher than that for consumables and pharmaceuticals. However, after several years of pilot programs across various regions, the centralized procurement model for medical devices has gradually been established. Although the overall scale is still smaller compared to the centralized procurement of medicines and consumables, it has been able to demonstrate its effectiveness in saving funds and promoting resource allocation.

According to data disclosed by the Anhui Medical Insurance Bureau, the total amount of equipment procurement in Anhui Province in 2020 was 530 million yuan, saving nearly 260 million yuan compared to the hospital's budget procurement price. In 2021, the total amount of equipment procurement in Anhui Province was approximately 390 million yuan, with an expected saving of about 190 million yuan for medical institutions' equipment procurement funds.

From high-value consumables to low-value consumables and then to medical devices, the price reduction storm has basically swept through the entire field of medical equipment. For related companies, this reshaping of the landscape will bring both opportunities and challenges.

Attachment: Proposed selection results for 24 types of medical consumables including infusion ports.