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4.999B Procurement of High Value Consumables: Lepu and MicroPort Become the Biggest Winners Among Domestic Companies!

Recently, the Health and Family Planning Commission of ShanDong Province (HFPCSP) announced the Circular on the Concentrated Procurement of High Value Medical Consumables for Medical and Health Institutions in ShanDong Province in 2017 (hereinafter referred to as the Circular). The Circular made it clear that throughout 2017, a total of 421 medical and health institutions in Shandong Province conducted online centralized procurement of high-value medical consumables through the platform. As a result, a total of 11 high-value consumables were purchased at a total purchase amount of CNY 4.999 billion. The purchase amount of vascular intervention consumables topped the list, reaching CNY 2.497297 billion!

The Circular clearly puts forward the key direction of future procurement in Shandong Province: always prioritizing domestic high-value consumables! First of all, the Circular clearly stated that there are problems in the high value consumables procurement in Shandong Province in 2017: the proportion of domestic high-value medical consumables purchased was relatively low. Among the top 50 products with high value for medical consumables, 13 of them are domestic products with a arrival amount proportion of 35.65%. Of the top 30 high-value medical consumables manufacturers, 9 of them are domestic enterprises with a arrival amount proportion of 29.03%. The low proportion of domestic products in the procurement has been put forward as a key problem for consumables procurement in Shandong Province. It is also a problem that in HFPCSP’s opinion needed to be solved urgently. We must increase policy support for domestic products.

It is necessary to further strengthen the management of the use and distribution of high-value medical consumables and reasonably guide medical and health organizations to give priority to purchasing domestic high-value medical consumables. In the first quarter of 2018, for cities and units that have failed to fully rectify the problems stated in the Circular. The provincial government will inquire into such failure and hold responsible officials liable. In this procurement of high value consumables in Shandong Province, Lepu and MicroPort were the biggest winners among domestic companies! In the list of the top 30 manufacturers in terms of sales amount, Lepu ranked the fourth and MicroPort sixth, both of which were also the top 2 among domestic brands! Even among the top 50 list in terms of sales amount, Lepu and MicroPort ranked the top 2, surpassing international giants such as Medtronic, Abbott and Boston Scientific! In addition, five domestic brands such as Shandong Weigao, Weihai Weigao, Sino Medical Sciences Technology Inc. (SINOMED), Essen Technology (Beijing) Co., Ltd., and Panther Healthcare also entered the list of the top 30 manufacturers for sales!

National policy: In 2018, drug coronary stent system, artificial hip prosthesis, ICD (implantable cardioverter defibrillator system), and CRT (cardiac resynchronization therapy series) will be listed as the first high value. Consumables national negotiation pilot products. The import dependence of the above four types of products is relatively high because of the high technical barriers, the share of foreign capital that is significantly higher than that of domestic enterprises and the pricing that is significantly higher than that of domestic equivalent products. The national negotiations will be put in place in 2018 aimed to focus on reducing the prices of such imported products.