On December 17, 2012, the Ministry of Health (“MOH”) issued the Tentative Guidelines for Centralized Procurement of High Value Medical Consumables (the “Guidelines”) with immediate effect, with an aim to control health care costs, in particular in the area of medical consumables which are extensively used in clinical practice with high prices and strict safety requirements. Prior to the issuance of the Guidelines, the centralized procurement system had been implemented in several provinces (such as Beijing, Zhejiang, Jiangsu and Hunan) for certain High Value Medical Consumables (“HVMC”). MOH’s rolling out of the centralized procurement system for HVMCs is expected to improve the transparency of healthcare institutions’ procurement practices and further reduce HVMC prices.
Pursuant to the Guidelines, HVMCs to be purchased by all non-profit public healthcare institutions at the county level or above must be collectively procured online through the provincial centralized tendering and bidding agencies for pharmaceutical products every two years. Other private healthcare institutions are also encouraged to participate in the centralized procurement process.
The Guidelines set forth a reference list of HVMCs subject to the centralized procurement mechanism, including intravascular interventional devices, non-vascular interventional devices, orthopedic implants, neurosurgical implants, electrophysiological catheters, pacemakers, extracorporeal blood circuit/blood purification devices, ophthalmic implants, dental implants, artificial heart valves, and others. Each province is authorized to formulate its own list of HVMCs subject to centralized procurement.
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