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David Pieroni, Managing Director of Automation Quality Solutions (AQS)
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Rough tender treatment- New gov't regs may try to relieve drug bidding strains
Monday, February 8, 2010
Sources close to government healthcare authorities have indicated that the government is planning to introduce the "Regulation of Centralized Drug Procurement in Medical Institutions (draft)" to further standardize the drug bidding and tendering process and correct past problems, according to the National Business Daily February 5.
Previously, the MOH issued the "Opinion on Further Standardization of Centralized Drug Procurement in Medical Institutions" in January 2009.The opinion required bidders to be qualified drug manufacturers and excluded wholesalers from participating in the bidding process. Bid-winning manufacturers would then consign their products to qualified distributors or were permitted to directly distribute to medical institutions. Additionally, provincial bidding centers were asked select only dozens of qualified distributors from a pool of thousands of candidates-meaning that unsuccessful candidates would lose the right to distribute drugs.
A number of problems have arisen from the policies. First, many drug manufactures are in reality not able to directly distribute to medical facilities due to the added burden of needing to establish qualified drug distribution and storage facilities-a condition that is too costly and inefficient for most players. Second, provincial agencies have been significantly hammering down drug prices in their tendering processes following the release of maximum drug retail prices from the National Development and Reform Commission (NDRC). Manufactures are facing greatly reduced profits, threatening the quality of drugs.
