After the 'moisture' in medical devices is squeezed out.

Recently, a report titled 'National Organization for Coronary Stent Centralized Bulk Procurement Company Price Review' has set a new low for coronary stent prices: the average winning bid is around 700 yuan.

The average price has dropped from 13,000 yuan to 700 yuan—the first batch of nationally centralized bulk procurement of coronary stents has shocked the market with a 'floor price' in Tianjin. Compared to 2019, the average price drop for the same products from the same companies has reached 93%.

Xinhua News Agency commented that a small coronary stent reflects the significant development of innovation in China's pharmaceutical field and medical security work. As a cardiologist said, since the introduction of domestic stents, the price of imported stents has plummeted from the exorbitant price of 40,000 to 50,000 yuan to around 10,000 yuan. After 20 years of development, domestic stents have become the first and only high-end medical devices in the domestic market led by domestic companies. This is the premise for the shocking low prices in this centralized procurement, and it shows that only through innovation can we gain 'bargaining power' and better safeguard people's health.

Significant price drop for coronary stents

Reducing the gray area in sales

On November 5, the national centralized procurement of coronary stents opened bidding in Tianjin. 11 companies with 26 stent products competed without grouping, leading to fierce price cuts, with none of the 10 selected products exceeding 800 yuan.

The lowest winning bid for Jiwai Medical's EXCROSSAL product was 469 yuan per stent. The prices of other winning products ranged from low to high: Yisheng Technology's Aili at 549 yuan; MicroPort Medical's Firebird 2 at 590 yuan; Lepu Medical's GuReater at 645 yuan; Medtronic's Resolute Integrity at 648 yuan; MicroPort Medical's Firekingfisher at 750 yuan; Jinruikaili's Helios at 755 yuan; Boston Scientific's PROMUS PREMIER and PROMUS Element Plus, both at 776 yuan; and Wanrui Feihong's NOYA at 798 yuan.

The price drop in this centralized procurement has exceeded the expectations of the National Healthcare Security Administration. Data provided by the administration shows that after this procurement, the price of stents has dropped from an average of around 13,000 yuan to around 700 yuan. Compared to 2019, the average price drop for the same products from the same companies is 93%, with domestic products averaging a 92% drop and imported products averaging a 95% drop. Based on the intended procurement volume, it is expected to save 10.9 billion yuan.

It is worth noting that the mainstream products commonly used in clinical settings have basically been selected, covering more than 70% of the intended procurement volume of medical institutions.

Professor Liu Zhaoping from the Cardiology Department of Peking University First Hospital said that the selected products basically cover the stents that are used more frequently in clinical practice, fully meeting clinical needs and patient demands.

At the procurement site, a medical representative remarked that the price for a single eyelash extension is now more than this.

Sun Feng, a distinguished researcher at the Peking University International Research Center for Pharmaceutical Management, analyzed that the current procurement prices only reflect the stent prices, excluding doctors' service fees, hospital venue fees, etc., representing two different pricing aspects.

Sun Feng hopes that through this price reduction, on one hand, it can reduce the burden on patients, and on the other hand, it can increase doctors' medical service fees, reflecting the value of doctors' labor, allowing them to have legitimate income, reducing the gray area in coronary stent sales, improving the quality of doctors' services, and promoting the healthy development of the pharmaceutical and medical device sales industry.

Zhong Dongbo, director of the Pharmaceutical Price and Tender Procurement Department of the National Healthcare Security Administration, believes that this centralized procurement not only helps pharmaceutical and medical device companies reduce circulation costs but also purifies the industry ecosystem.

From a regulatory perspective, the requirements for product quality will not be relaxed. 'The intensity of regulation will only strengthen compared to the past, not weaken,' said Zhang Tiejun, a member of the Party Leadership Group and deputy director of the Tianjin Healthcare Security Bureau, indicating that products will continue to maintain the original quality standards and levels.

Widely used in clinical applications

The most inflated part of the circulation process

Why can the price of coronary stents drop so dramatically? Industry insiders interviewed by the Legal Daily analyzed that the original prices had too much 'water content.' Some describe the 'water content' in high-value medical consumables as a towel in a basin of water—just lifting it makes it wet without needing to squeeze.

Random interviews conducted by the Legal Daily found that people's awareness of the term 'medical devices' is not very high, but they believe that medical devices are as indispensable as medicines.

Due to the low level of awareness, people often have no concept of the high prices of devices. In an era when medical reform had not yet started and the healthcare system was not yet sound, the prices of devices were even higher than those of medicines.

In recent years, several corruption cases in the medical field have revealed a 'black interest chain' in the circulation process—from manufacturers, intermediaries to related doctors, all of whom could be a link in the chain. For example, a certain department in a hospital illegally received kickbacks from suppliers multiple times, with a ratio of 30% for domestic consumables, 25% for imported consumables, 20% for joint spine consumables, and 30% for trauma consumables. These 'inflated prices' ultimately burden patients and the healthcare fund.

Taking coronary stents as an example, the most effective treatment for coronary heart disease is PCI (Percutaneous Coronary Intervention) surgery. The small and precise coronary stent is the most critical consumable in this surgery. The basic principle of PCI surgery is to implant the stent into the coronary artery, expanding the arterial wall to restore smooth blood flow.

The '2019 Report on Cardiovascular Health and Disease in China' shows that the number of cardiovascular disease patients in China has reached 330 million; from 2009 to 2019, the number of PCI surgeries for coronary heart disease in China increased from 230,000 to over 1 million, with an annual growth rate of 10% to 20%.

Huo Yong, vice chairman of the China Cardiovascular Health Alliance, publicly shared a set of data: In 2018, the total number of coronary heart disease interventional treatments in mainland China reached 915,256 cases, an increase of nearly 160,000 cases compared to 2017, with a compound annual growth rate of 15.03% over the past five years. With the rapid growth in the number of coronary heart disease interventions, people have raised higher demands for coronary stents. The price of domestic stents is about 8,000 to 12,000 yuan; the price of imported stents is about 18,000 to 20,000 yuan.

Although in recent years, stent surgeries can be partially reimbursed, the costs remain high for rural families.

Multiple cardiovascular disease experts told the Legal Daily that the production technology of domestic stents is now fully comparable to that of imported stents, so the vast majority of doctors will recommend domestic stents to patients, unless the stent model required by the patient is special or requested, in which case doctors will use imported stents.

The reason why the national healthcare department chose to first 'cut' the coronary stent in this centralized procurement is mainly because coronary stents are widely used in clinical applications and belong to a category of high-value consumables with significant 'water content,' said Wang Yue, a professor at the Peking University School of Humanities, in an interview with the Legal Daily.

It is understood that the cost of coronary stents is not high, and most of the 'markup' in the price, which often exceeds tens of thousands in medical institutions, is concentrated in the circulation link.

Zhong Dongbo once told the media: 'Although the average price of coronary stents is 13,000 yuan, the price packaged for agents is only a little over 2,000 yuan, and the middle part is entirely circulation costs. Now we are directly purchasing from production enterprises in large quantities, with clear usage expectations, so pharmaceutical and medical device companies do not need to promote. This saves money, and there is still a fair and reasonable profit margin for enterprises, which may even be higher than in general industries.'

Liu Xin, director of the Medical Law and Ethics Research Center at China University of Political Science and Law, also explained: 'The phenomenon of inflated medical device prices is quite common. Medical devices are used in small quantities and are market-priced, so it is more of an issue in the circulation field. The supply and demand for medical devices is unidirectional, and there is no market choice issue. Once medical devices enter hospitals, they need to use equipment for surgeries, and generally, having one or two manufacturers' devices is already impressive for hospitals.'

'Manufacturers produce a certain medical device, which is then wholesaled by intermediaries before finally entering hospitals. Therefore, in the intermediate link, the price markup by hospitals can be restricted, but other intermediate links are basically unregulated. Moreover, there are currently many intermediaries, each adding a markup, and many manufacturers may adopt some improper means for marketing, which drives up prices, resulting in a phenomenon of persistently high prices,' Liu Xin said.

Innovative products narrow the gap.

Domestic alternatives squeeze out excess.

It is worth noting that expensive high-value consumables are not limited to coronary stents; why have coronary stents become the 'pioneers' of national centralized procurement for consumables?

The answer to this question implies a key logic in the medical device industry: domestic substitution.

According to industry insiders, the market share of domestic stents now exceeds 75%, with four leading companies—Lepu Medical, MicroPort Medical, Jiewei Medical, and Sino Medical—occupying a large portion of the market, and the ratio is quite stable.

However, at the same time, most medical devices and consumables currently face technological monopolies and patent controls from foreign companies, leaving little choice for both regulatory bodies and downstream procurement. In specialized fields such as neurointerventional devices, surgical robots, and artificial joints, the ratio of domestic to imported products is almost reversed. In addition to consumables, the high-end medical equipment sector is also monopolized by foreign companies, with 80% of the CT market, 90% of the ultrasound equipment market, and 90% of the MRI equipment market occupied by foreign brands.

High-performance MRI imaging systems and high-end CT machines typically cost over 5 million yuan, and high-performance equipment means clearer images. In the diagnosis of diseases such as tumors, a higher clarity means being able to see more detailed human tissue information. A difference of dozens of pixels can affect a doctor's diagnosis of a disease.

'Currently, most consumables in our country can be domestically produced. Although there is still a certain gap in quality between domestic and imported products, we do not completely need to rely on foreign products; only some consumables may need to rely on foreign products. However, in recent years, companies should indeed focus more on product innovation rather than product promotion. Companies need to reduce costs through product innovation and narrow the gap between their products and imported products,' Wang Yue said, adding that this does not affect the pursuit of the lowest price, as drugs and consumables are too special and related to human life safety, and the quality of domestic drugs and consumables is uneven.

In recent years, relevant national departments have introduced a series of policies aimed at squeezing out the 'excess' in high-value medical consumables.

In Liu Xin's view, squeezing out the 'excess' in high-value medical consumables still faces difficulties, but it is not too hard.

'The current problem is to impose restrictions from hospitals, especially from the scope of medical insurance. The actions of the National Medical Insurance Administration this time can effectively squeeze out the 'excess', reduce prices, and create a virtuous cycle,' Liu Xin said. 'From a certain perspective, in the past, health administrative departments and drug regulatory departments may have been beneficiaries of the interests, so they would not promote the process. Now, because it involves medical insurance funds, the medical insurance department needs to take action on this cake.'

Liu Xin believes that this centralized bulk procurement is a good sign, and perhaps only through some administrative means of intervention can the 'excess' be squeezed out.

Regulate the development of medical devices.

Balance price and quality.

After the bid price for coronary stents was exposed, some stent manufacturers immediately told the media that coronary stents no longer belong to high-value consumable products, even stating, 'The original market size for in-hospital coronary stents was about 12 billion yuan, but this time, with bulk procurement, the market size has dropped to below 1 billion yuan. In the next five years, there may not be any innovative products in this market, as bulk procurement has squeezed out the 'excess' in the industry, and the current 'floor price' has not left any room for innovation.'

In response, Liu Xin expressed disagreement, saying, 'The high prices of medical devices are not enjoyed by the rights holders of medical devices. From the perspective of rights protection, stents are the same as other patented products; once the patent protection period is over, anyone can produce them. From this perspective, it has little to do with invention and creation. As long as there is still a patent protection mechanism, someone will invent and create.'

Wang Yue proposed another view: 'The price reduction brought by centralized procurement may lead to the reasonable profits of enterprises in innovation and research and development not being guaranteed. The government gathers a large number of procurement orders to exchange quantity for price, and enterprises often have no way to cope with this horizontal group procurement, either exiting the market or agreeing to low prices.'

Wang Yue further analyzed that the current chaos in the industry mainly involves commercial bribery, and the purpose of centralized procurement is to compress unreasonable costs. However, objectively speaking, the price reduction brought by centralized procurement may lead to the reasonable profits of enterprises in innovation and research and development not being guaranteed, so centralized procurement may not be the best procurement method, but there is currently no better solution, making it a second-best choice.

'Perhaps with the popularization of internet sales of drugs and consumables, there may gradually be a shift from centralized procurement to decentralized procurement. Once the inflated prices of drugs or equipment are suppressed in a short period, perhaps a transition from centralized procurement to decentralized procurement can find the best reasonable balance point for prices,' Wang Yue said.

Wang Yue believes that there is indeed a problem with domestic drugs and consumables, namely that if the government does not set centralized procurement prices, inflated prices will occur; if the centralized procurement price is too low, quality issues and stagnation in innovation may arise. Therefore, it is necessary to think about how to find a balance between the two.

Regarding the future path to breaking the high prices of medical devices, Liu Xin believes there are two aspects worth paying attention to:

First, hospitals need to return to their public welfare nature. Government-run medical institutions are non-profit medical institutions, but now these medical institutions are making profits under the guise of non-profit. Without government investment, if hospitals do not make a profit, they cannot pay their employees, so the government needs to provide subsidies for the medical industry.

Second, some other participation mechanisms can be used to restrict the circulation and production links, such as the bulk procurement by drug regulatory departments.

Wang Yue's suggestion is that in addition to managing the bribers, we must also manage the bribed. "The new Medical Practitioners Act has established a lifelong ban on practice for physicians. If someone is administratively punished or held criminally responsible due to commercial bribery, they will no longer be able to register as a doctor in the future. Once a license is revoked, it is permanently revoked, and they cannot engage in this profession again."

Wang Yue also mentioned that there is a polarization phenomenon in the income and treatment of medical personnel, with very high incomes for some and very low for others. The income gap among medical personnel should be significantly narrowed, especially between general practitioners and specialists.

"We should also encourage direct sales by companies, and even require manufacturing companies to sell directly, prohibiting the agency system. This would turn current pharmaceutical and consumable distributors into delivery companies, transferring all moral risks and legal responsibilities in the distribution process back to the manufacturing companies, which generally do not dare to engage in commercial bribery," said Wang Yue.

In addition, Wang Yue suggested establishing a blacklist system for companies, placing those involved in related bribery behaviors on the blacklist and prohibiting them from selling for several years.