** Drug purchases account for up to 30% of expenditure

The number of medicines purchased by medical institutions will be greatly reduced. In September, the Jiangsu Provincial Health and Family Planning Commission issued a circular to publicly solicit the opinions of the "2015 Jiangsu Province Drug Centralized Purchasing Implementation Plan" (hereinafter referred to as the "Program"). The "plan" requires the medical institution's drug purchase budget to be generally not higher than 25%-30% of hospital operating expenses.

The “Programme” pointed out that the medical and health institutions shall formulate an annual procurement plan and budget no less than 80% of the actual use of drugs in the previous year, and be specific to the generic name, dosage form and specifications. The dosage form of each drug purchase shall not exceed 3 in principle. The corresponding specifications for each dosage form do not exceed two in principle. The procurement budget for medicines is generally no more than 25%-30% of hospital operating expenditures.

Priority will be given to medicines that meet the clinical pathways, include major disease safeguards, major new drug creation projects, and major public health projects, taking into account the needs of women, elderly, and children and other special groups, and link up with Medicare and New Rural Cooperative reimbursement policies. The medical institutions above Grade 2 must combine their own requirements for procurement of medicines and the ratio of basic medicines for 2014, and reasonably forecast the quantity of drug purchases within the procurement cycle, and report them to the municipal health and family planning administrative department for review and summary.

Hospital drug purchase expenditures must not exceed 25%-30% of hospital operating expenses. This is actually the "misuse drug" that controls hospitals. This specific ratio was also proposed for the first time. Professor Lu Yu, director of the Pharmacy Department of the No. 454 Hospital of the People's Liberation Army, told reporters that this was echoed by the “Opinions on Further Strengthening the Irrational Growth of Medical Management Costs in Public Hospitals” issued by Jiangsu Health and Family Planning Commission. The ratio of drug revenue to total business income (excluding Chinese Herbal Medicines) in public general hospitals of Grade 2 or above in the province is controlled at about 40%, and by the end of 2017, efforts will be reduced to about 30%.

"Specifically, the generic name, dosage form and specifications should not exceed 3 in principle for the formulation of each drug purchase, and the corresponding specifications for each dosage form should not exceed 2 in principle," as was previously stated. This is mainly from controlling doctors to “discriminate drugs” and considering the safety certification of drugs. What kind of drugs can be used, and what kind of side reactions will be more difficult to control. In addition, in terms of convenience in procurement, the fewer species, the more convenient centralized procurement.