Recently, the Fujian Provincial Medical Device and Pharmaceutical Co-Procurement Center released the "Inter-provincial Alliance Centralized Volume-based Procurement Documents for Cardiac Interventional Electrophysiological Medical Consumables".1number2File number, officially finalized27Provincial Alliance Cardiac Electrophysiology Centralized Procurement Plan.
How do you view the first centralized procurement of electrophysiology devices? Unlike other varieties with special attributes, cardiovascular diseases have a large patient base. From this perspective, will the price cut for stents continue after this centralized procurement? The electrophysiology field has long been dominated by imported brands. Is this centralized procurement conducive to promoting domestic substitution? In the long run, what benefits does the centralized procurement bring to the market? Frost & SullivanFrost & SullivanLiu Weiqi, Executive Director of Frost & Sullivan's Greater China Region, was interviewed by Huaxia Times to discuss the impact of the first centralized procurement of electrophysiological medical consumables on industry development.
Huaxia Times
Comprehensive Procurement Bidding for Coronary Stents23One month later, the large-scale centralized procurement of cardiovascular products also sounded the clarion call, with the Cardiac Electrophysiology Medical Consumables Alliance initiating its first centralized procurement.
Recently, the Fujian Provincial Medical Device and Pharmaceutical Co-ordination Procurement Center issued the "Inter-provincial Alliance Centralized Volume-based Procurement Document for Cardiac Interventional Electrophysiological Medical Consumables".1number2File number, officially finalized27Provincial Alliance Cardiac Electrophysiology Centralized Procurement Plan. Judging from the announcements issued at this stage, industry analysts generally predict that this centralized procurement will be more 'gentle' compared to previous coronary stent procurements. This statement comes from the detailed rules stipulated in the aforementioned documents, and companies are choosing to participate based on7fold/5Just fold it and you can win the bid.
In response, Liu Weiqi, Executive Director of Frost & Sullivan Greater China, told the Huaxia Times reporter, 'Although the patient base for electrophysiological consumables is vast, the overall penetration rate is low. Therefore, there is a significant gap in market size compared to coronary intervention. Considering the price reference set in this document, the demand for price cuts is stated as relatively mild, and it is expected that there will not be a repeat of the significant price cuts seen for coronary stents.'
"
The boots hit the ground
Recently, the Fujian Provincial Medical Device and Pharmaceutical Procurement Center released the "Interprovincial Alliance Centralized Volume-based Procurement Document for Cardiac Interventional Electrophysiology Medical Consumables." For electrophysiology companies, there have long been rumors about centralized procurement. With the release of this document, the long-awaited boots have finally landed.
It is reported that the scale of this electrophysiological medical consumables centralized procurement alliance is comparable to the "national procurement." Members include Fujian, Hebei, Shanxi, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Jiangsu, Zhejiang, Anhui, Jiangxi, Shandong, Henan, Hunan, Guangdong, Guangxi, Hainan, Chongqing, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, and the Xinjiang Production and Construction Corps.27province (region, municipality).
As of press time, the project has been launched, and procurement declaration documents have been released. An industry insider who wished to remain anonymous told The China Times that 'if this27If inter-provincial volume-based procurement can be successfully implemented, then the electrophysiology market will see new bidding, and patients will experience tangible benefits.
The above documents show that the procurement cycle for electrophysiology products is calculated from the actual execution date of the winning bid, in principle, as2Year. The procurement volume under the first-year agreement is in2023year4Implementation starts from the month following the announcement, with specific execution dates determined by each region of the alliance. After the procurement cycle for the first year ends, the renewal of agreements will be carried out based on comprehensive consideration of procurement usage, market supply, clinical needs, etc. In principle, the procurement volume for the second year's agreement shall not be less than the volume of the winning bid product's procurement volume in the previous year.
In addition, in terms of varieties, this centralized procurement covers a more comprehensive range, involving11There are several major varieties, including atrial septal puncture sheaths, electrophysiological catheter sheaths, atrial septal puncture needles, surface positioning reference electrodes, infusion lines, electro-positioning diagnostic catheters, magnetic-positioning diagnostic catheters, intracardiac ultrasound catheters, electro-positioning therapeutic catheters, magnetic-positioning therapeutic catheters, and cryotherapy catheters. These are products with high unit prices in the entire surgical process and are key targets for centralized procurement.
For the public, the focus of centralized procurement is always 'price cuts'. Although there has been no bidding for this round of centralized procurement, industry insiders have predicted a 'gentle' reduction in prices. The reason lies in the detailed rules contained in the document. On one hand, compared to previous procurement rules for high-value consumables such as coronary stents, this round's electrophysiological procurement rules are more comprehensive, divided into three major models: group procurement, single-piece procurement, and supporting procurement. On the other hand, the document provides guidance on prices, that is, enterprises can choose to...7fold/5You can win the bid by bidding at a reduced price. According to the document data, in the same group, the reduction rate ≥30%To obtain the qualification to be shortlisted, you need to7If you fold it, you can guarantee a middle selection. In the same group, if the decline is ≥50%, you can obtain the qualification to be shortlisted, that is, play5If you bid at a certain discount, you can guarantee a spot selection. In addition, the enterprise's quotation this time shall not be higher than the current valid provincial minimum online price for the same product nationwide, as well as the centralized procurement (including volume-based procurement) prices at the prefecture-level city (including alliances) and above.
This means that, under the above mechanism, as long as an enterprise reduces its price to the maximum declared price40%The following will enable you to win the bid.
"
Liu Weiqi stated, 'It is not difficult to see from this price reduction guidance rule that the enterprise's demand for price cuts this time is relatively mild. Therefore, I predict there will be no significant price cuts like those for coronary stents.'
"
Market reconstruction
"
In Liu Weiqi's view, centralized procurement is a redemption for the electrophysiology industry. 'At present, the penetration rate of electrophysiological surgeries in China is very low. Centralized procurement can reduce medical costs and help with healthcare cost control through insurance. At the same time, winning bid enterprises reduce channel expenses, enabling them to quickly establish market brand advantages and invest more fully in research and development, which is beneficial for the long-term development of the enterprise.'
In terms of electrophysiological consumables, the 'astronomical' prices deter patients. Magnetic positioning diagnostic catheters, electrophysiological treatment catheters, etc., are all in high-price segments, with mapping catheters costing several thousand yuan and ablation catheters reaching tens of thousands of yuan or more. In electrophysiological surgeries, atrial fibrillation, supraventricular tachycardia, and premature ventricular contractions are the three most common types of surgery. Taking atrial fibrillation, which accounts for a significant proportion of electrophysiology cases, as an example, the surgical cost is8ten thousand-10Ten thousand yuan.
Over time, the surgical penetration of electrophysiology has been overtaken by coronary stents. According to data from the Cardiovascular Alliance, as of now, the number of atrial fibrillation patients in China has reached2000ten thousand, and2019Annual surgical volume18Ten thousand cases, a year-on-year increase18.42%. in2020The number of catheter ablation surgeries in the year was only15Ten thousand cases. Comparing the number of coronary intervention surgeries, according to a report by Frost & Sullivan,2019In China, the number of coronary intervention surgeries reached10810,000,000, and in the same year, WHO statistics showed that the total number of coronary heart disease patients in China was approximately187ten thousand.
The core difficulty in reducing prices lies in two aspects: the surgical complexity and the high proportion of imported consumables.
Firstly, due to the complexity of electrophysiological surgery, it has not been included in centralized procurement for a long time. It is reported that unlike surgical suite products such as orthopedics, which are relatively fixed, the difficulty of electrophysiological surgery lies in dealing with different disease types and ablating different areas, requiring different products. Surgical suites need to be combined differently according to different disease types. This results in a more diverse range of instrument models used during surgeries for patients, thereby limiting the market size accordingly.
Secondly, in terms of the market, domestic electrophysiology has started relatively late, and the high-end sector is basically monopolized by foreign companies, which is not conducive to domestic brands occupying the market. According to Frost & Sullivan's statistical data,2020In [year], in the Chinese cardiac electrophysiological device market, the three giants - Johnson & Johnson, Abbott Laboratories, and Medtronic - together accounted for85%The above market share. The main domestic participants in cardiac electrophysiology include Minimally Invasive Electrophysiology, Xinuoop Medical, Jinjiang Electronics, and Huitai Medical, etc., but their combined share only accounts for9.6%Among them, Huitai Medical, which holds the largest share, only accounts for3%left and right.
If the price cut is moderate this time, it implies that the impact on imported brands will be smaller. So, after the winning bid results are announced, will there be a situation where domestic brands 'outperform' imported brands?
"
Liu Weiqi believes that 'this centralized procurement covers27In a province or city, if an enterprise's products win bids, it can quickly expand its market share. Looking at the selection rules, they seem to favor the lowest price, which has a very obvious promoting effect on domestic substitution.
From the perspective of enterprises, this round of rules is more about a sincere competition for price cuts. The selection rules demonstrate a 'price orientation' sincerity. That is, within the same bidding unit, rankings are determined based on the enterprise's price order, with the lowest declared price being ranked first, followed by the second-lowest, and so on. Additionally, if a declared enterprise does not obtain the intended selection qualification according to the proposed rules but the reduction is ≥50%Yes, you can also obtain the qualification to be shortlisted.
As more domestic medical device companies have started to enter the electrophysiology market in recent years, domestic enterprises have continuously strengthened their R&D efforts and made breakthroughs in core technologies. A new generation of high-quality companies such as MicroPort Medical, LeP Medical, Meizhong Shuanghe, Weixin Medical, Huitai Medical, Beijing Xianruida, and XinNOP have emerged one after another. Can they carve out a new territory through this centralized procurement? We will wait and see.
*This article is reprinted from China Times. Reporters: Guo Yilin, Yu Na Original title: Electrophysiology experiences its first alliance procurement. Can the 'gentle cut' boost domestic substitution? ">
