Opinions of the General Office of the State Council on Improving the National Essential Drug System (Guo Ban Fa [2018] No. 88) (Mainland China)

Karl Zhang

To more thoroughly implement the deployment requirements of the National Health and Wellness Conference and the Healthy China 2030 Plan Outline and the deepening reformation of the medical and health system, as well as to further improve the national essential drug system, the General Office of the State Council issued the Opinions on Improving the National Essential Drug System (the “Opinions”).  The Opinions primarily cover the dynamic adjustment and optimization of the essential drugs index, more protection for the production and supply process, widespread distribution and priority usage, the reduction of the shared cost burdens on the people, and improvement on quality and safety of the drugs.  Please see below for details:

1. Dynamic adjustment and optimization of the essential drugs list

The Opinions state that with respect to the dynamic adjustment and optimization of the essential drugs list, the drug selection must first be appropriate with basic medical needs.  Secondly, the selection and adjustment process for the essential drugs list need to be optimized, and the list should be periodically evaluated and dynamically adjusted by generally considering factors such as clinical drug application practices, drug standard changes, and marketing of new drugs; in principle, the adjustment cycle should not exceed three years.  For drugs that have been newly approved for market launch, and drugs that demonstrate a clear therapeutic improvement from those available on the market and are available at a reasonable price may proceed with the adjustment for inclusion procedure at an appropriate time.  Equal emphasis should be placed on both adding and removal of drugs from the list, and priority shall be given to adding drugs with clear evidence of efficacy, safety and a significant cost-benefit ratio.  The focus shall be on removing drugs that are no longer on the market, have relatively more reports of serious side effects, have been assessed as no longer appropriate as an essential drug, or those with substitutes that have a higher risk-benefit ratio or cost-benefit ratio.  In principle, no region will be adding drugs, and regions with minority groups may add a small number of ethnic drugs.

2. More protection for the production and supply process

With respect to the issue of drug supply, the Opinions indicate that, first, it is necessary to improve the effective supply capacity, designate the implementation of the essential drug system as an important part of improving the pharmaceutical industry policies and the development plans for the industry, encourage technological progress and transformation in the industry, promote the establishment of a production quality system in line with the advanced international norms by dominant enterprises, and enhance the production and supply capacity for essential drugs.  Second, it is necessary to improve the procurement and distribution mechanisms, fully consider the special commodity characteristics of drugs, give play to the role of the government and the market, adhere to centralized procurement, implement a drug procurement classification that may lead to reasonable prices.  Third, it is necessary to strengthen the early warning for and responses to shortages, establish and improve the national drug shortage monitoring and early warning system, strengthen the research and development, production and distribution of drugs, use multi-source information collection to accelerate the realization of direct reporting via a drug shortage information network for all levels of medical institutions, track and monitor the supply sources of active pharmaceutical ingredients, enterprise inventory and market trading behavior, comprehensively determine the potential shortage factors and trends, identify shortage risks as early as possible, and classify and deal with different shortage causes.

3. Widespread distribution and priority usage

With respect to drug supply and use, the Opinions point out that, first, the management of supply and use should be strengthened with maintain the dominant position of essential drugs, enhance the usage management of essential drugs by medical institutions, calculate the usage percentage of essential drugs for public medical institutions by province, and continuously improve the usage quantity of essential drugs by medical institutions.  Second, it is necessary to establish priority usage incentive mechanisms by having medical institutions establish usage indicators for essential drug use in clinical departments, which should be included as part of the review process so as to guide medical institutions and medical practitioners to conduct reasonable diagnosis and drug use.  Third, it is necessary to monitor clinical use by focusing on the monitoring of information such as the types of essential drugs supplied to medical institutions, the usage quantities, the purchase prices, their supply and distribution and whether prescription drug usage is in compliance with medical treatment standards.

4. Reduction of the shared cost burdens on the people

For reducing the drug cost burdens on the public, the Opinions mentioned that it is necessary to gradually improve the actual level of protection and explore effective ways to reduce the burden on patients.  Also, it is necessary to encourage local governments to organically combine the essential drug system with the graded medical treatment system, family doctor contract services, and health management for chronic diseases.  In the management of chronic diseases such as hypertension, diabetes, and severe mental disorders, priority should be given to the use of essential drugs as long as efficacy is ensured so as to minimize the drug costs of patients and enhance the sense of gain among the people.

5. Improvement on quality and safety levels

With respect to drug quality, the Opinions pointed out that on the one hand, it is necessary to strengthen quality and safety supervision, conduct full-scale random inspection of essential drugs, publicly announce the results of such inspection in a timely manner, and encourage enterprises to conduct post-market launch monitoring of essential drugs.  On the other hand, it is essential to promote the evaluation for consistency in the quality and efficacy of generic drugs; those that have passed the consistency evaluation are preferentially included in the essential drugs index, and enterprises are encouraged to conduct consistency evaluations of generic drugs that have already been included on that list.

In general, the Opinions put forward certain improvement mechanisms to address issues such as incomplete ability to meet clinical essential drug demands, a lack of use incentive mechanism, differences between the quality of generics and original drugs, and imperfect supply mechanisms.  For pharmaceutical manufacturers, this may present a more stringent regulatory environment, or it may translate into more business opportunities.