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China's first central procurement program for hip and knee replacements has led to average price cuts of about 82 percent, officials said, citing initial results from bidding that closed on Tuesday.
Gao Xue, an official at a national office that administers the bulk-buying program for high-value medical products, said 48 companies making artificial hips or knees had participated in the bidding, which was held in Tianjin on Tuesday morning.
Forty-four had at least one product selected, including 30 domestic and 14 foreign firms.
Gao said the success rates of Chinese and foreign companies were nearly identical.
The initial bidding results show that the average price of selected hip implants will drop from 35,000 yuan ($5,430) to about 7,000 yuan, and the average for selected knee implants will fall from 32,000 yuan to 5,000 yuan, the office said.
The central procurement office said the program aims to purchase 540,000 artificial joints at the heavily discounted prices in the first year, equivalent to 90 percent of the demand from medical institutions across China.
Gao said the public is expected to have access to them in March.
Last year, public hospitals in the country spent about 20 billion yuan procuring hip or knee implants, accounting for over 10 percent of China's high-value medical consumables market.
It is the second time that China's centralized procurement program in the healthcare sector has focused on medical devices.
In November, makers of cardiac stents slashed their prices by an average of 93 percent to be included in the national bulk-buying program.
Experts said the steep price cuts for artificial joints are expected to rein in disorderly competition in the sector and reduce the financial burden on patients.
Wu Ming, assistant dean at Peking University Health Science Center and a health policy expert, said the bidding rules were upgraded and tailored to orthopedic procedures.
One feature of joint-replacement surgeries is that device makers will provide additional training and guidance to medical workers on their products and charge for such services.
During the bidding, all participating firms were required to report not only the total listed price, but also the prices of key units and accompanying services.
"Clinical demands for different products have also been taken into consideration," Wu said.
"The goal is to promote orderly competition between businesses and curb inflated prices."
China is facing the challenge of a rapidly aging population, potentially boosting demand for joint-replacement surgeries as a means to restore mobility and relieve pain for the elderly.
Wang Weiguo, a senior orthopedist at China-Japan Friendship Hospital in Beijing, said joint-replacement surgeries are very complicated and usually the last resort for patients suffering from severe joint illnesses.
Due to the high cost of artificial implants, he said many patients have delayed or abandoned plans to receive a hip or knee implant.
"The new price cut will bring enormous benefits for them," he said.
After witnessing the bidding in Tianjin, Wang said a lot of manufacturers had offered their topnotch or bestselling devices during bidding and their quoted prices were mostly reasonable.
To cope with a possible spike in demand for selected products, Gao said authorities will set up an online system to track the supply chain for artificial joints and aggregate information on manufacturers, sellers, hospitals and patients.
"If a shortage occurs, the system will send a prompt alert," he said.