Taiyuan, China – 17 Sep 2026 – The Shanxi Provincial Healthcare Security Bureau (Jin Yi Bao Han [2026] No. 72) notified that, effective 15 October 2026, the province will uniformly implement the winning results of the National Traditional Chinese Patent Medicines (TCM) Procurement Alliance’s Fourth Batch centralized procurement (ZCYLM‑2026‑1) and Second Batch follow‑up procurement (ZCYLM‑2026‑2), covering all public medical institutions — including military hospitals — plus participating insurance‑designated private institutions and pharmacies, under a procurement cycle running to 31 December 2028.
Implementation Snapshot
| Item | Detail |
|---|---|
| Authority | Shanxi Provincial Healthcare Security Bureau, China |
| Document | Jin Yi Bao Han [2026] No. 72 – Notice on implementing national TCM alliance winning results |
| Batches | National TCM Procurement Alliance Fourth Batch (ZCYLM‑2026‑1) and Second Batch follow‑up (ZCYLM‑2026‑2) |
| Institutional Scope | All provincial public medical institutions (incl. military), participating insurance‑designated private institutions and designated pharmacies |
| Execution Date | 15 October 2026, province‑wide |
| Procurement Cycle | 15 Oct 2026 – 31 Dec 2028; first year through 14 Oct 2027; agreements signed annually, renewal volumes in principle no less than prior year |
| Supply Rule | Winning enterprises supply at winning prices beyond agreed volumes until cycle expiry |
Price Execution & Platform Measures
- Listing & Tripartite Agreements: The provincial drug and device procurement center will list winning products at winning prices and organize tripartite contracts among winning manufacturers, distributors and medical institutions per volume‑based procurement (VBP) rules.
- Listing Suspensions: Within the same procurement group (administration route), products already listed provincially but not declared in winning enterprises’ “supply lists” will be suspended from listing — except products containing both natural bezoar and natural musk.
- Price Risk Flags: Non‑winning products, and natural bezoar/musk products outside winning supply lists, will carry price risk warning markers on the platform.
Usage, Assessment & Monitoring Requirements
- Rational Use Mandate: Medical institutions must prioritize winning products and fulfill agreed volumes, while avoiding concentrated bulk purchasing of winners and any “one‑size‑fits‑all” cutoff of non‑winning products; where winning products force brand switches for patients, dedicated department and staff training plus patient explanation work is required.
- Assessment Design: Winning‑product procurement and use enter institutional performance assessments; non‑winning products priced below the lowest winning price are excluded from execution assessment; drug volumes in special‑need and international medical services (outside basic insurance payment) are excluded from monitoring; same‑name/dosage/specification products of one winning enterprise with compliant price differentials across package sizes may be assessed on a merged basis — a rule extendable to other national TCM alliance batches.
- Supply & Compliance Monitoring: Insurance departments will monitor winning‑enterprise supply and hospital execution, using reminders and accountability interviews for supply shortfalls, with escalation reporting for major quality or supply problems; institutions showing below‑schedule progress, markedly low winning‑product share, or “buying high, not low” will face notification, with further measures for inadequate rectification.
- Policy Coordination: Procurement, supply assurance, payment settlement, insurance reimbursement and quality management responsibilities are assigned across relevant units to ensure the results take full effect.
Sector Background
- National TCM Alliance: Led cross‑province centralized procurement of traditional Chinese patent medicines, extending VBP beyond chemical drugs into the TCM segment — one of China’s largest pharmaceutical categories by prescription volume.
- Follow‑up (接续) Procurement: Successor rounds that re‑tender expiring batch agreements, stabilizing prices and supply continuity for previously procured products.
- Supply‑List Mechanism: Winning enterprises declare distributable product lists that determine which comparable items remain listed — a lever to steer hospital purchasing toward winners without formally banning alternatives.
Market Impact & Outlook
- Price Reset for TCM Makers: From 15 October, winning manufacturers gain contracted volume across Shanxi at alliance‑set prices, while non‑winners face platform flags or suspension — reshaping competitive positions per procurement group.
- Volume Security for Winners: The “winning price applies beyond agreed volumes until cycle end” clause protects hospitals’ upside demand without further negotiation, and annual renewals anchored at no‑less‑than‑prior volumes give winners multi‑year visibility.
- Compliance Watchpoints: Distributors and manufacturers should verify supply‑list inclusion, prepare tripartite contracts, and track the natural bezoar/musk exemption — the notable carve‑out reflecting scarcity‑driven pricing in premium TCM materials.
- Replication Signal: The merged‑assessment approach and its extension to other alliance batches may preview softer, more practical execution metrics for TCM VBP nationwide.
Forward‑Looking Statements
This brief contains forward‑looking statements regarding the implementation of national TCM alliance procurement results in Shanxi, including price adjustments, listing actions and procurement volumes. Actual execution depends on platform operations, enterprise supply performance, institutional compliance and assessment outcomes, and may differ materially from current expectations.-China Health Reform Pulse
Policy Source: https://ybj.shanxi.gov.cn/xxfb/xxgkml/202609/t20260918_10222979.html