Second-round price negotiation of drugs following centralized procurement ("Price Renegotiation") was bound to be controversial from its inception.
From the opponents' point of view, Price Renegotiation has no merit: it reduces the credibility of provincial bid invitations, violates the Bidding Law, breeds corruption and unhealthy practices within medical institutions, adds to sales costs and expenses, and reduces profit margins for drug manufacturers, gives rise to inconsistent regional purchase prices, creates disorderly market competition, and results in a decreased quantity of drugs.
From the supporters' point of view, the benefits of Price Renegotiation far outweigh any drawbacks: it solves the problem of widespread drug price cuts, restores market bargaining power to both hospitals pharmaceutical companies, brings transparency to drug purchase discounts offered to medical institutions, reduces the opportunity for doctors to collect kickbacks, efficiently solves the chronic problem of commercial bribery, lightens financial burdens of local governments, and promotes the reform of centralized drug procurement ("Centralized Procurement").
