Procurement is a crucial part of hospital operation. Procurement is related to a large amount of working capital and hospital resources. The quality of medical equipment also affects the service standard and reputation of the hospital. In the absence of effective internal management system, supervision mechanism and compliance awareness, it is easy to breed illegal behaviors such as black box operation and corruption in the procurement process, which will involve the hospital in civil disputes and even be punished by the competent authority, seriously affecting the image and development of the hospital. This article will combine the civil, administrative and criminal cases related to the procurement of medical institutions, from the establishment of pharmaceutical management organization, medical consumables management organization and the formulation of procurement catalogue, to the unified procurement of pharmaceutical department and medical consumables management department, and then to the signing of procurement contracts with selected suppliers, explain the normal process and existing compliance problems of procurement, and share our suggestions.

[case] (2021) Yue 0104 min Chu No. 38774 case 1

This is a typical medical device purchase contract dispute. A hospital in Guangdong Province had a sales contract dispute with a medical device sales company. In this case, the plaintiff's medical device sales company had a medical device supply relationship with the defendant's hospital. The plaintiff supplied test kits and other test products in batches for many times. After receiving the goods, the hospital staff signed them. After receiving the invoice issued by the plaintiff, it was also used for financial bookkeeping and cost deduction, but the payment for goods has not been paid. The plaintiff claimed that the hospital should be liable for breach of contract according to the relationship of the sales contract.

The hospital protested that the sales contract relationship was not established, and put forward the following reasons:

1. The purchasing agent's agency right is defective. The behavior of individual staff and business departments cannot represent the hospital, and the hospital has neither authorized in advance nor ratified afterwards.

2. The procurement procedure does not conform to the internal norms of the hospital. The hospital's purchase management system for medical consumables clearly stipulates that consumables should be purchased according to the plan. The medical consumables management committee determines the supply catalogue of medical consumables. The medical consumables purchase Supervision Committee under the medical consumables management committee organizes experts to conduct centralized evaluation and selection, and signs the medical consumables purchase and sales contract after selecting the winning enterprise. The plaintiff did not have the bid winning information of the medical supplier or the purchase contract.

In this regard, the court held that the hospital did not raise an objection to the plaintiff and the hospital staff's signing for the goods within a year of the plaintiff's supply, which should be regarded as recognition of the establishment of the legal relationship of the sales contract and the way of performance. Even if the hospital has internal management regulations, the failure of employees to handle warehousing and use according to the hospital management specifications after signing does not constitute a reason for refusing to pay for goods.

From the reply opinions of the hospital in the above case, we can see several keywords: "management committee", "supply catalogue" and "procurement procedure". Therefore, let's take a look at the normal procurement process of the hospital.

1、 Normal process of hospital purchasing drugs and equipment

（1） Establish a special pharmaceutical management organization and medical consumables management organization according to law and formulate a procurement catalogue

According to Article 7 of the provisions on the administration of pharmaceutical affairs in medical institutions (wyzf [2011] No. 11) (hereinafter referred to as the "provisions on the administration of pharmaceutical affairs"), it is stipulated that "hospitals at or above the second level should set up pharmaceutical affairs management and pharmacotherapeutics committees; other medical institutions should set up pharmaceutical affairs management and pharmacotherapeutics groups", Article 7 of the measures for the management of medical consumables in medical institutions (Trial) (gwyf [2019] No. 43) (hereinafter referred to as the "measures for the management of consumables") stipulates that "hospitals above the second level should establish a medical consumables management committee; other medical institutions should establish a medical consumables management organization", and hospitals at different levels should set up management committees or management organizations for drugs and medical consumables respectively.

Article 7 of the provisions on the administration of pharmaceutical affairs and Article 7 of the measures for the administration of consumables also stipulate the composition of the personnel of the management committee or management organization. For example, the members of the pharmaceutical administration and pharmacotherapeutics Committee of hospitals at or above the second level "are composed of pharmaceutical, clinical medicine, nursing, hospital infection management, medical administration and other personnel with senior technical qualifications"; The pharmacy management and pharmacotherapy group "is composed of heads of departments such as pharmacy, medical affairs, nursing, hospital infection, clinical departments and personnel with professional and technical qualifications above pharmacist and physician"; The medical consumables management committee is "composed of the personnel of relevant clinical departments, pharmacy, medical engineering, nursing, medical technology departments with senior technical qualifications, as well as the heads of hospital infection management, medical consumables management, medical management, financial management, medical insurance management, information management, discipline inspection and supervision, audit and other departments."

According to Article 9 of the provisions on pharmaceutical administration and Article 9 of the measures for the administration of consumables, the pharmaceutical administration and pharmacotherapeutics Committee (Group) and the medical consumables management organization are responsible for establishing the selection system of drugs and medical consumables, and formulating the basic drug supply catalogue and medical consumables supply catalogue of the institution. Medical institutions shall formulate the catalogue of essential drugs supply in accordance with the national catalogue of essential drugs, prescription management measures, national prescription collection, and quality management norms for drug procurement and supply; The medical consumables supply catalogue of the institution is selected from the centralized procurement catalogue of medical consumables that have been included in the national or provincial and municipal medical consumables.

（2） Pharmaceutical department and medical consumables management department purchase uniformly (taking bidding as an example)

All public medical institutions should participate in the centralized procurement of drugs, high-value medical consumables and medical devices. For drugs, the corresponding centralized procurement method shall be adopted according to the number of shortlisted manufacturers of each drug: if there are 3 or more shortlisted manufacturers, the bidding procurement method shall be adopted; If there are two shortlisted production enterprises, the method of negotiated purchase shall be adopted; If there is only one shortlisted production enterprise, negotiation and procurement shall be adopted. In terms of medical devices, the centralized procurement method is mainly public bidding. Private hospitals do not have to purchase by bidding, but at present, the scope of centralized purchase of drugs and consumables is also expanding to private hospitals, especially non-profit private hospitals.

According to Article 25 of the provisions on the administration of pharmaceutical affairs and Article 15 of the measures for the administration of consumables, drugs and medical consumables for clinical use should be purchased uniformly by the pharmaceutical department and the medical consumables management department respectively. Other departments, departments or medical personnel should not carry out the above purchase activities, and medical institutions should not use drugs and consumables that are not purchased and supplied by the pharmaceutical department and the medical consumables management department. The pharmaceutical department is different from the pharmaceutical management organization. Article 11 of the pharmaceutical management regulations stipulates that "tertiary hospitals set up pharmaceutical departments, and secondary departments can be set up according to the actual situation; secondary hospitals set up pharmaceutical departments; other medical institutions set up pharmacies"; According to Article 5 of the consumables management measures, medical institutions should designate specific departments as the management departments of medical consumables, responsible for the daily management of the purchase of medical consumables.

According to Articles 22 and 32 of the bidding law, during the bidding process, the tenderee shall not disclose to anyone the information of potential bidders and the information that may affect fair competition, and shall not collude with bidders in bidding. For example, the bidder offers bribes to the staff responsible for bidding in medical institutions, and the staff discloses key information, or colludes with the bidder to set bidding parameters according to the equipment parameters provided by the bidder, so as to eliminate competitors, improve the probability of winning the bid, and even "internally determine" the winning bidder. According to Article 51 of the bidding law, if medical institutions restrict or exclude potential bidders with unreasonable conditions, implement differential and discriminatory treatment to potential bidders, or restrict competition among bidders, they may be ordered by the competent authority to make corrections and be fined not less than 10000 yuan but not more than 50000 yuan. If a bidder colludes with a potential bidder and damages the interests of other bidders, which constitutes the crime of collusive bidding, he may be sentenced to fixed-term imprisonment of not more than three years or criminal detention and may also or only be fined according to Article 223 of the criminal law of the people's Republic of China.

From the formulation of the procurement catalogue to the bidding process, the law imposes many restrictions on the procurement process of medical institutions. In practice, those who collude in bidding, accompany bidding, or seek to win the bid by bribery in the bidding process may be punished by administrative organs. The objects of punishment include medical institutions, medical device companies, medical technology companies, pharmaceutical companies, etc. For example, in the case of a Shanghai Pharmaceutical technology company suspected of commercial bribery, the party concerned was found to have engaged in unfair competition and colluded in the bidding process of a testing reagent project, and was fined a total of 130000 yuan, and the illegal income confiscated exceeded 680000 yuan; In the case of alleged unfair competition of a pharmaceutical technology company in Shanghai, the Shanghai General Supervision Office [2021] No. 322020000392, the Municipal Supervision Bureau determined that the party concerned had offered bribes to a hospital staff and successfully won the bid in the consumables bidding project, and was fined 1.95 million yuan.

If you violate the regulations in the bidding process, and the circumstances are serious enough to constitute the crime of collusion in bidding, you may also be subject to criminal punishment. In the case of collusive bidding (2012) cjcz No. 91 4 by Shanghai a Biotechnology Co., Ltd., Shanghai B Medical Devices Co., Ltd. and Xu, the defendant a and company B, as affiliated enterprises, colluded with each other in the bidding process, forged materials and took deceptive means to bid. The defendant Xu, as the legal representative of company a, obtained the bidding qualification for the above companies, making only three bidding companies sign up under the unified will, Lack of competition constitutes the crime of collusive bidding. The company was fined 20000 yuan, Xu was sentenced to one year in prison, suspended for one year, and fined 10000 yuan.

（3） Sign purchase contract

After determining the supplier, the medical institution should sign a purchase contract with the supplier, otherwise there may be a dispute over the establishment of the purchase and sale relationship due to the failure to sign the contract in the first case. When formulating the purchase contract, we should pay attention to the purchase plan, formulate a reasonable purchase quantity according to the inventory information, and clarify the purchase quantity, specification, model and purpose. According to the relevant provisions of the state on the purchase and use of drugs and equipment by medical institutions, strict agreements should be made in the purchase contract on product quality requirements, incoming inspection and acceptance, and suppliers are required to provide production and business licenses, relevant registration certificates, inspection certificates, production approvals, etc. of purchased products to ensure the purchase of qualified products.

In addition, according to Article 6 of the provisions on the establishment of bad records of commercial bribery in the field of pharmaceutical purchase and sale (Guo Wei FA Fa [2013] No. 50), when signing purchase contracts for drugs, medical equipment and medical consumables, medical and health institutions should also sign honest purchase and sale contracts, stipulating that commercial bribery is not allowed, otherwise they will be included in bad records and other provisions.

2、 Compliance recommendations

Combined with the above provisions and punishment cases, we suggest that medical institutions pay attention to the compliance of the procurement process from the following three aspects:

1. Establish a special pharmaceutical management organization and medical consumables management organization according to law. Establish a selection system for drugs and medical consumables, and prepare the basic drug supply catalogue and medical consumables supply catalogue of the institution according to relevant regulations.

2. The pharmaceutical department and medical consumables management department shall implement unified management of procurement and supply affairs. If medical institutions purchase by bidding, the institutions and procedures for bid evaluation and award shall meet the requirements. More importantly, the procurement process should not accept commercial bribes from suppliers, should not negotiate pricing with suppliers before bidding, exclude opportunities for fair competition from other suppliers, and should avoid illegal phenomena such as collusion.

3. Sign the purchase contract. To avoid disputes, medical institutions should sign purchase contracts and incorruptible purchase and sales contracts with suppliers selected according to relevant procedures. In addition to strictly reviewing the supplier's qualification, the purchase of drugs and equipment should ask for invoices, verify the invoices, the supplier's accompanying documents and the actual purchased varieties, specifications, quantities, etc., otherwise they cannot be accepted and warehoused.

In addition to many compliance issues involved in the procurement process, medical institutions should also pay attention to whether the purchased drugs and medical devices have the qualifications prescribed by law, and implement the inspection and acceptance system for the purchase of drugs and devices. Please pay attention to the third of our series: "access and compliance of medical products".