ABSTRACT
In this study, the evolution of the centralized drug procurement policy and the logical relationship between drug procurement policy and medical insurance payment policy were explored by means of policy and literature review.This paper first examined the three stages of the centralized drug procurement policy, and especially analyzed the characteristics and trends of the current centralized bidding of drugs.Focus was put on the relationship of between the centralized drug procurement and medical insurance drug payment were then explored, and the practical feasibility to solve the drug problem with the help of supporting reforms of the above two systems.As a result, the study found that centralized drug bidding procurement has evolved into negotiation and the lowest price linkage procurement method under the price control of the provincial platform and it could also provide the basis for the formation of medical insurance payment standard of generic drugs.But the functions of National Drug negotiations and the Provincial Health Insurance negotiations overlapped.Fortunately, the drug bidding procurement, medical Insurance payment and other related institutional arrangements could promote the separation of pharmacy from medicine which is likely to provide a solution to the issue of unrealistic drug prices with the support of other coordinated sets of reforms.