Removal of the ‘Two-invoice System’ in Medical Device Distribution

Background

The ‘two-invoice system’ is a set of regulations that limits the number of distributors. A manufacturer sells its products to a distributor (first invoice), with the distributor then selling directly to the hospital (second invoice). According to the ‘two-invoice system’, secondary distributors are not permitted, despite the fact that local distributors of medical devices provide a valuable service to hospitals, including training, commissioning of devices necessary for surgery, maintenance and repair.

There was no central policy related the ‘two-invoice system’ for medical devices, instead the policies were promulgated by the health authorities of provinces or cities piloting healthcare reforms.

Result

Originally, several provincial and municipal health authorities planned to introduce the ‘two-invoice system’ for disposable medical devices. After the Healthcare Equipment (HCE) Working Group presented its arguments to local health authorities in favour of rescinding the ‘two-invoice system’, two provinces and two tier-1 cities abandoned the ‘two-invoice system’ for medical devices, allowing medical device distributors to select the most suitable distributors and ensure optimal service for hospitals. So far, most other provinces and cities have not promulgated plans for a ‘two-invoice system’ for medical devices.

Impact