As one of the first pilot provinces for healthcare reform in China, Fujian Province has actively promoted reforms in the procurement of medical devices and drugs, focusing on addressing the issue of long payment settlement cycles for pharmaceutical companies. In 2017, Fujian Province explores the establishment of a medical insurance proxy settlement mechanism for medical device and drug payments. This mechanism involves the medical insurance settlement department acting as an intermediary to settle drug payments between hospitals and medical device and drug supply firms. The settlement scope gradually expanded from drugs to medical consumables of centralized procurement, compressing the payment recovery cycle for medical device and drug supply companies to within 23 working days. This reform has resolved bottlenecks and difficulties in the payment settlement process, alleviating concerns over advance payment for enterprises, effectively optimizing the business environment, and promoting the formation of a well-regulated procurement and supply ecosystem for medical devices and drugs. Based on dimensions of government governance, structural reform, and the establishment and improvement of the medical insurance settlement system, this study aims at analyzing the construction mechanism and operational effects of Fujian Province's reform through semi-structured interviews and surveys with pharmaceutical firms and medical equipment supply firms. The study indicates that Fujian Province's reform, by reducing information asymmetry and transaction costs through proactive government actions, benefits all stakeholders, shortens the payment recovery cycle for medical device and drug supply companies, resolves the "last mile" problem in logistics and promotes high-quality development of the pharmaceutical industry. This case exemplifies the coordinated development and regulation of medical insurance, medical services, and pharmaceuticals.