CHINA

Analysis: China’s Rock Bottom Drug Prices Spark Quality Concerns

By Zhou Xinda, Cui Xiaotian, Jiang Moting and Kelly Wang

Published: Feb. 5, 2025 9:15 a.m. GMT+8

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Collection of drugs sales counter. Photo: Weihai Medical Security Bureau

In a bid to lower the prices the Chinese state and public pay for medicines, Beijing implemented its centralized procurement policy in 2018. Under this system, the drugs are included by China’s state-run health care insurance and negotiated on a national basis.

Ever since, it’s been fiercely debated whether or not the hard bargains driven by the government undermine drugs’ quality.

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China's centralized procurement policy, implemented in 2018, aims to reduce drug prices through national negotiations, with recent rounds cutting prices by over 70%.
Concerns about drug quality and efficacy have been raised by medical professionals, suggesting the need for higher quality standards, stricter supervision, and better feedback systems.
Imported brand-name drugs are being sidelined in favor of cheaper local options due to government policies, prompting calls for wider insurance coverage for innovative drugs.

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Who’s Who

Tailin Investment: Tailin Investment is mentioned in the article in relation to Wang Yu, who is a partner there with extensive experience in the pharmaceutical industry. He suggests that the NHSA should assume greater responsibility for ensuring drug quality in the procurement process.

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What Happened When

2018：: Beijing implemented its centralized procurement policy to lower medicine prices.

Late last year：: The most recent procurement round concluded, resulting in some drug prices being slashed by over 70%.

January 2025：: The NHSA announced that the centralized procurement policy saved around 440 billion yuan ($60.5 billion) from the health insurance fund since 2018.

Mid-January 2025：: 20 members of Shanghai's political consultative body raised concerns about the efficacy of centrally procured drugs.

Jan. 21, 2025：: The National Healthcare Security Administration and other regulatory bodies visited Shanghai to gather feedback on the procurement policy.

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