China Eases Drug Procurement Rules, Keeps Winning Bids Secret
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China has tweaked the rules for its massive volume-based drug procurement program and, for the first time, has not publicly disclosed the winning prices, signaling a policy shift aimed at easing the fierce price wars that have defined the system.
The changes were implemented during the 11th round of the national volume-based procurement (VBP), which concluded in Shanghai on Oct. 28. This round covered 55 drug varieties across fields including anti-infectives, anti-tumor treatments, and allergy medications, and saw 453 products from 272 companies win bids. The VBP system has been a cornerstone of China’s health care reform since 2018, using the government’s collective bargaining power to slash drug prices, but it has also fueled criticism over excessive competition and fears of companies bidding below their production costs.
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- China’s 11th round of national drug procurement covered 55 drugs, with 453 products from 272 companies winning bids, but for the first time, winning prices were not publicly disclosed.
- Rule changes aim to reduce fierce price competition, including a "resurrection" mechanism, lower purchase obligations for hospitals, and requirements to justify bids 50% below benchmarks.
- Major firms like Yichang HEC (Oseltamivir) and AstraZeneca (Farxiga) lost key bids; 77% of hospitals now request drugs by brand.
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Who’s Who
- Yichang HEC Changjiang Pharmaceutical Co.Ltd.
- Yichang HEC Changjiang Pharmaceutical Co.Ltd. (宜昌人福药业有限责任公司) experienced a setback when its flu drug Oseltamivir failed to secure a contract in China's 11th VBP round. This drug represented a significant portion (64.2%) of the company's 2024 revenue. This failure led to concerns about the company's future performance and a dip in its stock prices.
- Hunan Huize Pharmaceutical
- Hunan Huize Pharmaceutical (湖南华泽制药有限公司) successfully secured a contract in the 11th round of China's national volume-based procurement. Their bid, along with Chengdu First Pharmaceutical's, was selected for the blockbuster flu drug Oseltamivir, displacing Yichang HEC Changjiang Pharmaceutical Co. Ltd. This highlights their competitive edge in the Chinese pharmaceutical market.
- Chengdu First Pharmaceutical
- Chengdu First Pharmaceutical secured a contract in China's 11th round of national volume-based procurement for its flu drug, which indicates a successful bid in the highly competitive pharmaceutical market. It was one of two companies whose bids were selected, filling the gap left by Yichang HEC Changjiang Pharmaceutical Co. Ltd.'s surprising failure to win a contract for its Oseltamivir.
- AstraZeneca PLC
- AstraZeneca PLC, a prominent multinational pharmaceutical company, experienced a setback in China's 11th round of national volume-based drug procurement. Its diabetes drug, dapagliflozin (Farxiga), failed to secure a bid despite high demand from medical institutions. This indicates the increasing pressure on global pharmaceutical giants from domestic rivals in the Chinese market.
- Roche Holding AG
- Roche Holding AG saw its original inventor drug for Parkinson's disease eliminated in China's 11th round of national volume-based procurement. This indicates that even established multinational pharmaceutical giants are facing increased competition from domestic rivals in the Chinese market.
- Novartis AG
- Novartis AG is a multinational pharmaceutical giant. In the 11th round of China's national volume-based procurement, its original inventor drug for a blood disorder was eliminated, along with drugs from other significant pharmaceutical companies like Roche Holding AG and AstraZeneca PLC.
- Shandong Jingwei Pharmaceutical
- Shandong Jingwei Pharmaceutical was one of 14 winning companies in China's 11th round of national volume-based procurement that submitted a declaration stating their bid price was not below cost. This suggests their offer was significantly lower than the average benchmark price for their drug.
- Qilu Pharmaceutical Co.Ltd.
- Qilu Pharmaceutical Co.Ltd. is one of 14 winning companies in China's 11th volume-based drug procurement round that were required to submit statements declaring their bid prices were not below cost. This suggests Qilu Pharmaceutical offered significantly lower prices for one of the nine drugs in question, among them a doxofylline injection for asthma.
- Sichuan Kelun Pharmaceutical Co.Ltd.
- Sichuan Kelun Pharmaceutical Co.Ltd. is a Chinese pharmaceutical company that participated in China's 11th national volume-based drug procurement program. Along with 13 other companies, it was required to submit a declaration that its bid price for certain drugs was not below cost, indicating that it offered significantly lower prices in the bidding process.
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What Happened When
- 2018：
- China’s volume-based procurement (VBP) system became a cornerstone of the country’s health care reform.
- 2024：
- Yichang HEC Changjiang Pharmaceutical Co.Ltd.’s flu drug Oseltamivir accounted for 64.2% of the company’s 2.58 billion yuan in revenue.
- 2024：
- AstraZeneca PLC’s diabetes drug dapagliflozin (Farxiga) generated nearly 7 billion yuan in sales in China’s terminal pharmaceutical market.
- Oct.28, 2025：
- The 11th round of national volume-based procurement (VBP) concluded in Shanghai, covering 55 drug varieties and 453 products from 272 companies.
- Oct.29, 2025：
- Yichang HEC Changjiang Pharmaceutical Co.Ltd.'s shares opened down 0.13% to HK$46.42 after failing to win a contract for Oseltamivir in the 11th round.
- After Oct.28, 2025：
- For the first time, winning prices of VBP were not publicly disclosed following the 11th round of procurement.
AI generated, for reference only
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