The National Joint Procurement Office for Drugs announced that two selected companies in China’s national centralized drug procurement program have been disqualified and placed on the “violation list” after failing to supply their agreed procurement volumes under contract and remaining unable to meet medical institutions’ demand despite talks and urging.
Contents
Enforcement Snapshot
| Item | Detail |
|---|---|
| Issuing Authority | National Joint Procurement Office for Drugs (China) |
| Action Type | Disqualification and placement on the “violation list” |
| Grounds | Failure to supply agreed procurement volume; inability to meet medical institutions’ demand despite talks and urging |
| Announcement Date | 26 Oct 2026 |
| Company 1 | Eugia Pharma Specialities Limited – letrozole tablets |
| Company 2 | JSC “Farmak” – gadoteric acid meglumine salt injection |
Violation Profile – Eugia Pharma Specialities Limited
- Product: Letrozole tablets, a selected product in the renewed procurement following the expiration of agreements under the 1st–8th batches of national centralized drug procurement.
- Applicant Enterprise (Domestic Agent): Hangzhou Ketu Supply Chain Co., Ltd.
- Admitted Failure: The company and its applicant enterprise stated they were unable to supply the product and had not carried out any distribution since the renewed procurement began.
- Penalty: Disqualified for letrozole tablets, placed on the “violation list,” and banned from participating in national centralized drug procurement activities from 26 Oct 2026 to 25 Oct 2030 — a four‑year exclusion.
Violation Profile – JSC “Farmak”
- Product: Gadoteric acid meglumine salt injection, a selected product in the 10th batch of national centralized drug procurement.
- Applicant Enterprise (Domestic Agent): Shanghai Liyi Pharmaceutical Technology Co., Ltd.
- Admitted Failure: The company and its applicant enterprise stated they were unable to continue supplying the product.
- Mitigating Factors: The Office cited the company’s relatively good prior performance and the existence of certain force majeure factors.
- Penalty: Selection status for gadoteric acid meglumine salt injection revoked; the company is disqualified from applying to participate in national centralized drug procurement activities from 26 Oct 2026 to 25 Oct 2028 — a two‑year exclusion.
Policy Context
- Supply Obligation Enforcement: Under the national volume‑based procurement (VBP) framework, selected suppliers commit contractually to agreed volumes at negotiated prices; persistent supply failure triggers disqualification and multi‑year participation bans.
- Graduated Sanctions: The differing penalties — a four‑year ban for Eugia versus a two‑year disqualification for Farmak — illustrate the Office’s willingness to weigh prior performance and force majeure when calibrating enforcement.
- Demand Protection: The actions follow the companies’ inability to meet medical institutions’ demand despite talks and urging, underscoring the regulator’s priority of securing continuous hospital supply of selected products.
Market Impact & Outlook
- Procurement Credibility: The enforcement signals to all VBP participants — domestic and foreign — that selection carries binding supply obligations, reinforcing the credibility of the national procurement program.
- Product Re‑Sourcing: With letrozole tablets and gadoteric acid meglumine salt injection selections disrupted, medical institutions will rely on remaining selected suppliers or replacement sourcing arrangements; specific re‑supply plans were not disclosed in the announcement.
- Compliance Precedent: The “violation list” placements add to the growing record of procurement enforcement actions, raising the compliance stakes for enterprises bidding into future batches.
- Appeal / Reinstatement: The announcement did not disclose any appeal mechanism or conditions for reinstatement following the exclusion periods.
Forward‑Looking Statements
This brief contains forward‑looking statements regarding the enforcement of centralized drug procurement rules, future participation eligibility of the disqualified companies, and continuity of supply for the affected products. Actual outcomes may differ due to regulatory developments, legal or administrative review, and changes in procurement policy.-Fineline Info & Tech
