China’s Seventh National Volume-based Procurement Round Kicks Off with Revised Rules

China’s health authorities have resumed the seventh national volume-based procurement (VBP) round after a pandemic-related delay. The Shanghai Sunshine Medical Procurement All-in-One (SMPA) platform has issued a notification outlining the bidding and procurement rules for 61 drug varieties across 147 specifications. The round will involve nearly 300 manufacturers, with competitive bidding scheduled for July 12.

Bidding Rules
The maximum number of manufacturers that can be shortlisted remains at 10, as per last year. However, the rules for winning bids and dividing regional supply contracts have been revised.

Winning Bid Conditions
To secure a tender spot, two conditions must be met simultaneously:

• One of the following must be satisfied:
  • The “unit comparable price” is ≤1.8 times the lowest “unit comparable price” of the same variety.
  • The “unit comparable price” is ≤ RMB 0.10.
  • The “unit filing price” decrease rate is ≥50.00% (capped at the highest valid filing price).
• If Condition 1 is achieved:
  • A winning bid cannot be the highest price among eligible bids.
  • A scoring system will be applied, and the top 6 excluded will be selected.

Supply Region Allocation
Spare supply regions have been added to the supply regions. The process is as follows:

1. Winning manufacturers first confirm their primary supply regions. The highest-ranked manufacturer (lowest unit bid price) has priority in selecting a supply region.
2. After the priority selection, all winning manufacturers, starting from the highest-ranked, confirm the remaining regions one by one, with each manufacturer selecting one region per round until all regions are chosen.
3. After primary supply regions are confirmed, winning manufacturers select spare regions, which must differ from their primary supply regions. If there is only one winning manufacturer, spare supply regions are not required.
4. Winning manufacturers become spare manufacturers in the spare regions, supplying products online at winning prices. This contrasts with earlier VBP rounds where winning manufacturers could supply products in non-supply regions at higher prices.

Primary Supply Manufacturer Replacement
If the primary supplying manufacturer can meet the market demands of its chosen region, the spare manufacturer can obtain primary supplying manufacturer status according to relevant procedures, as determined by the provincial healthcare security administrations.

Supply Region Confirmation
Winning manufacturers must confirm their supply regions based on their manufacturing capacities and are required to make a selection when it is their turn. Confirmation must be made under the condition that the regional confirmation rules are met, and no waiver is allowed. Failure to do so will be deemed as Abandoning the qualification to be selected.-Fineline Info & Tech