Shanghai has finalized its list of second-tier backup suppliers and manufacturers for specialized drug formulations under the 10th National VBP (Volume-Based Procurement) Program (GY-YD2024-2). The move aims to stabilize supply chains, address market shortages of irregular drug specifications, and ensure cost-effective access to critical medications. Key suppliers include domestic pharmaceutical giants such as Jiangsu Hengrui Pharmaceuticals, Qilu Pharmaceutical, and Changzhou Pharmaceutical Factory.
Market Implications
The designation of backup suppliers reflects heightened efforts to mitigate supply chain risks amid rising demand for niche formulations and injectables. For instance, irregular packaging specifications like vanadium-chromium acetic acid injections (5ml–100ml) and combination tablets (e.g., sitagliptin/metformin) now have dedicated suppliers, reducing dependency on single manufacturers. Price competitiveness remains central, with selected firms offering steep discounts—e.g., naloxone hydrochloride injections at ¥0.59 per unit—underscoring China’s aggressive cost-containment strategy.
Strategic Opportunities for Pharma Firms
Companies securing spots in the backup or specialized-supplier lists gain a competitive edge in Shanghai’s ¥100 billion pharmaceutical market. However, stringent pricing requirements pressure profit margins, urging firms to optimize production efficiency. Local players like Humanwell Healthcare and CSPC Pharmaceutical Group are poised to expand market share, while multinationals face challenges aligning with China’s price-volume procurement model.
Industry Outlook
Regulators emphasize “economic viability” and “market share” as critical criteria for supplier selection, signaling a long-term shift toward domestic consolidation. Stakeholders should prioritize portfolio diversification, especially in high-demand categories like oncology (e.g., palbociclib capsules) and cardiovascular therapies. Proactive engagement in centralized procurement rounds will be vital to sustaining growth in China’s evolving healthcare landscape.-Fineline Info & Tech
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