By Fineline Cube 
The second‑draft rules for China’s 11th round of national centralized drug procurement (VBP 11th) have been released online, introducing sweeping changes to the competitive landscape, pricing methodology, and procurement cycle. The revisions aim to tighten market discipline, foster fair competition, and ensure value‑based access to essential medicines.
1. Competitive Landscape Adjustments
| New Requirement | Detail |
|---|---|
| Number of Competitors | Seven companies (including reference‑listed drugs and those that passed quality‑consistency evaluation) must compete for each product. |
| Exclusions | • Products still under a medical‑insurance negotiation or < 1 yr after win. • Products with < 100 million RMB procurement on provincial platforms (2024). • Products flagged as high‑risk clinically or for patent infringement. |
2. Relaxed Company Application Criteria
- Old rule: One market‑sales certificate, ≥ 2 yrs within the last 3 yrs.
- New rule: Two market‑sales certificates, ≥ 2 yrs within the last 5 yrs (Sept 2020 – Sept 2025).
This broadens the pool of eligible manufacturers while maintaining a minimum sales track record.
3. Procurement Cycle & Pricing Framework
| Feature | Old (Rounds 1‑2) | New (Round 11) |
|---|---|---|
| Cycle length | 4 years | ~3 years (till 31 Dec 2028) |
| Highest valid bid price | Not specified | Lower of: • 50 % of weighted‑average price of non‑centralized online listings • Highest winning bid in provincial centralized procurement |
International prices and online pharmacy rates are now factored into the calculation.
4. Bid‑Based Shortlisting & Price‑Spread Controls
- Shortlisting rule: Reverts to the 10th‑round model to keep overall shortlisting rate stable.
- Anchor point for price spread: Higher of 50 % of the average shortlisted price or the lowest bid price.
- Price‑spread circuit breaker: Triggered if a bid exceeds 1.8 × anchor point (exempt for low‑priced oral solids ≤ 0.1 RMB, small‑volume injections ≤ 1 RMB, large‑volume injections ≤ 2 RMB).
If a company is short‑listed but hits the breaker, it can be revived by dropping its bid to the highest non‑breaker bid. The revival price equals 1.8 × anchor point if only one company triggers the breaker.
5. Volume‑Based Procurement & Market‑Share Caps
- Designation: Short‑listed (direct or revived) companies become suppliers for institutions that report demand for their specific brand.
- Agreed volume: ~80 % of the institution’s reported volume.
- Single‑company cap: If a company’s cumulative agreed volume reaches 50 % of total reported volume for a product, each institution’s volume is capped at 50 % of its reported amount. This portion is not counted toward the agreed volume and can be sourced independently.
6. Penalties for Non‑Compliance
Companies added to the non‑compliance list face disqualification from all NCDP bids and a ban from participating in national centralized procurement for 6 months to 5 years.
7. Implications for Stakeholders
| Stakeholder | What to Expect |
|---|---|
| Manufacturers | More competitors, tighter pricing, but relaxed entry criteria. |
| Hospitals | Potentially more reliable supply, but must navigate volume caps. |
| Patients | Anticipated cost savings from lower bid prices, but watch for supply gaps if volume caps trigger. |
| Regulators | Greater enforcement of compliance and market discipline. |
Key Takeaways
- The 11th‑round rules tighten pricing, expand competition, and extend the procurement cycle.
- New mechanisms such as the price‑spread circuit breaker and revival options aim to prevent market distortions.
- Volume caps safeguard against monopolistic practices while ensuring hospitals can meet demand.-Fineline Info & Tech