The National Joint Procurement Office in China has announced the renewal of drug procurement contracts for insulin products under the volume-based procurement (VBP) program, with the renewal process scheduled for April 23, 2024. The procurement cycle is valued at RMB 11.5 billion (approximately USD 1.59 billion), and the winning bids will take effect from December 31, 2027.
A total of 11 quotation units across six procurement groups will participate, involving 14 manufacturers. Insulin products with valid domestic marketing approvals as of April 15, 2024, are eligible for bidding. Unlike the initial two-year procurement cycle, the renewed contracts will span three years.
The price difference for drugs has been further narrowed, with identical pricing for certain products from the same manufacturer. For instance, the price for a 3ml: 300 pen refill matches that of a 10ml: 400 pen refill, while a 1.5ml: 450 pen refill is priced at 1.3 times that of the 3ml: 300 pen refill, a slight decrease from the previous round’s 1.4 times.
Winning bids will generally be capped at 40% lower than the initial ceiling price. Each procurement group can shortlist up to seven products, with conditions for eligibility based on the lowest bid prices. The winning products will be classified into Class A, B, and C, with A1 products representing the lowest prices within Class A.
The agreed procurement quantities stipulate that A1 products will account for 100% of the first-year procurement volume, while other Class A products will receive 80%. Class B and C products will account for 55% and 45%, respectively. Adjustments in basic quantities will occur based on any upgrades or downgrades in product classifications compared to the first VBP round.
Notably, Hisun Pharma, which participated in the first round, will not be included this time, while new entrants such as Asia-East Bio, Lunan Pharma, Bo’ao Bio, and Huisheng Pharma will participate. Overall, the demand for shortlisted products has increased by 17.53% compared to the first round, totaling 242 million units. Novo Nordisk remains the leading company in terms of demand, despite a 9% decrease.
The renewal round does not impose strict price reduction requirements, contrasting with the initial round’s mandate for a minimum 40% price cut. The average expected price decrease this time is anticipated to be more moderate.- Flcube.com
