Reporter |
Editor |Xie Xin
TriggerA-Share In Vitro Diagnostics (IVD) Sector Plunges, the results of Anhui's IVD volume-based procurement have been released.
On August 27, the Anhui Provincial Medical Centralized Procurement Service Center announced the results of the centralized procurement of clinical laboratory reagents for provincial public medical institutions. The results indicated that Snibe, Abbott, Mindray, Siemens Healthineers, A Biomerieux Company, Boyang Bio, DiaSorin, Wondfo Biotech, Ortho Clinical Diagnostics, Getein Biotechnology Co., Ltd., Shenzhen Weidian Bio-tech Co., Ltd., and Wuhan EasyDiagnosis Biomedicine Co., Ltd. all had products included in the procurement; Roche, Beckman Coulter, Autobio Diagnostics Co., Ltd., and Tellgen were excluded, but specific winning bid prices were not disclosed.
Regarding the selected products, according to the centralized procurement negotiation results released by the relevant authorities in Anhui, Abbott, Mindray, Snibe, and Siemens Healthineers ranked at the top in terms of successfully negotiated product varieties, with 19, 14, 14, and 12 varieties respectively.
In recent years, centralized procurement is no longer a new term in the pharmaceutical industry, with products ranging from generic chemical drugs to biosimilars, and from coronary stents to orthopedic consumables, being successively included. It should be noted that, due to the unique characteristics of the industry, the centralized procurement pathway for clinical diagnostic reagents in Anhui differs slightly from that for pharmaceuticals and medical consumables.
In the notice issued by the Anhui Provincial Medical Centralized Procurement Service Center on August 19, the price negotiation rules do not adopt a fixed-quota elimination system. Instead, only enterprises that accept the shortlisted price are eligible to participate in two rounds of price negotiations with an expert panel. Successful negotiations will establish a volume-based procurement negotiated price. In other words, without a price reduction, there is no opportunity.
Regarding the contracted procurement volume, public medical institutions will set it at 80% of the previous year's procurement volume for successfully negotiated products on the provincial drug procurement platform. Furthermore, similar products not included in the price negotiation scope will still be subject to linked price reductions. According to a research report by Zheshang Securities, such rules resemble the "no winning bid, no market" principle previously applied in the centralized procurement of coronary stents. Additionally, the procurement cycle for this round is two years.
According to the centralized procurement winning bid prices published by the industry media IVD Network, using Anhui Province's current clinical laboratory test fee standards as a reference, the shortlisted prices for imported brands account for 28%–30% of the fee standards, while those for domestic brands account for 20%–25%. In other words, to qualify for the shortlist, companies must first slash their prices significantly.
Generally, the cost of a Hepatitis B five-marker test at a Grade IIIA hospital ranges from several dozen to around one hundred yuan. According to a report by the In Vitro Diagnostics Network, leaked data indicates that the winning bid prices for Abbott, Mindray, and Boyuan are 6.5 yuan/person, 5 yuan/person, and 3.5 yuan/person, respectively. Regarding the cardiac function diagnostic test BNP (Brain Natriuretic Peptide, also known as B-type natriuretic peptide)—which typically costs several hundred yuan—the winning bid prices for Abbott, Siemens, Weidian, and Wondfo Biotech are 64 yuan/person, 60 yuan/person, 45 yuan/person, and 45 yuan/person, respectively.
Notably, despite facing the risk of losing the Anhui market if they fail to win bids, companies such as Roche, Beckman Coulter, and Autobio Diagnostics have no record of winning bids in the current centralized procurement results. According to previous reports, the aforementioned three companies did not participate in the prior on-site quotation phase.
Interestingly, according to a previous brokerage conference call transcript, Autobio Diagnostics Co., Ltd. had previously assessed that Abbott would be unable to bear the extent of the price cuts in this centralized procurement. However, the final outcome was that Abbott participated and secured the highest number of winning bids, while Autobio itself failed to win any.
Roche Diagnostics' withdrawal from the bidding process comes as no surprise, as the foreign enterprise continues to maintain its strong stance in the Chinese market. Previously, Roche was asked to lower prices during Nanjing's IVD centralized procurement, but reports indicate the matter ultimately fizzled out.
According to data released by Founder Securities, established foreign enterprises such as Roche, Abbott, and Beckman Coulter hold over 80% of the market share in the chemiluminescence immunoassay sector, leaving more than 1,000 domestic companies to compete for the remaining 20% of the profits. This also indicates that, as Roche and Beckman Coulter withdraw from the Anhui market, Abbott and Chinese manufacturers are likely to capture a larger market share.
Regarding the withdrawal of the aforementioned industry-leading enterprises, some industry observers suggest that leading companies must maintain their market pricing systems nationwide or even globally. In terms of product coverage, multinational corporations are primarily concentrated in tier-1 cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, with a particular focus on Grade III Class A hospitals in major metropolitan areas. On the other hand, another speculation holds that in the clinical application of IVD, hospitals are not the sole testing channel; a substantial number of third-party laboratories are effectively conducting tests on behalf of hospitals. As for the oversight of these entities, healthcare security authorities may lack the regulatory jurisdiction to intervene effectively.
In addition to the “disappearance” of major manufacturers such as Roche and Beckman Coulter, Autobio, which specializes in immunodiagnostic reagents, and Tellgen, renowned for clinical tumor marker testing, were also absent from the winning bidders list, surprising many investors. After all, these two companies, together with Mindray and Snibe, are all leading players in the domestic in vitro diagnostics (IVD) industry.
However, compared with Mindray, the business scale of Snibe, Autobio, and Tellgen is relatively smaller. In 2020, Mindray's total revenue from its in vitro diagnostics (IVD) business amounted to RMB 6.6 billion, whereas Snibe's IVD revenue stood at RMB 2.2 billion. Of this figure, Snibe's reagent sales reached RMB 1.7 billion. During the same period, Autobio's reagent segment generated RMB 2.379 billion in revenue.
In terms of reagent products, in addition to immunodiagnostic reagents, Autobio Diagnostics also offers microbiological testing reagents, biochemical testing reagents, and others. In 2020, the company sold 255 million tests of immunodiagnostic reagents, nearly four times the sales volume of its microbiological testing reagents. While specific product names are not disclosed, "Products 1–8" listed in the company's basic product information section all belong to the immunodiagnosis segment, with individual sales revenues ranging from approximately RMB 40 million to RMB 100 million. A rough estimate places the combined sales revenue of these products at around RMB 500 million. Similarly, Tellgen's sales of in vitro diagnostic (IVD) reagents in 2020 were at a comparable level, generating a specific revenue of RMB 417 million, which accounted for 85% of its total operating revenue.
Regarding future impact, numerous research reports indicate that while this round of centralized procurement may cause short-term disruptions to companies within the industry, enterprises in China will ultimately compete for market share from foreign firms in the long run. Huajin Securities stated in a report: "Compared with overseas companies, Chinese-produced enterprises have a clear advantage in production costs and demonstrate a higher acceptance of price reductions under centralized procurement. Furthermore, multinational corporations face disadvantages in centralized procurement due to factors such as international pricing. The continued advancement of centralized procurement is expected to accelerate the pace of domestic substitution."