China's First National Volume-Based Procurement of High-Value Medical Devices Opens Bidding, Coronary Stents Priced as Low as RMB 469 with Median Around RMB 700

EO Health, November 5: The first round of national centralized procurement for high-value medical consumables opened bids today, with stents taking the lead. Ten products from nine companies, including both Chinese and foreign enterprises, were proposed for selection, with a median price of around RMB 700 for the selected products.

According to a report by the Science and Technology Innovation Board Daily, Shandong Jiwei’s Excrossal Xinyue stent was quoted as low as RMB 469, representing a price reduction of over 96% compared to the latest listed online price of RMB 13,300. Other stents priced in the hundreds of yuan included those from Essen Technology at RMB 548.99, Shanghai MicroPort at RMB 590, Lepu at RMB 645, Medtronic at RMB 648, Shanghai MicroPort at RMB 750, Shenzhen Kinhely at RMB 795, Boston Scientific at RMB 775.98, Boston Scientific at RMB 776.31, and Medfavour at RMB 798.

Previously, the ex-factory price of coronary stents was in the thousands of yuan, while the end-user price could reach tens of thousands of yuan.

On October 16, the "National Centralized Volume-Based Procurement Document for Coronary Stents" was released. The final procurement document confirmed that the initial year's intended purchase volume for the first batch of nationally centralized volume-based procurement of coronary stent products exceeded 1.07 million units, involving 27 products with a total value exceeding RMB 12.3 billion, accounting for 80% of the cardiac stent market size.

Approximately 1.5 million coronary stents are consumed annually in China, with total expenditures reaching RMB 15 billion. This single product category accounts for 10% of the total high-value medical consumables market. According to the centralized procurement documents, the scope of this national volume-based procurement includes marketed coronary drug-eluting stent systems (hereinafter referred to as “coronary stents”) that have obtained medical device registration certificates from the People’s Republic of China. The stents must be made of cobalt-chromium or platinum-chromium alloys, and the loaded drugs must be sirolimus or its derivatives.

For medical device companies, "centralized procurement" is not necessarily a good thing. Industry insiders have lamented that the era of high gross margins has passed.

In the current A-share market, based on data disclosed in their 2018 annual reports, companies such as Lepu Medical, Double Medical, Sonoscape, Kailitai, Guan Hao Biotechnology, Zhenghai Biological, Kangdelai, and Weili Medical have gross profit margins for high-value consumable products that are basically all above 50%.

Previously, on October 19, the first trading day following the release of the centralized procurement documents, the stock prices of leading medical device companies, including Lepu Medical, MicroPort, and Blue Sail Medical, all declined. Among them, MicroPort’s closing price plummeted by 11.93%, and Lepu Medical suffered a sharp drop of 8.83%, resulting in a total market value loss of RMB 46 billion for the entire medical device sector on that day.

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