200 Pharmaceutical Companies, Including Over 50 Listed Firms, Compete in China's Third National Drug Volume-Based Procurement Bidding

　　【Pharmaceutical Network - Industry Trends] The third batch of the national centralized drug procurement officially opened bids on August 20, with the proposed winning bid results announced on the same day. This procurement round included a total of 56 drug varieties, a number approaching the combined total of the first two batches, and covered therapeutic areas such as malignant tumors, hypertension, diabetes, and psychiatric disorders.
 

Among these 56 varieties are well-known products such as ambroxol, ibuprofen, desloratadine, domperidone, glucosamine, olanzapine, and sildenafil citrate, as well as blockbuster drugs with annual sales reaching billions, including finasteride, mecobalamin, ticagrelor, and moxifloxacin.
 

It is reported that metformin, moxifloxacin, ticagrelor, and capecitabine are the four drug varieties drawing significant attention within the industry. Notably, metformin, an oral antidiabetic agent, was unfortunately excluded from the second round of centralized volume-based procurement (VBP); its inclusion in the current VBP list has thus garnered considerable industry interest. Currently, 27 manufacturers have obtained consistency evaluation approval for immediate-release oral formulations of metformin, including Yiling Pharmaceutical and North China Pharmaceutical Group Corp. (NCPC). Additionally, 17 manufacturers have received approval for extended-release and controlled-release formulations of metformin, including Chia Tai Tianqing Pharmaceutical Group, CSPC Ouyi Pharmaceutical Co., Ltd., and Baiyang Pharmaceutical Group. Industry insiders predict that pharmaceutical companies producing metformin will face intense competition in this round of centralized procurement, with a substantial price reduction for metformin anticipated.
 

The procurement volume for Moxifloxacin Sodium Chloride Injection in this centralized procurement round reached as high as RMB 1.759 billion, with three companies participating in the bidding. In addition to the originator company Bayer, both Hongri Pharmaceutical and Aike Pharmaceutical were “new entrants” for this product. Given the large procurement scale and favorable competitive landscape, industry insiders believe that companies will actively compete for the bid. There is also considerable anticipation within the industry regarding whether Bayer will offer a low price for this product similar to its previous pricing strategy for the antidiabetic drug Glucobay (Acarbose).
 

Ticagrelor Tablets (90 mg) have currently been approved by seven manufacturers, including Salubris, Chia Tai Tianqing, CSPC Ouyi, and Yangtze River Pharmaceutical. The global market size for this product exceeds USD 1 billion. The National Centralized Drug Procurement Office has set the procurement volume for ticagrelor at RMB 1.346 billion. It is believed that the competition this time will be very fierce.
 

Capecitabine currently boasts sales as high as RMB 3.49 billion. The National Centralized Drug Procurement Office has set the procurement volume at RMB 1.062 billion. According to the centralized procurement list, companies participating in the bidding include Roche, among others. Industry experts believe that once a blockbuster drug of this caliber wins the bid, the winning company may leverage this centralized procurement to reshape the market and pricing landscape, leading to intense competition among enterprises.
 

According to media reports, approximately 200 companies participated in the bidding, including more than 50 listed companies. Among them, Yangtze River Pharmaceutical Group, CSPC Pharmaceutical Group Limited, Qilu Pharmaceutical Co., Ltd., Shanghai Pharmaceuticals Holding Co.,Ltd (SPH), Jiangsu Hengrui Pharmaceuticals Co., Ltd. (Hengrui Pharma), and Sichuan Kelun Pharmaceutical Co., Ltd. (Kelun) were the enterprises with a larger number of varieties involved in this centralized procurement, and they are also the leading domestic generic drug manufacturers. Based on the compiled list of companies with higher market shares for their approved generic varieties, Hengrui Pharma’s Capecitabine Tablets, Letrozole Tablets, Febuxostat Tablets, and Ambroxol Hydrochloride Tablets had relatively high market shares among the approved varieties. In the first quarter of 2020, their sales market shares reached 11.4%, 30.0%, 41.9%, and 12.1%, respectively. In 2019, the sales revenue from sample hospitals amounted to RMB 1.24 billion, RMB 728 million, RMB 522 million, and RMB 18.957 million, respectively.
 

It is well known that the purpose of implementing volume-based procurement (VBP) is to eliminate inflated drug prices and achieve the substitution of originator drugs with generics. It is anticipated that with the implementation of the VBP selection results, for varieties that originally held high sales market shares, successful bidding will further expand the relevant enterprises' market share, thereby accelerating the substitution of generics for originator drugs. Meanwhile, for some varieties with originally low market shares, successful bidding will enable the so-called "new entrants" (or "barefoot companies") to enhance their profitability and improve cash flow.