Shanxi Province Announces First-Ever Injection Drug Volume-Based Procurement: 17 Companies Selected Amid Major Market Restructuring

May 27 (Medicine Network) – On the evening of May 25, the Shanxi Provincial Drug and Medical Device Centralized Bidding and Procurement Network released the “Public Notice of Proposed Winning Bidders for the First Batch of Centralized Volume-Based Procurement through Drug Consortium Alliances by Medical Institutions in Shanxi Province.” A total of 17 companies were selected as winning bidders for 21 injectable drug varieties. In terms of the number of selected varieties, Luoxin Pharmaceutical, Qilu Pharmaceutical, and Harbin Pharmaceutical Group Holding Co., Ltd. ranked at the forefront. Among them, Luoxin Pharmaceutical had the highest number of selected varieties, with a total of 3 varieties and 6 specifications, namely cefuroxime injection, cefoxitin injection, and parecoxib injection. Qilu Pharmaceutical and Harbin Pharmaceutical Group each had 2 selected varieties; Qilu Pharmaceutical secured docetaxel injection and tropisetron injection, while Harbin Pharmaceutical Group secured recombinant human erythropoietin and gemcitabine injections.

 

As Shanxi Province has explicitly stated that the winning bid prices for this centralized volume-based drug procurement will not be publicly disclosed, the specific winning prices remain unknown. However, according to results circulating within the industry, the average price reduction is expected to exceed 50% based on the lowest national prices. Furthermore, compared with the list of the top three enterprises by platform procurement volume for main specifications of drugs with the same generic name in Shanxi’s 2019 procurement catalog, most of the proposed winning bidders this time are not among the previous top three. Consequently, the market landscape for injectables in Shanxi is poised for a significant overhaul.

 

 

 

It is understood that all varieties included in this volume-based procurement in Shanxi Province are injections, involving respiratory, hematological,Tumor, anesthesia, neurology, and other therapeutic areas. Shanxi was also the first province to launch volume-based procurement centered on injections, serving as a notable model for other regions.

 

According to the previously released "Notice on Announcing the Results of Qualification Review for Products Declared in the First Batch of Centralized Volume-Based Procurement by the Shanxi Provincial Medical Institution Drug Consortium Alliance," more than 150 enterprises participated in the bidding competition. Among them, as many as 35 companies bid for levofloxacin; the number of bidders for varieties such as cefuroxime, cefoxitin, and ambroxol all exceeded 20. (157 Pharmaceutical Companies Compete for 21 Major Injectable Varieties! Consistency Evaluation May Accelerate Significantly)

 

Meanwhile, in accordance with the Shanxi rules, which do not differentiate by quality tiers, enterprises’ bids should in principle not exceed their own lowest provincial winning bid (listed price) for the same product nationwide as of December 31, 2019, with the lowest bidder designated as the proposed winner. Consequently, the industry had previously anticipated fierce competition among enterprises. Results circulating within the industry indicate that, on the basis of the national lowest prices, the average price reduction may exceed 50%.

 

Based on the proposed selection results, some major products of industry concern have also witnessed a reshaping of the market landscape in Shanxi. Data from Menet shows that in 2019, the market size of chemical drug injections at the terminal of public medical institutions in China exceeded RMB 630 billion, with the total sales of the Top 20 products surpassing RMB 100 billion. Among the Top 20 products, three injection varieties were included in Shanxi’s volume-based procurement: Cefuroxime Sodium for Injection, Cefoxitin Sodium for Injection, and Docetaxel Injection. According to Menet data, the terminal sales of Cefuroxime Sodium for Injection, Cefoxitin Sodium for Injection, and Docetaxel Injection at public medical institutions in China in 2019 were RMB 4.506 billion, RMB 4.480 billion, and RMB 4.412 billion, respectively. The companies holding the largest market shares for these three varieties were Esseti (21.62%), Sinopharm Zhijun (17.42%), and HengruiPharmaceuticals（45.22%）。

 

In the proposed selection results in Shanxi Province, Luoxin Pharmaceutical secured two major varieties: cefuroxime and cefoxitin injections. Docetaxel injection was awarded to Qilu Pharmaceutical. It is understood that docetaxel injection is one of the commonly used drugs for cancer treatment in China. Data from the Consistency Evaluation Database of Menet.com shows that currently, only Huiyu Pharmaceutical has obtained approval for its generic Class 4 docetaxel injection, which is considered as having passed the consistency evaluation.

 

 

Notably, in addition to the market reshuffling faced by several major drug categories, a comparison with Shanxi Province’s “Top 3 Platform Procurement Volumes for Main Specifications of Drugs with the Same Generic Name in the 2019 Annual Procurement Catalog”EnterpriseList》shows that most of the companies proposed for selection in this round are notProcurementTop 3 Enterprises by Volume. Among the 21 varieties, only six—cefuroxime (Luoxin), piperacillin-sulbactam (Suzhou Erye Pharmaceutical), tropisetron (Qilu Pharmaceutical), levocarnitine (Ruiyang Pharmaceutical), piracetam (Shanghai Modern Harsen), and nalmefene (Liaoning Haisco)—had winning bidders that ranked among the top three in procurement volume. For the remaining 15 varieties, the winning bidders were not among the top three. For example, for moxifloxacin injection, the top three enterprises by procurement volume in 2019 were Bayer, Chengdu Tiantaishan, and Nanjing Youke, with Sichuan Kelun ultimately selected as the provisional winner. For gemcitabine injection, the top three enterprises by procurement volume in 2019 were Jiangsu Hansoh, Chia Tai Tianqing, and Eli Lilly, with Harbin Pharmaceutical Group Holding Co., Ltd. ultimately selected as the provisional winning bidder.

 

 

According to the provisions of the “Document on the First Batch of Centralized Volume-Based Procurement through Drug Consortium Alliances for Medical Institutions in Shanxi Province,” the agreed procurement volume is set at 70% of the total procurement volume of drugs with the same generic names selected by medical institutions within the procurement alliance in 2019, as recorded on the Shanxi Provincial Drug and Medical Device Procurement Platform. In other words, the winning bidders will directly secure 70% of the total procurement volume, instantly becoming the top-ranked enterprises in terms of procurement volume. The market landscape in Shanxi for the aforementioned 15 drug varieties will undergo a significant reshuffle. Winning bidders will seize the opportunity for a “comeback,” directly capturing market share, while enterprises that previously held larger market shares will face “erosion” of their market position.

 

With the implementation of the results of Shanxi’s first volume-based procurement (VBP) for injections, the pace of VBP for injectable products at the national level and across various regions is likely to accelerate. Data show that 31 injectable products have currently passed the consistency evaluation by at least one manufacturer. According to industry forecasts, levetiracetam injection, azacitidine for injection, ibuprofen injection, and moxifloxacin sodium chloride injection are likely to be included in the third round of national centralized procurement, as more than two manufacturers have already passed the consistency evaluation for these products.

 

Recently, the nationalPharmaceuticalsThe Drug Administration has issued an announcement, clarifying the relevant requirements for the consistency evaluation of chemical drug injections. Under the dual policy impact of consistency evaluation and volume-based procurement, the market for chemical drug injections will undergo rapid reshuffling.