China Expands Drug Procurement With 65 New Medicines

China’s national centralized drug procurement program reached a new milestone on July 31, when the 12th round of bidding in Shanghai successfully procured all 65 targeted medicines. According to Xinhua, 521 products from 327 companies gained proposed winning status in the largest batch since the program began, bringing cumulative coverage to 555 drugs. The National Healthcare Security Administration (NHSA) said patients nationwide are expected to use the price-reduced medicines within 2026.

Context

Launched in 2018 as a “4+7” pilot, China’s volume-based procurement (VBP) model pools demand from public hospitals and guarantees manufacturers market share in exchange for steep price reductions. Over eight years and 12 national rounds, the program has become a cornerstone of Beijing’s effort to contain drug costs while expanding access to medicines for chronic and major illnesses, from hypertension and diabetes to oncology and autoimmune conditions.

What the New Round Covers

China Daily reported that the selected drugs span anti-infectives, oncology, treatments for blood clots, diabetes, high blood pressure, high cholesterol, rheumatology and immunology, as well as anti-inflammatory and pain-relief therapies. Clinical staples in the batch include the cerebrovascular drug betahistine, the lipid-lowering agent acipimox, the anesthetic sevoflurane and nutritional compounds such as compound amino acids and fat emulsions.

The NHSA announced that 45,000 medical institutions submitted procurement volumes for the round, with an average of 15 companies bidding for each variety and the most competitive variety drawing 49 bidders. It added that mainstream producers — including Qilu Pharmaceutical, Kelun Pharmaceutical, Shijiazhuang No. 4 Pharmaceutical and Beite Pharmaceutical — each had more than 10 products selected, while 10 original reference preparations also won, among them Novartis’ sacubitril/valsartan, Bayer’s iopromide, Eisai’s betahistine and Abbott’s dydrogesterone.

New Rules Reshape Competition

The 12th round marks a deliberate policy evolution. The NHSA said it adhered to four principles: stabilizing clinical use, guaranteeing quality, countering irrational competition and preventing bid-rigging. A new “price anchor” mechanism targets the destructive price wars that marked earlier rounds. Under the rule, bids more than one standard deviation below the average no longer serve as the anchor for controlling price differences, while quotes more than two standard deviations below average may win but without volume allocation or an admission slot.

Quality requirements were also tightened. Drugs must pass consistency evaluations, production lines must be free of GMP violations for two years, and overseas generics must prove they passed Chinese regulatory inspections. Xinhua reported that 17 of more than 2,500 winning products have already been disqualified over quality problems. Gu Hai, director of the Center for Health Technology Assessment and Pharmacoeconomics at Nanjing University, told Xinhua that the prohibition on downgraded packaging — such as switching unit-dose tablets to multi-dose bottles — safeguards drug quality stability.

Grassroots access received particular attention. The program encourages compact medical consortiums to submit volumes jointly, allowing low-volume primary care institutions to flexibly choose winning brands during execution. Liu Side, a gastroenterology professor at Nanfang Hospital of Southern Medical University, said the rules “ensure grassroots medical institutions can obtain a wider variety of drugs within a limited scope, truly guaranteeing patients access to medication at their doorstep.” Xu Ming, chief physician at Fudan University’s Zhongshan Hospital, added that having some original reference preparations selected gives clinicians more choices and helps preserve patients’ medication habits.

Analysis

Industry observers see the round as a shift from maximizing price cuts to balancing affordability, quality and supply stability. GaBI Online estimates the 65 varieties represent roughly RMB 60 billion (US$8.8 billion) in market value, including Pfizer and Astellas’ prostate cancer drug enzalutamide — whose core patent expired in March 2026, opening the door to generic competition — and Novartis’ heart failure medicine sacubitril/valsartan, which generates up to RMB 8 billion in annual China sales. GaBI also noted the program has saved China’s medical system over US$60 billion since 2018 while turning mature generics and biosimilars into a low-margin market.

The new anti-involution rules follow an 11th round in late October 2025 that averaged roughly 70% price cuts and, for the first time, kept winning prices confidential. Analysts will watch whether the anchor mechanism tempers that historical pattern. The shift deepens a “dual-track” pharmaceutical economy in which mature generics and biosimilars compete through procurement while patented innovative drugs receive premium value-based pricing — a dynamic that is pushing Chinese firms toward outbound licensing.

What’s Next

Patients nationwide are expected to gain access to the 12th-batch medicines within 2026, according to the NHSA. The final winning list remains subject to a public-comment period, and no official average price-cut figure has been published. The outcome will signal how far China is willing to go in trading pure price reductions for a more stable, quality-focused drug supply.