Volume-Based Procurement in Mainland China: Key Trends and Planning Future Strategies
Volume-Based Procurement in Mainland China: Key trends and planning future strategies
The early wave of reforms for the generic drug sector is
yielding benefits but also raising profitability concerns
for manufacturers
Bayer: 40% increase in volume sales of
Glucobay after VBP inclusion; possible
return to positive sales performance in
future.
Glucobay accounts for approximately 95%
of Bayer's global acarbose sales; VBP
inclusion was paramount to garner volume
sales.
Eliminating drug manufacturers with uncertified generics
Most small-sized companies are struggling to gain GQCE certification, which led
to the decline in total number of generic drug manufacturers from more than
5,000 in 2015 to 4,300 in 2018.
Significant reduction in overall healthcare cost
The Chinese Government has saved an estimated $1.5 billion in healthcare
spending following the third VBP round in August 2020.
Greater visibility of highly genericized therapeutic segments
40% of the total VBP drugs are from anti-infective and cardiovascular therapies.
‣ Clarivate™
Sanofi 7.7% decline in overall sales;
Plavix and CoAprovel sales declined by
52.5% and 33.4%, respectively
Bayer: Unit sales of Avelox declined
8.8%
Pfizer: Net loss in revenue after VBP
inclusion of Zyvox (linezolid)
AstraZeneca: Negative sales for Iressa
(gefitinib)
MNCs de-prioritize VBP due to reduced profitability
Bayer, Sanofi, Novartis and Pfizer reported declining revenues for the VBP
products, affecting profit margins for these firms.
Fear of long-term survival among domestic firms
Reduced profitability will hinder domestic firms to optimally invest in R&D.
Companies losing bids may find it hard to sustain through retail channels only.
Unclear roadmap
Recently, VBP reform has been split into provincial and national VBP, which may
lead to confusion around the drug's accessibility from province to province.
Source: GBI analysis, Clarivate
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