context: The State Council stated the new round (11th) of drug procurement would adhere to principles of 'stabilise clinical practice, ensure quality, prevent bid manipulation and anti-involution' during a press conference on 24 July. The tenth round of procurement at the end of 2024 created a record-high average price reduction exceeding 70 percent, stiring concerns within the industry. Hence, the issue of drug procurement appeared in the 2025 Government Work Report for the first time, requiring strengthened quality supervision.
Shi Zihai 施子海 NHSA (National Healthcare Security Administration) deputy director provided examples on ways for future drug procurement improvement
- reporting volumes
- medical institutions can report specific brand quantities by selecting brands they recognise and wish to use
- selection rules
- improve price difference calculation 'anchor points', no longer using simple lowest prices as references, whilst requiring lowest-bidding enterprises to publicly explain pricing rationality and promise not to bid below cost
- quality assurance
- require bidding drug production lines to have no violations of good manufacturing practice of medical products within two years, with drug regulatory departments ensuring 'full coverage' of both selected enterprise inspections and product sampling
Previously, collective procurement set circuit breakers at 1.8 times the lowest bid, with other drugs exceeding this price being eliminated. However, enterprises manipulated markets through bid rigging and collusion, and submitted ultra-low prices contrary to sufficient competition intentions.
Compared to previous years when negotiated drugs in medical insurance directories could only be exempted from price cut from national procurement for one year, 2025 marks the first time where they will be excluded from procurement (and also price cuts) throughout entire negotiation agreement periods (which means two to three years of price protection).
NHSA also publicly disclosed the selection process for collective procurement varieties for the first time. 68 drugs including telmisartan amlodipine oral conventional-release formulations met evaluation quantity conditions but were ultimately excluded due to
- provincial pharmaceutical centralised procurement platform statistics showing 2024 procurement amounts below C¥100 million
- specifications failing to meet sufficient competition patterns
- high clinical usage risks
Another noteworthy change is that hospitals previously could only report volumes by drug generic names, but this collective procurement added options for reporting by specific brands. For example, under the generic name of amlodipine besylate tablets for blood pressure reduction, options include Pfizer's Norvasc, Renhe Pharmaceutical's Haimap and Jingxin Pharmaceutical's Jingxin.
Assessment thresholds for hospital reported procurement volumes reduced from no less than 80 percent of previous actual usage to 60–80 percent. Industry experts suggest this means reduced possibilities for small enterprises to dominate markets through extremely low pricing, favouring large brands with existing high market shares whilst respecting doctors' clinical usage habits, potentially opening opportunities for original research drugs in public hospital usage.