Multinational companies have lost out on contracts for generic drugs in China in recent years. Credit: Sage Ross, Creative Commons
As part of its ambitious plan to reform the country’s healthcare system and lower drug costs, China has begun rolling out a centralized drug procurement system. The system rewards the cheapest price tag, with drug makers competing for contracts to supply generic drugs to the nation’s public hospitals and the government choosing the winners.
Two years into the program, it’s already clear who the losers are: global drug makers like Pfizer, Merck and Eli Lilly. The vast majority of contracts for commonly used generic drugs have been won by Chinese drug makers. Out of the 291 winning bids in the two rounds of procurement this year, for instance, only seven were won by foreign pharmaceutical firms, according to GBI Health, a healthcare intelligence provider.
The most recent volume-based procurement round, in August 2020, had all Chinese companies coming out ahead.Data: GBI Health
“It’s a very large change from what the system was before,” says Helen Chen, head of the Ch
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