China Announces 8th Pharmaceutical National Volume Based Procurement (VBP)

In mid-April, China set forth the bidding results of the 8th national VBP. This program reduced prices by about 50% and affected about 40 drugs. The winning bidders were almost exclusively Chinese drug companies, with only a few foreign companies winning. According to local authorities, besides price VBP is now also considering the quality of the drugs delivered. However, how the Chinese government evaluates whether a drug is of quality is still unclear.

VBP has dramatically reduced the prices of drugs in China.  The main principle of VBP is to trade high volumes for lower prices.  Normally, VBP only starts when the specific drug sales in China reach about $70 million, but this threshold may be reduced in the future. Whether foreign drug companies want to partake in China’s VBP and see it as an advantage is determined on a case-by-case situation.

Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.

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