As noted in our previous monthly new briefs, China has initiated various VBP, DRG, and DIP pricing plans to reduce prices for drugs and devices. China’s VBP program looks to reduce pricing by awarding large volume sales to tender winners. In early December, the National Healthcare Security Administration announced the 4th medical device bulk purchasing program resulting in a 70% price reduction on about 30 different medical devices. Specifically, 11 varieties of artificial intraocular lens products and 19 varieties of sport medicine products saw price cuts. Artificial intraocular lens which are in high demand for an aging Chinese population had an average 58% price cut. Sports products, also in high demand due to increased sports participation, had an average 72% price cut.
Alcon, Smith & nephew, Bauch & Lomb, J&J, and a few other foreign device manufacturers participated in the bidding process. These price reductions will save the Chinese government about $5 billion RMB (about $2 billion USD). More small to mid-sized Chinese device manufacturers secured decent-sized purchase orders due to their lower prices. The actual bulk buying for this 4th VBP tender will be carried out in mid-2024.
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.
Source used in the article: https://www.beroeinc.com/whitepaper/volume-based-procurement-vbp-medtech/