About 7 years ago, China initiated a volume-based procurement (VBP) policy to award drug companies with large sales opportunities but at significantly lower prices – oftentimes, VBP winners have drug price discounts of 50% to 90%. There have been 10 rounds of VBP for drugs to date. However, significantly lower prices generally mean lower quality, which is what is going on now. China’s National Healthcare Security Administration (NHSA) is now investigating the quality of certain drugs after several Chinese doctors complained about the efficacy and safety of drugs purchased via VBP. Specific categories of drugs with such problems include drugs for cardiology, diabetes, antibiotics, etc.
Accordingly, the NHSA is now sending government officials to Shanghai to further examine quality risks. The teams will investigate cure rates, clinical data, efficacy, adverse events, etc. In addition, they will assess how generics compare to original brands and how domestically made drugs compare to imported drugs. Safety and efficacy will be improved by increasing the number of drug company inspections, broadcasting the results of drug evaluations, and developing new feedback channels. In addition, a real-world study evaluating the VBP program of bulk buying drugs has now started in close to 100 Chinese hospitals.
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.