China’s drug bulk-buy programme has been expanded

China has expanded a pilot drug bulk-buying programme to almost the entire country in an attempt to negotiate lower prices from drug manufacturers, Reuters has reported. This is adding pressure on multinational pharmaceutical companies and their domestic rivals.

The programme, which was rolled out last year, saw 11 Chinese cities work together on a process to bulk-buy 25 types of drugs. This caused the price of some medicines to decrease over 90 percent.

Documents released by the drug procurement branch of the Shanghai Healthcare Security Administration has shown that the scheme will be expanded to 25 provinces and regions, who will form a league to look for suppliers for these drugs that will be stocked at public hospitals as well as some military and private medical institutions.

The drugs on the list include off-patent blockbusters that are made by Western pharmaceutical companies, but which have generics made by local companies, such as leukaemia therapy Imatinib sold by Novartis as Gleevec. 

The tenders for the two drugs in last year’s pilot programme were won by Chinese drugmakers’ generic products.

The documents also cited that as many as three winners of the tender for each drug could obtain as much as 70 percent share of the government’s purchase volumes, while the sole winner of a tender could win up to a 50 percent share of purchase volumes.