2020 Chinese Volume-based Procurement Policy Analysis
Chinese government rolled out volume-based high-end medical device and drug procurement program last year and expands it this year. This attempts increase government price negotiation power from drug and medical device manufacturers, helping release financial burden for both patients and national health security administration. On the other hand, this policy adds pressure on pharmaceutical and medical device firms.
This bulk-buy movement includes 50 types of drugs. Some of the drug price plunged over 90%. The total government contracts worth hundreds of billions yuan in total. Drug dealers have to cut prices by 60% on average to win the bid. For foreign companies generally quoted higher prices, they usually failed to win any bulk-buy contracts. For smaller domestic firms, this program might drive them to close business because they have low bargain power with government. Their labor costs and manufacturing costs are usually higher. When the market only selects the lowest price manufacturer, small firms are hard to survive.
For the top domestic pharmaceutical and medical device manufacturer, once they win the contract, it could provide up to half of the total government procurement volume this year. China’s generic drugs and medical industry start to concentrate on few big players.
Massive cuts to drugs and high-end medical device price are nightmare to all the manufacturers players, especially to the small ones. ANTMED as the market leader in the high pressure syringe subdivided medical device industry, we have rolled out all-round plan reducing costs and improving production rate in order to face this big changes in the upcoming 1-2 years. We hope to be victorious in this battle and able to sustain in the long term.
About Antmed
Antmed was founded in 2000, 21 years ago. Since 2004, Antmed has been specialized in the field of high pressure syringe and disposable pressure transducers. We are the National Hi-Tech Enterprise. We create value for our customers with our strong product and technology development capabilities, efficient production processes and global distribution networks.
ANTMED is the contrast imaging industry leader in China and the only domestic one-stop solution provider of CT, MR and DSA contrast media power injectors and disposables. Two of our best-selling products are High Pressure Syringes and Disposable Pressure Transducers. Domestically, ANTMED has the largest market share for High Pressure Syringes and is the No.1 manufacturer of Disposable Pressure Transducers. In the global market, ANTMED has customers in 100 countries and regions across the Americas, Europe, Oceania, Africa, Middle-East and South-east Asia.
Contact us for further inquires: info@antmed.com
Post time: Jan-21-2021