(Yicai Global) Aug. 20 -- Chinese insulin makers, such as Tonghua Dongbao Pharmaceutical and Gan & Lee Pharmaceuticals, may see their stock prices surge in the coming months if the government of the world's biggest hub of diabetics decides to include the drug into its centralized procurement program next month.

The possible inclusion could replace foreign products with domestic ones but the exact impacts are still unknown, National Business Daily reported yesterday, citing an insider at Gan & Lee. However, the Beijing-based firm has already begun expanding overseas to be prepared for intensifying rivalry.

China has the biggest number of diabetics worldwide and its insulin market was worth CNY28.6 billion (USD4.4 billion) last year, according to data from consultancy Insight Statistics.

Tender Draft

The National Healthcare Security Administration sent an insulin tender draft to drugmakers on Aug. 18. A producer of the medicine mainly used by type-1 diabetics confirmed to Yicai Global it had received the document. The results should be implemented next year, according to the draft.

The document is still open for feedback so it is impossible to estimate its impact on Tonghua, the Paper wrote in a report yesterday, citing an insider. Last year, the Jilin province-based firm earned CNY2.3 billion (USD353.7 million) from its insulin products, or more than 80 percent of its total, according to its earnings report.

The government began promoting centralized medicine procurement in 2018 to push for lower pricing. The program has been expanded to include more types of drugs over the past few years.

China's insulin market is dominated by Sanofi, Novo Nordisk, Eli Lilly and Co. In 2020, public health institutions in the country sold CNY27 billion (USD4.2 billion) worth of insulin, rising by nearly 8 percent from 2019, according to data provider Menet. The three multinational corporations made up more than 70 percent of the total.

Shares of Tonghua Dongbao [SHA: 600867] were 2.2 percent down at CNY10.50 (USD1.60) this afternoon after closing nearly 4 percent up yesterday.

Gan & Lee's stock price [SHA: 603087] slid 5.9 percent to CNY74.44 (USD11.50) in the afternoon after rising almost 6 percent yesterday.

Editor: Emmi Laine, Xiao Yi