(Yicai Global) Nov. 26 -- China’s sixth round of centralized drug procurement has driven insulin prices down by more than the expected 50 percent in the world's biggest hub of diabetics.

Some of the winning suppliers are China's Gan & Lee Pharmaceuticals, Tonghua Dongbao Pharmaceutical, and Zhuhai-based United Laboratories, Yicai Global learned during a bidding event organized by the medical regulator today.

Gan & Lee Pharma's long-acting insulin product is priced at CNY48.71 (USD7.60), which is 63 percent below the medical agency's upper limit of CNY132 (USD20.70). French healthcare company Sanofi, one of the successful bidders, priced its product at CNY69, or almost half lower than the limit.

The cuts are larger than expected. The average drop could exceed 50 percent, Zhao Heng, founder of consultancy Latitude Health, said to Yicai Global before the bidding began.

But the discounts are not unparalleled. The declines may be lower than the 90-percent slumps seen during previous bulk-buy programs involving other drugs because insulin manufacturers are divided based on the specific types of peptide hormones so the competition is not as fierce, Zhao added. The sixth round of procurement separates insulin products into six different groups.

The government of the country with 140 million diabetics began promoting centralized medicine procurement in November 2018 to include more drugs in its national medical insurance system and to push for lower pricing. The program has been expanded to involve more categories over the past few years.

Market participants were anticipating whether the final mix includes local producers as the market is currently dominated by foreign companies. The insulin price cuts should depend on the level of overseas drugmakers’ participation and their resolution in maintaining their current market shares, Zhao predicted earlier.

In the first half of last year, three overseas firms, including Novo Nordisk, Sanofi, and Eli Lilly and Co., provided nearly three-quarters of all insulin products sold in Chinese public hospitals. Gan & Lee Pharma had a 9.3 percent market share and Tonghua Dongbao an 8.3 percent ratio, according to data released by LeadLeo Research Institute.

Gan & Lee Pharma can make 3.5 tons of active pharmaceutical ingredients to produce insulin, an executive at the Beijing-based firm said to Yicai Global in an earlier interview. The company is about to kick off production at its new facility in Shandong province's Linyi, the person added.

Gan & Lee's stock price [SHA: 603087] surged as much as 9.4 percent to CNY78 (USD12.20) intraday. The shares are still about a half down this year.

Shares of Tonghua Dongbao [SHA: 600867] slid as much as 10 percent to CNY11.33 intraday. The equity price is a tenth down this year.

Editor: Tang Shihua, Emmi Laine, Xiao Yi