(Yicai) April 23 -- China’s healthcare authority began the second round of national centralized procurement of insulin in Shanghai today. 

About CNY11.5 billion (USD1.58 billion) purchase demand has been submitted by regions, Guosen Securities calculated, based on publicly available data.

Bidders include China’s Gan & Lee Pharmaceuticals and Tonghua Dongbao Pharmaceutical as well as foreign drugmakers such as Eli Lilly, Sanofi, and Novo Nordisk, Yicai learned.

The first round of national centralized procurement of insulin was initiated at the end of 2021 and implemented the following May, with a contract duration of two years. It resulted in an average price reduction of 48 percent.

Due to the big squeeze on inflated prices in the first round, which has created a more reasonable pricing framework, the National Healthcare Security Administration recently specified that subsequent procurement efforts will put more emphasis on ensuring stable supply, stable prices, and controlling price differentials.

Guosen Securities calculated that the total amount of insulin being sourced this time is about 241 million units, up about 13 percent from the 214 million units the first time round, with the share of third-generation insulin rising to 70 percent from 58 percent.

The procurement cycle is also longer this time. According to documents released by the NHSA, the cycle will start from the contract date to Dec. 31, 2027, which is more than three years.

The NHSA recently clarified that the procurement of insulin will continue to be done through competitive bidding. The policy encourages companies to offer competitive prices in exchange for larger orders.

Sales of diabetes drugs in Chinese public healthcare centers exceeded CNY52 billion in 2022. Insulin has consistently held the leading position in the diabetes medication market in recent years, and according to industry analysts, there is still room for market growth.

Editor: Tom Litting