China's 12th Batch Drug Central Procurement Covers 65 Varieties, Introduces 'Volume-Less' Win and Reference

The official document for the 12th batch of national centralized drug procurement has been released, covering 65 varieties across therapeutic areas including hypertension, diabetes, oncology, organ transplant anti-rejection, and anti-infectives. This round introduces systematic optimizations of several core rules.

In an effort to counter excessive competition, a 'volume-less' winning mechanism has been introduced: for each variety, an anchor price 1 is set as the higher of the average of comparable bid prices from shortlisted companies minus one standard deviation and the lowest comparable bid price; anchor price 2 is set as the average minus two standard deviations. If a company's bid price is lower than anchor price 2, it may still qualify as a proposed winning bidder but will no longer enjoy volume guarantees under the volume-based procurement. The anchor price mechanism uses statistical standard deviation to create a barrier against extreme low pricing, preventing destructive price undercutting.

For reference preparations, a separate 'winning without volume' channel has been established for the first time. Companies that bid no more than three times the meltdown anchor price and below the maximum effective bid price can directly qualify as proposed winning bidders. If a winning reference preparation subsequently undergoes localization, completes registration studies approved by the drug regulatory authority, and obtains approval, it can still be recognized as a winning drug.

Additionally, the mechanism of not disclosing winning prices, first introduced in the 11th batch, has been retained to alleviate concerns among multinational drug companies about price leakage. The reporting by drug brand mechanism is now fully implemented: medical institutions report their annual procurement demand by specific company and specific product specification, directly linking procurement demand to the company's existing clinical market. After a reference preparation wins without volume, its contracted procurement volume is set at zero, but medical institutions can purchase autonomously based on clinical needs.

In this round, 45,000 medical institutions completed demand reporting, involving more than 500 drug companies. On average, 15 companies received demand for each variety. In terms of competition structure, the most competitive variety has more than 50 participating companies. Companies' pricing decisions now rely more on their own cost calculations and production capacity planning rather than on speculation about competitors' bids.