China's Insulin VBP Saw Average Price Cut of 48.75%

by Grace Wang Dec 06, 2021

China's insulin VBP (volume-based procurement), whose preparation reportedly began in March 2021, finally revealed the preliminary result on Nov. 26. Eleven drug makers won the bid to supply insulin products to public healthcare institutions across China.1

RELATED: China Plans Nationwide Insulin VBP After Local Procurement in Wuhan

1. China Insulin VBP: Preliminary Result Analysis

1.1. Novo Nordisk Claims Seven Bid-Winner Products

Among 42 bid-winner products, Novo Nordisk took the champion with seven products. Two local Chinese companies—Gan & Lee and the United Laboratories—took the second and third places with six products respectively.

Pharma Company

Number of Bid-Winning Insulin Products

Novo Nordisk A/S

7

Gan & Lee Pharmaceuticals Co., Ltd.

6

The United Laboratories International Holdings Limited

6

Eli Lilly and Company

5

Tonghua Dongbao Pharmaceutical Co., Ltd.

5

Hefei Tianmai Biotechnology Development Co., Ltd.

3

BIOTON S.A.

3

Wanbang Biopharmaceuticals Co., Ltd.

2

Yichang Changjiang Pharmaceutical Co., Ltd

2

Sanofi-Aventis Deutschland Gmbh

2

Zhejiang Hisun Pharmaceutical Co., Ltd.

1

1.2. Sharp Price Cut

The average price cut from the price limit for corresponding group of insulin products in VBP was 48.75%. The most remarkable price cut, 73.76%, was made by Eli Lilly.2 The company offered a bid price for Mixed Protamine Zinc Recombinant Human Insulin Lispro Injection (25R) at 18.89 yuan per injection.

Top 10 Products With Highest Price Cut Rates in China's VBP

Source: Preliminary Result of Insulin VBP Released by the Joint Procurement Office

Insulin Product

Company

Bid Price (Yuan)

Price Cut Rate

Mixed Protamine Zinc Recombinant Human Insulin Lispro Injection (25R)

Eli Lilly Nederland B.V./Eli Lilly Italia S.p.A. (Repackaged by Lilly Suzhou Pharmaceutical Co., Ltd.)

18.89

73.76%

Insulin Aspart Injection

Gan & Lee Pharmaceuticals Co., Ltd.

19.98

72.25%

Insulin Aspart Injection

Zhejiang Hisun Pharmaceutical Co., Ltd.

23.46

67.42%

Recombinant Human Insulin Lispro Injection

Eli Lilly Nederland B.V./ Eli Lilly Italia S.p.A. (Repackaged by Lilly Suzhou Pharmaceutical Co., Ltd.)

23.57

67.26%

Recombinant Human Insulin Lispro Injection

Gan & Lee Pharmaceuticals Co., Ltd.

23.98

66.69%

Insulin Aspart 30 Injection

Gan & Lee Pharmaceuticals Co., Ltd.

24.56

65.89%

Mixed Protamine Human Insulin Injection (30R)

Gan & Lee Pharmaceuticals Co., Ltd.

17.89

64.22%

Recombinant Insulin Glargine Injection

Gan & Lee Pharmaceuticals Co., Ltd.

48.71

63.10%

Mixed Protamine Zinc Recombinant Human Insulin Lispro Injection (25R)

Gan & Lee Pharmaceuticals Co., Ltd.

28.88

59.89%

Human Insulin Injection

BIOTON S.A. (Repackaged by Yifan Pharmaceutical Co., Ltd.)

22.32

55.36%

1.3. Bulk Purchase

VBP involves six groups of insulins for bulk use in China's public healthcare institutions, whose purchase volume for the first year is expected to exceed 212 million doses.

The Six Groups of Insulins in China's VBP

Source: The Joint Procurement Office Releases the VBP Plan Targeting Insulin Alone3

Group

Insulin Group

Insulin Product

VBP Price Limit Set by the Joint Procurement Office

(yuan/dose)

1st Year Purchase (dose)

1

Prandial human insulin

Human Insulin Injection

50

9,075,263

2

Basal human insulin

Isophane Protamine Recombinant Human Insulin Injection

50

2,487,596

3

Premixed human insulin

Mixed Protamine Human Insulin Injection (30R)

50

77,385,768

Mixed Recombinant Protamine Human Insulin Injection (30/70)

4

Prandial insulin biosimilar

Insulin Aspart Injection

72

25,672,230

Recombinant Human Insulin Lispro Injection

Insulin Glarlisine Injection

5

Basal insulin biosimilar

Recombinant Insulin Glargine Injection

132

36,883,755

Insulin Detemir Injection

Insulin Degludec Injection

6

Premixed insulin biosimilar

Mixed Protamine Zinc Recombinant Human Insulin Lispro Injection (25R)

72

61,014,285

Insulin Aspart 30 Injection

Total

212,518,897

2. VBP May Change Insulin Market Shares in China

As China implements VBP, the three foreign-invested insulin giants—Nordisk, Eli Lilly, and Sanofi—are challenged by local Chinese insulin makers. For example, Gan & Lee shows the ambition of gaining a bigger market share. The company slashed the prices so greatly that it grabbed six places in the top 10 products with the sharpest price cuts.

Meanwhile, foreign companies seem not so keen on the price war against local competitors for the VBP-covered market. Foreign insulins have a strong customer base in China. Numerous Chinese patients, who have been used to the foreign-branded insulins, may not easily switch to domestic ones.

Thus, foreign insulins are still a tempting choice when Chinese healthcare insitutions need to purchase extra insulins outside VBP. Besides, in regions not covered by VBP, foreign brands still remain competitive.

Unlike foreign companies whose advantages remain strong, Chinese insulin maker that lost the VBP bid would face the most brutal market. They will probably be left with only a tiny market share.

The major market shares are taken by their foreign competitors who remain competitive and the Chinese bid-winners.

3. VBP May Promote Insulin Use in China

According to International Diabetes Federations, there are over 116 million people with diabetes in China and the number is climbing up.4 Yet only 10 million of 50 to 60 million diagnosed diabetic patients receive regular insulin treatment.5

Insulins, now covered by VBP with much lower prices, may become more favorable to patients than other anti-diabetic drugs. 

China's VBP, initiated in 2018, is intended to ease economic burden of Chinese patients. Now the VBP project has expanded its scope from chemical drugs to biological products, which implies VBP, as a long-term policy covering more and more drugs, would affect more pharma companies in the Chinese pharma market.

Therefore, in such a market-and-policy oriented economy, pharma companies need to brace themselves for market trends and policy changes. 

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Grace Wang
ChemLinked Regulatory Analyst
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