As the national biopharmaceutical alliance's centralized procurement approaches, the biosimilar market is facing a major transformation. On January 14, 2025, the Anhui Provincial Medical Insurance Work Conference clearly stated that it would take the lead in the national biopharmaceutical alliance's centralized procurement. This move is regarded as an "upgraded version" of biopharmaceutical centralized procurement, covering a wider range of varieties, a larger market scale, and more intense bidding.

After the news of the centralized procurement spread, the stock prices of relevant pharmaceutical companies fluctuated. For example, the stock price of Innovent Biologics plummeted by 14% at one point after the news was announced, and the decline at the close was 10.16%. Nevertheless, relevant companies have stated that the centralized procurement has a limited impact on overall revenue, and the companies are planning the launch of new drugs to cope with market changes. Innovent Biologics, Shanghai Henlius Biotech, Junshi Biosciences, etc. have also stated that the centralized procurement has little impact on their own revenues.

Innovent Biologics also told the reporters of 21st Century Business Herald that there are currently no more details on the specific list, rules, methods, and time of the centralized procurement, and the company will follow up and understand.

"The company already has 14 products on the market, including 3 biosimilars. This year, tisotumab vedotin, mazdutide, and piconceptuzumab are also expected to be launched. Therefore, even if the centralized procurement is confirmed to be implemented, the overall impact on Innovent is limited. At the same time, the centralized procurement will correspondingly lead to a reduction in sales and management expenses, so the impact on profits is also limited." Innovent pointed out that in the long term, the company's goal of 20 billion yuan in 2027 is set under the assumption that the centralized procurement occurs and will not be affected.

Biosimilars refer to biological products that are highly similar in quality, safety, and effectiveness to the approved original biological products (reference products), but not completely identical. They are usually used to treat chronic or serious diseases, such as cancer, immune system diseases, and metabolic diseases. Due to the complexity of biological products, it is difficult for biosimilars to be completely consistent with the reference products in structure and biological activity, but they must pass strict research and approval processes to prove their safety and effectiveness in clinical applications.

The Inevitable Nature of Centralized Procurement

In fact, the industry has always believed that the future national biopharmaceutical alliance's centralized procurement is somewhat inevitable. In 2020, the National Healthcare Security Administration (NHSA) had already mentioned the centralized procurement of biopharmaceuticals. In October 2020, in the "Reply to Proposal No. 6450 of the Third Session of the 13th National People's Congress," the NHSA proposed that "biosimilars are not a forbidden area for centralized volume - based procurement," clearly stating from an official level for the first time that "biosimilars will be included in centralized procurement." As early as 2021, insulin was included in the scope of the national centralized procurement as the first biopharmaceutical variety.

In recent years, the NHSA has mentioned the centralized procurement of biopharmaceuticals many times. In March 2023, the NHSA issued the "Notice on Doing a Good Job in the Centralized Procurement and Price Management of Medicines in 2023," encouraging provincial - level drug centralized procurement to expand the coverage of centralized procurement from two dimensions of "filling in the blanks" and "making up for deficiencies," covering chemical drugs, traditional Chinese patent medicines, and biopharmaceuticals. This means that biopharmaceuticals have entered the stage of exploring the coverage and rules of drug centralized procurement.

Encouraged by the NHSA, many places across the country have successively carried out the centralized procurement of biopharmaceuticals.

On March 10, 2022, the results of the volume - based procurement of diclofenac and other drugs by an alliance of 11 provinces including Guangdong were announced. The biosimilar rituximab and blood products were included in the centralized procurement list for the first time. in July 2023, the Office of the Joint Meeting on Centralized Procurement of Drugs and Medical Consumables in Jiangxi Province issued the "Public Notice on the Proposed Centralized Procurement Variety Catalogue of the Inter - provincial Alliance for Interferon Procurement," and 14 interferon varieties were included. One month later, the Medical Insurance Bureau of Hebei Province issued the "Document on the Centralized Volume - based Procurement of Chemical Drugs and Biologics in the Beijing - Tianjin - Hebei Region Led by Hebei (HBYPJC - 2023 - 01)," which included 84 chemical drugs and 10 biopharmaceuticals.

On December 14, 2023, Jiangxi officially led the interferon inter - provincial alliance centralized procurement of 29 provinces. A total of 13 interferon pharmaceutical companies participated in the on - site bidding, and 48 specifications of 12 varieties were successfully procured. According to incomplete statistics, as of now, biological products such as insulin, blood products, growth hormone, monoclonal antibodies, heparin, and interferon have all appeared in centralized procurements at different levels.

Avoiding Accelerated Disordered Competition

For biopharmaceuticals, the product research and development in China started relatively late. At first, most of them were biosimilars developed following overseas original drugs. With more and more original drug patents expiring, since 2020, the domestic market has witnessed a wave of intensive launches of biosimilars. Biosimilars of many blockbuster varieties such as bevacizumab, adalimumab, and trastuzumab have been launched in China. Under the influence of centralized procurement, the prices of these biopharmaceuticals are expected to be impacted.

Judging from past practical experience, the prices of drugs included in the scope of centralized procurement will decline to varying degrees. In the national centralized procurement of insulin in 2021, the average price of the selected products decreased by 48%. In the insulin procurement in 2024, 49 products were selected, with a selection rate of 92%, and the selected prices decreased by another 3.8% based on the price reduction in the first - round centralized procurement.

The same is true at the local centralized procurement level. In the volume - based procurement of diclofenac and other drugs by the alliance of 11 provinces including Guangdong, rituximab, the first monoclonal antibody in China and the first - approved biosimilar variety, appeared on the procurement list. Eventually, Innovent Biologics was selected at a price of 885.8 yuan per bottle, with a price reduction of nearly 60%; Shanghai Henlius Biotech was proposed as an alternative at a price of 1117.09 yuan per bottle, with a price reduction of nearly 50%. As the original research pharmaceutical company, Roche's two products had an average price reduction of less than 20%. The large - volume injection was proposed as an alternative at a price of 6293 yuan per bottle, and the small - volume injection was proposed as an alternative at a price of 1834.26 yuan per bottle.

In the interferon alliance centralized procurement of 29 provinces led by Jiangxi, biopharmaceuticals also showed varying degrees of price reduction. In this centralized procurement, a total of 13 interferon pharmaceutical companies participated in the on - site bidding, and 48 specifications of 12 varieties were successfully procured. For varieties with more than 3 companies registering (human interferon α2b injection), the average price reduction of the selected products was 47.79%, with the highest reduction of 54.58%; for varieties with 2 companies registering (human interferon α1b injection and human interferon α1b eye drops), the average price reduction of the selected products was 19.38%, with the highest reduction of 24.55%; for the 9 varieties with only one company registering, the average price reduction of the selected products was 20.91%, with the highest reduction of 27.19%.

Of course, compared with the price reduction of more than 90% in the centralized procurement of chemical drugs and traditional Chinese patent medicines, the price reduction of biosimilars is still relatively moderate at present.

Data from Menet.com shows that there are 7 varieties of domestic biopharmaceuticals and biosimilars with ≥ 3 approved enterprises, including bevacizumab injection, trastuzumab for injection, rituximab injection, adalimumab injection, infliximab for injection, denosumab injection, and tocilizumab injection. The sales scale of these varieties in the terminal of Chinese public medical institutions in 2022 exceeded 770 million yuan, 650 million yuan, 460 million yuan, 150 million yuan, 100 million yuan, 60 million yuan, and 20 million yuan respectively.
Among them, bevacizumab is the largest biosimilar variety. Currently, the market scale of bevacizumab exceeds 10 billion yuan. Data in 2023 shows that Qilu Pharmaceutical, Roche, and Innovent Biologics account for more than 70% of the market share, and the remaining seven or eight companies share the remaining 30%.

With the advancement of the national centralized procurement, these biopharmaceutical companies will inevitably be greatly impacted. On January 16, the day after the news of the biopharmaceutical centralized procurement spread, the stock price of Innovent Biologics crashed by 10% intraday. Previously, some analysts pointed out that the large decline of Innovent Biologics was mainly because Danyou Tong (bevacizumab) was approved for eight indications and all were included in the medical insurance. If there is centralized procurement, it will definitely have an impact on performance in the short term.

Bio-Thera Solutions also responded to questions about the centralized procurement of adalimumab injection and bevacizumab injection in the investor activity record form disclosed previously. The company stated that there is a high possibility of centralized procurement of adalimumab, bevacizumab, etc. in the future. However, from the perspective of production capacity and global supply, the company is prepared to participate in the competition. Even if there is centralized procurement, the penetration rate may increase, and the market volume may expand. The key lies in whether the production cost can be competitive.

With the long - term advancement of centralized procurement, biopharmaceutical companies are bound to face greater market competition pressure. Of course, under the influence of centralized procurement, the biopharmaceutical market is also expected to transform into a pattern of orderly competition.

A certain industry analyst in South China frankly told the reporters of 21st Century Business Herald that the field of biosimilars is essentially similar to the over - concentration of innovative drugs. From the over - concentration of listings in the past to the over - concentration of passing evaluations today, the unchanged situation is excessive involution, which inevitably leads to high R & D funds and social costs. Solving the homogenized competition in the pharmaceutical industry is the key.

With the promotion of centralized procurement, this situation is expected to change. Centralized procurement makes the original large market occupied by leading giant enterprises. Late - coming new pharmaceutical companies cannot profit from the over - crowded and involuted track. Some companies will choose to withdraw from market competition, and the remaining companies must seek new profit - making tracks. In such a situation, differentiated innovation has become an inevitable way for late - coming pharmaceutical companies to survive. With more companies trying differentiated innovation, the broader needs of patients will be better met. In the long run, it can enable the biopharmaceutical industry to explore a broader blue ocean.

Source: https://finance.eastmoney.com/a/202501223304924275.html