Bid rejection rate reaches 79%! Chinese herbal injection products have completely fallen into disarray.

　　589 varieties were withdrawn from bidding, resulting in a withdrawal rate of 79%. Recently, Ningbo City unveiled the outcome of its price negotiations targeting exclusively licensed traditional Chinese medicine products. The entry threshold—price reductions starting at 15%—has become a nightmare for many Chinese medicine companies.

　　From January 22 to 24, Ningbo began soliciting bids for traditional Chinese medicines listed in the price-capped procurement catalog. A total of 742 exclusively marketed pharmaceutical products have been included in this catalog.

　　In the negotiations, Ningbo City’s specific approach was to further reduce the original lowest national bid price in Zhejiang Province—already 10% lower than the national average—for other provinces—by an additional 15% as the entry threshold.

　　It is understood that after price negotiations, 589 exclusive products withdrew from the bidding, while only 153 products agreed to compromise. The price reductions for these agreed-upon products reached over 15%, and the withdrawal rate was as high as 79%.

　　However, for certain reasons, the negotiation results have not yet been implemented. For the 589 exclusively marketed pharmaceutical products, this now represents their last chance to celebrate in the Ningbo market.

　　Injectables have almost completely collapsed.

　　By comparing Ningbo’s previously released list of exclusively negotiated drug varieties with the list of drugs that have won bids as announced by Ningbo, we found that only two exclusively marketed Chinese medicine injection products made it onto the draft list of winning bids—namely, Guanxinning Injection and Jishi Teng Injection.

　　“Almost all of the injections have died out,” said a bidding specialist from Zhejiang.

　　In hospital sales, Chinese medicine injections are undoubtedly a major product category, consistently ranking among the top 100 in terms of hospital revenue. Unlike products listed in the Catalog of Auxiliary Medications—where inclusion merely subjects their sales to monitoring yet still allows them to be sold—being removed from the catalog effectively spells the end for that product in that particular region.

　　After all, Ningbo is just a local market. What worries Chinese medicine enterprises most is whether Ningbo’s aggressive price-cutting approach for proprietary Chinese medicines will spread. Some analysts believe that although other regions may learn from Ningbo’s example, they won’t adopt it on a large scale. Currently, the national government remains supportive of proprietary Chinese medicines; if such a practice were to be widely implemented, it would likely face significant resistance.

　　However, some industry insiders believe that many provinces and cities have already issued tender documents explicitly supporting hospitals in forming consortia to carry out volume-based procurement. Moreover, Ningbo has already signed a cooperation agreement with Sanming—the star city in healthcare reform—under which the two sides have decided to implement cross-regional joint price-capping procurement for pharmaceuticals and medical consumables. The negotiated prices achieved by Ningbo will be adopted in Sanming. As the whole country is learning from Sanming’s approach, it’s possible that these negotiated results will be widely adopted in the future. For exclusive traditional Chinese medicine products, therefore, a nightmare may soon be upon us.

　　Traditional Chinese medicine has been eliminated amid the brutal price cuts in volume-based procurement.

　　A person from the traditional Chinese medicine industry stated that it’s not just Ningbo—judging from the outcomes of recent pilot cities’ volume-based procurement initiatives, traditional Chinese medicines (TCMs) are being phased out. Currently, many tendering officials generally view TCMs as auxiliary medications that offer little help in addressing patients’ clinical issues and instead consume hospital medical insurance resources. As a result, there is a pressing need to significantly reduce the number of TCM products included in the procurement catalog. During volume-based procurement, most cities have adopted a simplistic and blunt approach, using secondary price negotiations to screen out products based solely on whether they meet the required price reduction criteria, without adequately considering the pharmacoeconomic aspects of these products.

　　On the eve of volume-based procurement in a certain city, the city’s bidding official publicly stated: “As everyone knows full well, these traditional Chinese medicines—just drop them all from hospital use; it won’t affect treatment at all.” The implication was clear: if the prices are lowered to a satisfactory level, they can stay; otherwise, they’d better just pack up and leave.

　　The industry insider mentioned above stated that this practice is extremely detrimental to the development of traditional Chinese medicine and will encourage companies to focus solely on cost reduction. Despite the frequent introduction of supportive policies by the state, the outlook for the future development of TCM remains pessimistic.

　　CPPCC members suggest: Abolish volume-based procurement and maintain the 15% markup.

　　Lin Ling, a pharmaceutical marketing expert, pointed out that in many regions today, secondary price negotiations are conducted based on the nation’s lowest price, often resulting in reductions of 15%, 20%, or even 30% or 60%. For some drug products, these cuts are simply unsustainable. More critically, secondary price negotiations lack a rational basis. The national removal of standard pharmaceutical markups has led to a sharp increase in medical expenses for large-scale tests and equipment in healthcare institutions. As drug costs decline, medical expenses rise even faster. The concessions made by pharmaceutical companies have failed to benefit ordinary consumers, instead becoming a hidden fund for healthcare institutions, further exacerbating their profit-seeking behavior. This, in turn, pushes more affordable drugs out of reach for patients, leaving behind only overpriced medications.

　　In her proposal submitted this year, Lei Jufang, a member of the National Committee of the Chinese People's Political Consultative Conference and Chairwoman of Qizheng Tibetan Medicine, suggested that...

　　First, abolish the practice of phasing out traditional Chinese medicines (TCMs) through volume-based procurement in pilot cities. Instead, establish a provincial-level mechanism for clinical expert review of the TCM catalog, maintain the 15% hospital markup on TCMs, and support the development of the TCM industry.

　　Only by promptly applying the brakes and canceling the volume-based procurement (second-round price negotiations) for traditional Chinese medicine (TCM) products can we shift to a system led by provincial health and family planning commissions, which would organize provincial experts to conduct clinical pharmacoeconomic evaluations of the TCM product catalog. This would help refine the catalog’s selection criteria, eliminate products with poor clinical cost-effectiveness, and ensure that only those products with proven efficacy and high quality find practical application in clinical settings. Only in this way can we truly promote innovation among Chinese medicine enterprises.

　　Second, we will promote the improvement of the scientific research evaluation system for traditional Chinese medicine (TCM), establishing and refining research evaluation standards and systems that are tailored to the unique characteristics of TCM, and studying and perfecting incentive policies that foster innovation in TCM.

　　Carry out research on the evaluation and translational application of clinical efficacy in traditional Chinese medicine, and establish an efficacy evaluation system that is tailored to the unique characteristics of TCM. Encourage the Chinese medicinal material industry to allocate resources to accelerate its transformation and upgrading, promote digitalization, networking, and intelligent development in the industry, strengthen technology integration and process innovation, enhance the manufacturing capabilities of Chinese medicinal equipment, expedite the standardization and modernization of Chinese medicinal production technologies and processes, boost the industry’s capacity to leverage intellectual property rights, and gradually foster the emergence of large-scale Chinese medicinal enterprises and industrial clusters.

　　Relying on the modernization technology industrial base for traditional Chinese medicine, we will launch the Science and Technology Entrepreneurship Initiative for the Greater TCM Health Industry, thereby promoting the integrated development of the primary, secondary, and tertiary industries in the field of TCM. We will conduct post-marketing reevaluations of proprietary Chinese medicines, intensify efforts in the secondary development of these medicines, carry out large-scale, standardized clinical trials, and cultivate a group of renowned, internationally competitive medicinal formulas.

　　Reporting media: Cyberspace Blue

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