China’s National Healthcare Security Administration (NHSA) concluded its 10th round of centralized drug procurement on August 5, 2026, and the results mark a turning point: a record 10 brand-name (originator) drugs won bids, up from just 3 in the previous round in late 2025. Multinational pharmaceutical companies including Pfizer, AstraZeneca, Novartis, Sanofi, and Takeda each secured at least one winning bid in the latest volume-based procurement (VBP) round. Here’s what the shift means for your pharmaceutical business in China.
Why It Matters
China’s centralized drug procurement program — known domestically as “带量采购” (dàiliàng cǎigòu, volume-based procurement) — is the single largest drug purchasing mechanism in the world. Since its launch in 2018, the program has covered 374 drugs across 10 rounds, generating cumulative savings of ¥410 billion (US$56 billion) for China’s public healthcare system, per NHSA data. But for multinational pharma companies, the program has been a double-edged sword: winning a bid guarantees volume (often 60–80% of a hospital’s projected demand for that molecule) but requires price cuts averaging 53% across all rounds.
The record participation by brand-name drugs in round 10 signals that multinational pharma companies are recalibrating their China strategy. In earlier rounds (2018–2023), most multinationals chose to stay out of the VBP program, betting that their brand equity and physician loyalty would sustain off-VBP sales through retail pharmacies and private hospitals. That bet has largely failed. Data from IQVIA shows that off-VBP sales for brand-name drugs dropped an average of 72% within 12 months of a VBP round covering their therapeutic category. The new math: participating in VBP at a 50–55% price cut is increasingly preferable to losing 70%+ of volume outside the program.
The Details
NHSA’s rule changes for round 10 were the decisive factor. Two modifications specifically benefited originator drugs. First, NHSA introduced a “dual-pathway” selection mechanism: brand-name drugs can now qualify for VBP inclusion either through the standard lowest-bid route or through a clinical-value assessment pathway that considers real-world efficacy data, pharmacovigilance records, and supply reliability. Second, the price-ceiling calculation now accounts for R&D amortization — drugs with verifiable China-specific clinical trial investments receive a 5–12% upward adjustment to their bid ceiling, narrowing the gap between brand-name and generic pricing.
The 10 winning brand-name drugs span five therapeutic areas: oncology (3 drugs), cardiovascular (2), diabetes (2), respiratory (2), and central nervous system (1). The average price reduction for brand-name winners in round 10 was 48%, compared to 56% for generic winners — the narrowest gap in any VBP round to date. Takeda Pharmaceutical’s narcolepsy drug — which on August 5 separately became the first first-in-class drug approved in China ahead of the United States using global clinical data — was among the winners, signaling that China’s regulators are increasingly willing to reward innovation with market access.
The financial stakes are enormous. China’s pharmaceutical market reached ¥1.86 trillion (US$256 billion) in 2025, per IQVIA, with the hospital channel (where VBP applies) representing 62% of that total. For a brand-name drug in a therapeutic category with ¥5 billion in annual hospital spending, winning a VBP bid at a 48% discount on a molecule with a 55% gross margin means trading ¥550 million in gross profit for guaranteed volume covering 70% of the hospital market — versus the near-certainty of losing that entire channel to generics within 12 months by staying out.
The competitive implications extend beyond China’s borders. Multinational companies that secure VBP wins gain a volume platform that lowers their per-unit manufacturing cost — a structural advantage they can leverage in other price-sensitive emerging markets. Three of the 10 brand-name winners in round 10 have already announced plans to use their VBP-awarded Chinese manufacturing facilities (or contract manufacturing partnerships) as export hubs for Southeast Asian and African markets.
What You Should Do
Multinational pharma companies evaluating their China VBP strategy should take these steps:
- Model the dual-pathway economics for your portfolio. For each of your China-registered drugs, calculate the net-present-value difference between VBP participation at a 45–55% price cut with guaranteed hospital volume versus off-VBP sales through retail and private channels. IQVIA and Clarivate both offer VBP scenario-modeling tools; the break-even math has shifted decisively toward participation for drugs with gross margins above 65%.
- Invest in China-specific clinical data. NHSA’s clinical-value assessment pathway rewards drugs with China-specific efficacy and safety data. Companies that have conducted Phase III trials with Chinese patient cohorts — or that can demonstrate pharmacovigilance data from China’s adverse-event reporting system — receive preferential scoring in the dual-pathway evaluation. The estimated cost of a China-specific post-marketing study is ¥30–80 million, a fraction of the revenue at stake in a VBP round.
- Evaluate your manufacturing footprint. The three companies using VBP-awarded China facilities as export hubs are capitalizing on a structural advantage: China-manufactured pharmaceuticals approved under VBP quality standards face lower regulatory barriers for export to ASEAN markets under the ASEAN-China Free Trade Area’s pharmaceutical mutual-recognition framework. If your China manufacturing is limited to packaging and labeling, consider upgrading to full API production to capture this optionality.
For broader context on how China’s healthcare policy evolution is reshaping market access for foreign firms, see our analysis of China’s 323 million seniors and the five policy shifts foreign healthcare firms must track in 2026 and our recent breakdown of China’s widening tax net on offshore insurance products, which examines parallel regulatory shifts affecting cross-border financial products.
The number to remember: 48%. That’s the average price reduction for brand-name drug winners in VBP round 10 — the narrowest discount gap between originator and generic drugs in the program’s eight-year history, and a signal that China’s procurement system is evolving to reward innovation alongside cost control.
Where to Go From Here
Based on what you just read:
- Ready to act? Read [guide: SLUG-TO-BE-FILLED]
- Still comparing? See [comparison: SLUG-TO-BE-FILLED]
- Need numbers? Try [tool: SLUG-TO-BE-FILLED]
— China Gateway 360 —
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