Summary of Key Points
The 12th batch of national drug procurement auctions was held in Shanghai on July 31, covering 65 commonly used medications (including those for infections, blood pressure control, and diabetes management). A total of 45,000 medical institutions across the country submitted bids, and 521 products from 327 companies were selected for purchase. The most notable product is Novartis' sacubitril valsartan sodium tablets, which are the highest-selling medication in public hospitals, with the original brand accounting for over 90% of the market. Novartis, along with 14 generic drug manufacturers, won the bid for this product. The purpose of these procurement auctions is to reduce inflated drug prices and alleviate the financial burden on patients; it is expected that patients will be able to use cheaper medications within this year. Novartis' active participation is aimed at maintaining its market share in public hospitals, as it is facing a wave of patent expirations and declining sales. Other original brand manufacturers such as Bayer and Teijia also participated and won bids.
Detailed Analysis
1. The 12th Batch of Procurement: Large Scale, Wide Coverage, and Rapid Implementation
This procurement event was like a “group buying” for drugs, with 45,000 hospitals, community health centers, and pharmacies submitting their demand. 327 companies competed with 521 products. The 65 selected medications are all commonly used by the public, including antibiotics for infections, anti-tumor drugs, blood pressure and lipid-lowering drugs, as well as medications for rheumatic pain. What’s particularly promising is that the National Healthcare Security Administration has stated that patients will be able to use the cheaper versions of these drugs within this year, without having to wait too long.
2. Focus on the Product: Sacubitril Valsartan Sodium Tablets – The “Best-Selling” Drug in Public Hospitals
Why is this drug so popular? It is a star medication for treating chronic heart failure and high blood pressure, with the highest sales volume in public hospitals (over 6 billion yuan in 2025), with Novartis holding more than 90% of the market. This time, 24 domestic generic manufacturers competed with Novartis, and both Novartis and 14 generic companies won the bid. Previously, Novartis had a monopoly on this market; now, they will share the sales with 14 other companies, but at least they have maintained their presence in public hospitals.
3. Novartis’ Strategy: Lowering Prices to Maintain Market Share
Why is Novartis willing to lower prices? If it doesn’t win the bid, it will lose its market in public hospitals, which are a major channel for drug sales. In the past, some original brand manufacturers would shift their sales to pharmacies if they didn’t win bids, but this would lead to a significant decrease in sales. Novartis is under pressure this year, with sales down by 2% and facing a large number of patent expirations (many of its older drugs’ patents are about to expire, allowing generic products to enter the market). Therefore, it must maintain its share in this “best-selling” product, even if it means lowering prices—after all, having a market is better than not having any at all.
4. The Purpose of the Procurement: Reducing Inflated Drug Prices to Make Good Medications More Affordable
The logic behind these procurement auctions is simple: original brand drugs and their generic versions with expired patents often have inflated prices. By conducting collective purchases, companies are forced to compete on price, reducing the excessive costs. For example, the prices of the selected medications will definitely decrease, allowing patients to spend less while still receiving the same quality of treatment. Lowering the price of sacubitril valsartan sodium tablets will significantly reduce the long-term treatment costs for patients with heart failure and high blood pressure.
5. New Trends in the Industry: Original Brand Manufacturers Participating More Actively
In the past, some international original brand manufacturers were reluctant to lower prices and participate in these auctions due to their brand prestige. However, this time, companies like Bayer (iopromide), Teijia (betahistine), and Abbott (dydrogesterone) all won bids. This indicates that they realize the importance of maintaining their market share in public hospitals. Rather than sticking to high prices and losing market share, it’s better to lower prices to preserve their presence. Additionally, the procurement process emphasizes “clinical stability”—meaning that the selection is not based solely on the lowest price but also on ensuring drug quality and supply, providing doctors and patients with more choices (for example, medications from different manufacturers can be selected to meet various needs).
Conclusion
These procurement auctions not only enable patients to access cheaper drugs more quickly but also force pharmaceutical companies to adjust their strategies. Original brand manufacturers are now participating in the competition, and generic companies have the opportunity to gain a share of the market. For Novartis, winning the bid is crucial for maintaining its market position; for patients, it means they will benefit from lower drug prices this year. This is the essence of these auctions: making good medications more accessible and reducing the cost of healthcare.