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In recent years, China’s healthcare sector has undergone significant transformation. The government implemented the Volume-Based Procurement (VBP) program to reduce drug costs and improve accessibility. This initiative, overseen by the National Healthcare Security Administration (NHSA), has been central to China’s strategy for controlling rising healthcare expenditures and improving patient access to essential medicines.
The Core of the Controversy
While the program has successfully driven down prices through bulk purchasing of off-patent and generic drugs, it has also sparked Regulatory concerns. Healthcare professionals and foreign trade associations, including the European Union Chamber of Commerce in China, have raised alarms over the potential compromise on drug quality due to aggressive price competition.
In early 2025, NHSA launched a formal investigation following reports from Chinese medical practitioners questioning the clinical efficacy of certain generic drugs supplied under the program. Although NHSA concluded these concerns were unsubstantiated, the European Chamber criticized the inquiry for its lack of transparency and limited data disclosure.
Regulatory Implications
This situation underscores a critical issue in pharmaceutical Regulatory affairs: ensuring that procurement frameworks deliver cost savings and uphold Good Manufacturing Practices (GMP) and pharmacovigilance requirements. The Regulatory authorities in China now face increasing pressure to balance pricing mechanisms with robust post-market surveillance and quality assurance measures.
The European Chamber has called for procurement policies considering pharmacoeconomic benefits and clinical outcomes, recommending an overhaul of current evaluation criteria. This controversy has placed greater scrutiny on how China aligns its procurement models with international Regulatory best practices, particularly concerning bioequivalence, therapeutic consistency, and patient safety.
A Shifting Regulatory Landscape
In parallel with this procurement debate, China’s Center for Drug Evaluation (CDE) has been proactive in revising technical guidelines, particularly focusing on clinical pharmacology studies for peptide and antibody drugs, released in January 2025. This move aims to standardize clinical research quality and bolster the scientific rigor behind drug approvals.
Collectively, these developments point toward an evolving Regulatory landscape where compliance with GxP standards, evidence-based assessments, and transparent decision-making processes will become key differentiators for pharmaceutical companies operating in China.
Understanding China’s evolving procurement and Regulatory landscape can be complex, with rising concerns around balancing cost pressures and maintaining drug quality. At Freyr, we help pharmaceutical companies overcome these challenges by providing end-to-end Regulatory support, from local representation to ensuring compliance with China's latest requirements.
Contact us today to discuss tailored solutions for your Regulatory needs.