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Eli Lilly, Pfizer, Merck among Big Pharma losers in China’s latest round of procurement bidding

Several pharma giants—including Merck, Novartis, Eli Lilly and Pfizer—have just lost procurement deals in China under the country’s new bidding system.

The drugmakers lost out to domestic producers, which in some cases undercut prices for established medicines by more than 90%, according to Jiemian. Among the drugs to lose contracts were Eli Lilly schizophrenia medicine Zyprexa and Pfizer’s Viagra, the publication said.

This week’s bidding in Shanghai was the third round under a procurement program launched in 2018 aimed at saving billions of dollars. On Thursday, domestic and global companies bid for contracts on 56 medicines. 

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RELATED: Sanofi, AZ, Lilly and more win business in China’s expanded cut-price purchase program 

Initially, the program focused on purchasing medicines for 11 cities in China. It has since expanded nationwide, threatening an important market for many Big Pharma players. 

Companies such as AstraZeneca, Sanofi and Eli Lilly have managed to keep business under the aggressive procurement program, but they had to live with major discounts. 

The latest results underscore that large pharma companies are making a “strategic retreat from some of their older drugs,” in China, ICBC International Research analyst Zhang Jialin said, as quoted by Bloomberg; instead, they’re focusing on growing market share for newer medicines.

RELATED: Is Pfizer’s established drugs’ decline in China the ‘canary in the coalmine?’ 

It’s not a completely unforeseen shift, though. Pfizer’s established drugs business started showing a decline in China back in April 2019. At the time, Wolfe Research analyst Tim Anderson wondered whether the decline was the “canary in the coalmine” for the rest of the industry, which has been relying on the lucrative China market for revenue growth.

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